Boutique real estate investment manager Optimum Asset Management is launching its fourth German real estate fund, GREF IV, which is targeting a diversified portfolio of residential and commercial properties in Germany, particularly in Berlin. It’s a welcome vote of confidence in the capital city, which is currently witnessing the withdrawal of many international investors rattled by the city government’s plans to slam down the lid on rent and price increases.
Luxembourg-headquartered Optimum has about €1.5bn in AUM, which it manages for pension funds, endowments and insurance companies. Its main focus is in Germany and the USA. It specialized in smaller assets, typically priced between €10m and €40m, as against more typical ticket sizes of €40m+, which it says are favoured by its peers.
Targeting €250-€300 million, GREF IV plans to add value to well-located residential and office assets near major infrastructure and employment hubs. The primary target area is Berlin, with selected investments in high-growth, supply-constrained cities such as Hamburg, Dresden, Leipzig, Cologne and Düsseldorf.
GREF IV is Optimum’s fourth iteration in a series of strong performing German real estate funds with a focus on optimising mispriced and mismanaged residential and commercial assets. With the support of its 12-strong Berlin team, which includes nine German asset managers headed by André Gretsch, the firm has completed over €1 billion of real estate transactions in the region since 2006, establishing tailored asset improvement plans to enhance cash flows and create value by timely exits.
According to Alberto Matta, founder of Optimum Asset Management: “We are truly at home in Germany. We have invested successfully here for over a decade, and the factors that attracted us at the beginning still ring true today.
“Germany continues to benefit from a resilient economy, characterised by growth in services, public sector, and the housing market, whilst maintaining global competitiveness as a leader in macroeconomic stability and innovation. The region is also home to an attractive real estate market, represented by a strong occupier base and rising investment volumes.“
"Germany’s diversified market structure and the current reurbanisation of large cities create opportunities for residential investment. This, combined with the significant gap in residential supply and demand due to the growing population in major German cities, means we continue to see the significant opportunity to create value in this market.“
The firm’s track record includes Property I, the Berlin-focused real estate fund, which was fully realised in 2014, achieving an IRR of 19% and a 2.3x MOIC. Optimum’s Property II (2011 vintage) and Property III (2014 vintage) are centred on Berlin and Potsdam, with additional properties in Dresden forming part of the Property III portfolio. Property II and Property III have reported a total return of 250% and 149% since inception, respectively. Realised assets have achieved an IRR ranging from mid-teen to 30+%. (ssk)
