FAP nearly doubles revenues as bank caution increases

FAP Group, the independent Berlin-based advisory company for real estate capital-raising and structuring, said it had a record year in 2020, with revenues increasing by 92% over 2019, despite the onset of the COVID-19 pandemic.

Over the year, the group concluded 26 projects and structured capital for properties worth over €1.03bn, up from €801m the previous year. Foremost among its refinancings was a residential portfolio located across several mid-sized German cities, with a financing volume of about €230m.

The group’s “FAP Balanced Real Estate Financing I” debt fund, launched at the end of 2018, has distributed a volume of over €65m over the past several months. The fund allocates subordinated capital to existing properties, revitalization projects and developments in Germany.

Among the projects financed by the FAP debt fund is a revitalisation on Düsseldorf’s Königsallee, the development of a plot in Frankfurt, and maximising financing for the acquisition of a residential asset in central Berlin, close to the KaDeWe department store. The largest ever fund commitment, in the high double-digit millions, was also made last year by a German insurer.

According to Curth-C. Flatow, founder and managing partner of the FAP Group, “The year 2020 was the most successful one in our history so far. Banks have become increasingly cautious in financing property developments during the COVID-19 pandemic, and this is where we are filling the gap. At the same time, structuring of classic first-tier financing is also getting more complex; the need for professional advisory is rising.”

Flatow added that he’s expecting even further growth in 2021. “We are experiencing extremely high demand both from financiers as well as credit seekers. Our target this year is to increase assets under management to around €500m.”

Hanno Kowalski, managing partner of FAP Invest, which manages the FAP debt fund, said: “Our fund strategy is gaining significant traction in the current market environment, resulting in its successful closure over the coming months. A successor fund is already in the starting blocks.”

With its two main business lines FAP Finance and FAP Invest, the company brings together investors and those seeking capital, structuring both classic debt financing on real estate deals, as well as sourcing mezzanine capital all the way up to senior, bridge and whole loans. Since its founding in 2005, the group had advised and structured more than €16bn of capital.