INTERNOS enters German student housing market

The €3.6 billion owner-managed real estate fund management group INTERNOS Global Investors and the family office Somerston Group have jointly acquired a 27.5% stake in Deutsche Real Estate Funds Advisor S.A.R.L. (DREF) a real estate investment manager specialising in the German student accommodation market.

Andrew Thornton, chief executive of INTERNOS, said DREF had established a strong track record of financing, developing, modernising and managing student accommodation in Germany. “There is still a significant opportunity to increase institutional investment into student housing in Germany and we very much see this as a long-term strategic shift that we would like to exploit,“ he said. “This investment is in line with our strategy of investing in buildings where populations rest their heads, as this strategy should provide institutions with maximum comfort about future economic volatility.”

Following the deal, Bauer Group will remain the majority shareholder in DREF. Bauer has already completed studentresidence projects in London, Munich, Bremen, Oldenburg, Osnabrück and Regensburg. Andrew Thornton, CEO of INTERNOS, will join DREF's advisory board and Shaun Robinson, CEO of Somerston Capital, the investment advisor and asset manager to the Somerston Group, will join DREF's management board. DREF’s founder and CEO Felix Bauer said that DREF was working on an imminent bond issue to finance its further student housing projects.

Separately, INTERNOS also closed on the €53m acquisition of the Triforum complex in Cologne as part of its Hotel “Value Add” mandate via the Master-KVG* provided by institutional investment partners from Hamburgische Immobilien Handlung (HIH). The 24,000sqm Triforum complex, near Cologne’s citiy centre, comprises a Park Inn Hotel and circa. 15,000sqm of office space. The hotel is operated on a long lease under the Park Inn brand and the office space is fully let to high quality tenants. This brings to 15 the number of hotels in INTERNOS’s portfolio, valued at nearly €500m.

According to Jochen Schaefer-Suren, the portfolio manager for INTERNOS’s hotel division, “This year we plan to deploy an additional €200 million plus into hotel real estate from the remaining capital of the INTERNOS “Core” Hotel Real Estate Fund and the Hotel “Value Add” mandate… We have also begun to explore resort hotel acquisitions and mezzanine funding of hotel developments for one of our institutional investors.”