Scarcely has the dust settled on the recent decision by Germany's Supreme Court to overthrow the Mietendeckel, or rent freeze, but international capital is already coming back to Berlin, hopefully in force.
The latest fund to focus on housing in the German capital is pan-European investment manager Europa Capital's new value-added fund, which is making €150m available for acquisitions. The London-headquartered group is teaming up with local Berlin specialist Skjerven Group in a joint venture to realise the fund's potential.
The mandate of the new joint venture fund is to build up a Berlin property portfolio, centred on residential but adding hotel and commercial space as opportunities arise. The JV has already made its first acquisitions. Skjerven, as local partner, will act as investment manager, asset manager, and provide the sales organisation for the sale of individual residential units.
According to Einar Skjerven, founder and CEO of Skjerven Group, “We are strengthening the new joint venture through our high level of market knowledge and acquisition experience in Berlin. There are currently good entry options for opportunity-oriented investors like Europa Capital and ourselves.”
James Farmer, Europa Capital partner for origination and acquisitions, said, “We have been monitoring the Berlin residential market closely over the last year and firmly believe that the underlying fundamentals, in particular - favourable demographics, economic growth potential and limited housing stock - are, in combination, supportive of investments in this asset class.”
Europa Capital, founded in 1995, has launched 13 real estate funds with a volume of more than €12.1bn across 21 European countries. It is majority owned by Mitsubishi Estate Co., which with Europa Capital management, has been building up a suite of open-ended investment products in line with Mitsubishi's investment products across the US and Asia.
Skjerven started out in Berlin in 2006 as an investor and trader in Berlin properties, and has since completed more than €1.7bn of deals in the city. It now offers a full range of transaction, asset management, financing and fund management services, as well as advising institutional investors and family offices. Skjerven last year bought at least four residential portfolios in Berlin for Swedish group Heimstaden Bostad AB, for whom it also acts as asset manager in the capital.
