Deutsche Asset One acquires €90m residential portfolios for two separate account mandates from Union Investment
Deutsche Asset One, a specialist for residential real estate investments in Germany, has acquired 750 apartments valued at around €90 million ($104 million) for two separate account mandates from Union Investment. The apartments, located in Hamburg, Leipzig, Magdeburg and Saarbrücken, were traded predominantly as off-market transactions. Among the sellers were a number of German family offices. In the past 24 months, Deutsche Asset One has acquired residential properties valued at around €500 million ($579 million) for both mandates.
“For these mandates, Deutsche Asset One is an excellent investment and asset management partner, with nationwide expertise, providing very good access to market in the residential real estate segment. We are very pleased to be able to offer our investors access to a number of locations for attractive risk-diversified asset allocation”, said Bernhard Kraus, managing director of Union Investment Institutional GmbH.
Thilo von Stechow, managing director of Deutsche Asset One, added, “Based on a predefined set of criteria, we are able to identify attractive locations for residential real estate throughout Germany for a multitude of investors. Our continued growth, with more than €1 billion ($1.15 billion) of real estate assets under management, confirms our expertise in this area. In the next two years, we are planning to excecute further transactions worth around €500 million ($579 million).”
According to Empira's housing market report (August 2018), Leipzig and Magdeburg are the two most attractive investment locations in the new federal states. Both cities are experiencing unprecedented growth. In Leipzig, asking rents have risen 35 percent since 2008. According to Savills, Magdeburg's attractiveness was reflected in a 36 percent increase in transaction volume for apartments last year over 2016.
The city of Hamburg has seen a five percent growth in population over the past five years. 2017 was a record year for residential construction permits, nevertheless, the minimum target of 10,000 new homes per year (set by the government of Hamburg) has not been achieved yet. To that effect, asking rents in Hamburg have increased by nearly seven percent in the first half of 2018, according to JLL. Saarbrücken, in turn, recorded a net increase of 2,000 inhabitants in 2017. The city council plans to build 3,300 new apartments by 2030.
