Invesco dips toe in Germany with first residential acquisition

Although global investment manager Invesco Real Estate has been a sizeable player for several years in multi-family housing in the US as well as having several projects under its belt in Asia-Pacific, the group has just made its first foray into German – and indeed European - residential with a €62m forward purchase of a prominent new residential tower in Frankfurt, the Westside Tower.

Invesco is buying the property on behalf of a club made up of German institutions, from whom it has a mandate to invest €250m in European housing. The deal involves a forward purchase of a freehold site in the newly-developed Europa Quarter between Frankfurt’s main train station and the trade fair grounds, along with a commitment to finance development of the 21-storey tower in partnership with Hamburg-based Revitalis Real Estate. The tower will have 248 apartment units across 23,500 sqm of lettable space, along with shops on the ground floor and crèche facilities for children. The building is expected to be completed by end-2015.

According to John German, Invesco’s newly-appointed director of residential investments in Europe, “This is our first step in providing the opportunity for our institutional investors to access this increasingly important sector. The Westside Tower project will produce an institutional grade, market-leading product in a location with proven investor and rental demand.” German said that Invesco was actively looking at further projects in other German cities, particularly Hamburg, Düsseldorf, Berlin, Freiburg and Dresden.

In particular, negotiations to buy the Prager Carré in Dresden are thought to be well advanced, which would bring investment us to over the €100m mark.  The asset if bought would be allocated to the same Spezialfonds as the Frankfurt property, which it has set up with Master KAG provider Instituional Investment Partners (2ip)