Round Hill returns with renewed ambitions to German housing

The UK-based private equity group Round Hill Capital has kicked off a new strategy of investing in German residential housing by buying a portfolio of 114 units in Hamburg, the first in what it says will be a string of investments in 15 German metropolitan regions. The company is suggesting that it has a war-chest of €1bn for further investments in the sector.

Round Hill is no stranger to either Germany or the residential segment. Back in 2007 it acquired the 31,000-unit Vitus Group from a Blackstone-led group of investors for €1.6bn, and its team upgraded and consolidated the Vitus Group holdings into a platform which ultimately owned and managed more than 50,000 homes. The company says this led to an increase in EBITDA by over 20% and decreased vacancy on the portfolio by 30%, simultaneously increasing rent by an average of over 2.5% per year.

Following sizeable disposals, it then sold the core Vitus holdings to Deutsche Annington, the precursor to today's Vonovia, for €1.4bn. Vonovia is now the largest residential landlord in Germany.

With its residential management team largely intact, Round Hill has clearly regained its appetite for the sector. According to founder and CEO Michael Bickford, "The German market exhibits strong macro fundamentals, favourable housing demand/supply dynamics and robust economic performance… We look forward to actively managing and repositioning the portfolio and continue to be active in the German market for other portfolios and assets with similar value characteristics."

"Taken together with our proven investment and operating expertise, we look forward to building a substantial residential platform in key cities across Germany supplementing our residential businesses in other European markets."

With more than 53,000 housing units under management across Europe, Round Hill is a major private landlord in several countries, including the Netherlands, where it has invested over €600m in the last three years, and the Czech Republic, where it has invested more than €700m in refurbished former miners' housing in Ostrava.

The group is also a strong player in the student housing sector. It built up the nearly-2,500 unit Nido student housing portfolio in London which it bought from Blackstone in 2012 and sold it three years later to US investor Greystar for Stg£600m. Here, too, Round Hill is coming back for more and in January this year established a new joint venture with Starwood Capital to buy six purpose-built student buildings in the UK for Stg£120m (about €139m), indicating that it was targeting the building-up of a platform of up to Stg£1bn.