Developer and investor Tishman Speyer is launching a new residential fund for German institutional investors. It is targeting a volume of €500m and distributing a yield a yield of 3.5 to 3.75% per year.
The company described the "Tishman Speyer Wohnen Deutschland" (TWSD) fund as a Spezialfonds focusing on the acquisition of centrally located and well-connected new residential properties in cities and metropolitan regions in Germany with stable rental demand, positive demographic trends and strong regional economies.
According to Germany CEO Florian Reiff, the assets should be "not luxury, but of high quality, and affordable." Rent level is likely to be €10.00 to €13.50 per sqm.
Tishman Speyer, who apart from prestigious office towers has developed more than 15,000 residential units globally in recent years, said that a catalogue of criteria for sustainable investment in residential real estate has been developed for the fund, which defines, among other things, ESG purchasing criteria as well as minimum standards in terms of building quality and fittings.
To manage the fund, the company has also boosted its team with new experienced staff. Charles Smith has been appointed Senior Director, while on the transaction side, Guido Boltes and Alexander Kohrs also join the team. All three come from Corestate Capital, with Smith being responsible for fund-raising and business development, while Boltes and Kohrs were involved on the residential invesment team.
A second residential fund, with a value-add focus and a higher return, is also in the process of being prepared, according to CEO Reiff. He said recently that the company was already active in the USA, South America and Asia in residential markets through club deals, and that the plans for Germany and Europe were part of a catch-up plan. The yields in the sector are still attractive compared to alternatives, he said, while the COVID pandemic has shown how stable the German residential sector is.
