BVK funds buy more German residential, Austrian retail

Barely a month goes by without another initiative from BVK Bayerische Versorgungskammer, Germany's largest public sector occupational pension fund, which has notably increased its exposure to real estate globally over the past few years.

January has been no exception, with a big acquisition of micro-apartments in Germany and, separately, the launch of a €250m retail park fund in Austria.

With €69bn of assets under management, BVK was the largest direct buyer of European real estate last year with €2bn of investments, ahead of even Norway's huge sovereign pension fund at €1.7bn.

In Germany, Corestate Capital Holding is buying five residential housing development projects worth €670m for BVK in a forward deal from project developer CG Gruppe. Corestate said the projects are made up of over 1,700 newly built micro-apartments. The transaction was a forward-funding deal for the real estate umbrella fund set up for BVK on the Luxembourg-based AIF platform of Universal-Investment.

The Luxembourg-based Corestate and Universal have worked for BVK on big real estate investments over the past few years. Corestate teamed up with BVK in October 2016 to launch a €500m European fund targeting micro-apartments.

"Corestate has built a superior deal sourcing network over many years. Thanks to that we benefit from an excellent access to great product. Although the markets are flooded with capital and investors are looking for the right product, we are facing the New Year 2018 with strong confidence due to our current asset pipeline of over €5bn," said Thomas Landschreiber, chief investment officer at Corestate.

The buildings – all high-rise - are located in Dresden, Dusseldorf, Frankfurt/Offenbach, Cologne and Leipzig. They are located in the Kaiserlei district between Offenbach and Frankfurt (632 apartments with 31,500 sqm, 6,200 sqm commercial space), in Dresden across from the Zwinger (191 apartments with 11,100 sqm, 3,300 sqm commercial space), in Düsseldorf (423 apartments with 22,600 sqm and just under 1,000 sqm commercial space by 2021), Cologne (200 apartments and 11,600 sqm commercial space to be modernized for large office tenants) and Leipzig (296 apartments with 16,000 sqm and 4,300 sqm commercial space).

Separately, BVK and fund manager Universal-Investment have teamed up with Blue Asset Management to launch a retail park fund, primarily investing in Austrian retail parks in established locations, with a focus on established and modern retail concepts that primarily provide local and basic services for the catchment area. This includes retail parks and centers of city districts, specialist stores, city markets, convenience stores in city districts and local supply centers.

The fund volume is put at €250m. It has already made its first investment, eight retail properties with total lettable space of about 70,000 sqm.

BLUE Asset Management, based in Munich with an office in Vienna, is a full-service asset manager specialising in retail and office properties. It currently manages a portfolio with a market value of around €1.4 billion for international institutional and privateinvestors. Its main geographical focus is on Germany, Switzerland and Austria.