DERECO, Revitalis join up for €400m partnership

The independent Cologne-based family office DERECO said recently that it plans to extend its co-operation agreement with Hamburg develop Revitalis Real Estate into a much broader strategic partnership, which could see the two companies collaborating on up to €400m worth of projects over the coming years.

Revitalis is specialised in large-scale residential and hotel projects, with a number of high-profile developments under its belt in Dortmund, Hamburg, Freiburg, Dresden and Frankfurt, with further site acquisitions in Berlin in the immediate pipeline.

DERECO, which offers asset and investment management services to private and semi-institutional clients in the property sector, has already taken a stake in two of Revitalis's projects in Freiburg. The new deepened partnership now plans to focus on large-scale urban projects which can be sold on as a package to investors, with a number of apartment units being offered to individual buyers. At least €90m will be invested this year in Dresden and Dortmund, including a hotel in Dresden, with Berlin and Hamburg projects to follow.

Revitalis will be in charge of operations on the projects, while DERECO will handle the capital raising and financing.

DERECO has been growing rapidly and just recently won a new €80-€100m buying mandate from a Dutch family office. DERECO is to invest the money in retail and office properties in premium locations and pedestrian zones with individual asset values of €10m upwards, along with news residential real estate with some retail space in towns with populations of 50,000 people and more.

The goal is to acquire the new or nearly new assets on a forward deal basis, with an upper limit of a twenty-times multiple. DERECO would handl the asset management of the assets itself on behalf of its investors.

According to Marc Ludwig, senior investment manager at DERECO, “New retail constructions right on the marketplace of sustainable cities and towns with a medium-sized catchment area and a high centrality rating or new residential properties with a full-range retailer under the same roof in good urban housing locations would be ideal. We’d conclude buying contracts from a pre-letting level as low as 40%, provided an outline building application has been granted approval.”

DERECO has recently bought just such properties for other single-family offices in German towns like Stade, Detmold and Siegburg.