Skjerven targets doubling Berlin residential investment
German investor and asset manager Skjerven Group has launched a new investment programme for institutional investors with a target volume of €150m. The equity base for the programme is being funded by third-party institutional investors, while Skjerven Group itself will be responsible for the investment and asset management.
REFIRE visited Skjerven Group recently in its new offices on Berlin's Kurfürstendamm, a testament to the company's rapid expansion on the back of its investment and privatisation experience in all corners of Berlin over the past ten years.
According to CEO Einar Skjerven, who has long been bullish on prospects in the German capital, “The investment program specifically targets Berlin´s residential properties in affordable market segments. In Berlin there is still an excess demand for housing, coupled with insufficient new building activity. This means that the capital is unlikely to lose any of its dynamic in the foreseeable future. On the contrary, the Berlin residential property market has never been more attractive.”
Skjerven plans to at least double the €40m it invested in the city last year, based on the deal flow through his offices, which are "between 20 and 30 offers a week". The company's strategy in residential has been to rent out or sell the apartments they've refurbished or re-positioned, using both a value-add and a core-plus investment strategy. This might involve converting an office into apartments, investing capital expenditure and repositioning the property.
Having invested all over the city in the past as part of its early history as a privatisation specialist, the company now focuses mainly on A- and B-locations such as Charlottenburg, Wilmersdorf and Mitte, with aerage deal sizes from €5m upwards to about €20m. It currently holds about 1,800 apartments in the city, valued at about €220m.
The new institutional fund has already bought its first asset, an apartment building in the Leibnitzstrasse in Charlottenburg in City-West for €11.3m, from a Danish family office. The property has 37 apartments with nearly 3,000 sqm of lettable space, along with 383 sqm of retail space.
The most recent residential report on Berlin has just been published by mortgage bank Berlin Hyp and advisor CBRE. It concludes that: average apartment rents rose by 5.6% last year to €9.00 per sqm/month; a record number of 32,000 apartment units are currently being built; condominium prices rose 9.6% in the city last year, while multi-family houses rose 15.7%; demand is leading to higher number of furnished apartments, and; about a quarter of all residential housing project developments in the country are in Berlin.