New venture plans €300m of new Germany residential buys

Berlin-based residential property specialist Kauri CAB Management and Stockholm-based Apeiron Capital have formed a joint venture with an international sovereign wealth fund to invest in German housing. With initial equity capital of €100m, the joint venture plans to buy portfolios and individual property assets across Germany, initially targeting a portfolio size of €300m, including debt.

The JV has already closed on a first acquisition of 1,675 residential and 105 commercial units across 61 separate buildings in Berlin and Magdeburg for €130m in an off-market deal from Erlangen-based residential specialist ZBI, the companies said. About 70% of the so-called Zeus portfolio, most in period-style buildings, is located in Berlin, with 30% in Magdeburg. Senior financing for the deal was provided by UniCredit Bank.

“German residential property continues to be an attractive proposition,” said Kauri CAB’s managing director Hagen Kahmann. “Our new joint venture brings together a group of investors with a strong track record in this space. This deal is exciting because of the multiple routes for optimisation that the portfolio offers. Berlin offers an attractive long-term structural demand-supply imbalance for rental housing and is one of the fastest-growing capital cities in Europe.”

The principals of Apeiron added: “The returns on offer from northern European residential property make the asset class increasingly attractive to investors and we are seeing a growing number of excellent investment opportunities particularly across Germany. With the backing of a major global sovereign wealth fund we are well placed to capitalise on these.”

Since its foundation in 2008, Berlin-based Kauri has managed about €200m of residential assets. In 2011, it teamed up on a €120m JV on Berlin apartments with Pramerica Real Estate Investors, the London-based arm of US insurer Prudential Financial. The joint venture sold a chunk of this (25 separate assets) for €78.6m earlier this year. Apeiron is a private principal investment and asset management firm focusing on real estate in the UK, Germany and the Nordics.