Freshly-listed Ado Properties buys a further 1,000 units in Berlin

The freshly-listed Ado Properties, which focuses on residential properties in Berlin, has wasted little time in putting the nearly €200m proceeds of its July IPO to good use. It has just bought a further 1,001 units in the capital in a share deal for €137m, of which 885 are residential and 116 are commercial units. The sellers were several German entities held by international funds and private investors.

Ado said the newly-acquired, mainly Alt-Bau assets are 70% located in central districts such as Prenzlauer Berg, Kreuzberg and Neukölln – neighbourhoods with high rental growth potential – along with the northern district of Pankow.

Current rents being harged are €6.50 per sqm/month in Pankow and somewhat higher in the other neighbourhoods, which Ado believes can be raised to up to €8.80 per month for the better quality units. The commercial units bring in €8.20 per sqm/month and a vacancy rate of 12%. Overall, the portfolio generates a current annual rent roll of €6.4m.

Ado Properties CEO Rabin Savion said of the latest deal, "The acquired portfolios they fit very well into our strategy and we see strong accretion potential to our existing portfolio. We have identified substantial improvement opportunities suitable for our unit investment program as well as interesting privatization projects.”


On the overall market in Berlin, Savion remains bullish. “Berlin is now one of the most exciting cities in Europe, and Berlin’s property market is one of the most dynamic in Germany,” he said. "Over the last four years, Berlin’s population has grown by an average of 40,000 people per year. This greater population is faced with a low supply of new residential construction. Thanks to our insider knowledge of this market and our highly efficient in-house management platform, we are in a position to react to market developments very quickly. This is how we identify opportunities and invest in Berlin’s most promising neighborhoods."

"Although the market is facing more challenges with governmental regulations such as housing rent caps, the Berlin property market still harbors a lot of potential."