Berlin-based Catella Residential Investment Management GmbH (CRIM) and Munich-headquartered Catella Real Estate AG (CREAG) have acquired four residential properties, including two in the micro and assisted living market segments, in Germany on behalf of the Catella Wohnen Europa (CWE) Fund. The combined value of the deals is in excess of €125 million and they all fall within the ‘affordable rents’ category.
The transactions encompass the purchase of a redevelopment project in Zossen, two new developments in Berlin and Würzburg, and an existing apartment block in Dortmund and will boost the volume of the fund’s portfolio to more than €1.2 billion. The number of apartments held in the vehicle is now over 6,000. The acquisitions were made through CREAG’s AIFM platform.
Benjamin Rüther, Head of Fund Management at CRIM, said: “The move to environmental as well as social impact investing is accelerating with the introduction of the EU’s SFDR regulations and residential real estate is a frontrunner when it comes to delivering positive outcomes in these ESG areas. Each of these assets tick the ESG boxes in their own way - three of the properties offer well-located, modern and sustainable accommodation at affordable rents for key workers and their families, while the fourth is a residential complex offering a wide range of housing and care options for the elderly and people with disabilities. These acquisitions meet a real need given the shortage of affordable housing in Germany, while also addressing social inequalities.”
Suburbs close to Berlin like Zossen are becoming more popular
In Zossen, to the south of Berlin, the CWE fund has acquired a former army barracks for approximately €38 million which is being converted into residential units. Savings in construction costs will allow rental levels to be kept comparatively low and deliver a lower environmental impact compared with a new build. The 14,439 sqm scheme, consisting of five three-storey buildings, is being redeveloped in two phases and will offer 207 apartments and maisonettes, each with a balcony or terrace and with a recreation area and playground at their heart.
Benjamin Rüther added: “Strong demand for apartments exceeds supply in Berlin and is pushing up rents, particularly now the Federal law court has thrown out the city’s rent cap as being incompatible with constitutional law. As prices in the centre of the city continue to climb, nearby suburbs like Zossen are becoming increasingly popular as residential locations, due to the relative affordability of rents in new developments as compared to similar schemes in the centre of Berlin. Rents in this property will be roughly 30-40% lower per square metre than those in central districts of Berlin, making these apartments very appealing to a wide range of tenants, including families.”
Berlin market remains virtually locked for low-to-middle income earners
The second acquisition was made in Berlin-Marzahn, the largest district for new housing developments when this part of the city lay within former East Germany, for approximately €25 million from T&T Grundbesitz GmbH. The 5,842 sqm scheme forms the second phase of a 237-unit development and comprises 72 apartments as well as a childcare centre on the ground floor. CWE acquired the first phase, consisting of 165 apartments over three buildings plus three commercial units, in 2020. The vendor was advised by Best Place Immobilien GmbH.
Michael Keune, Managing Director of CRIM, said: “New-build housing is difficult to find in Berlin, especially in districts where rents are still relatively low compared to more central areas and the turnaround in tenants is limited. New developments, such as the Berlin-Marzhan scheme, enable us to offer modern, affordable accommodation to key workers and their families, and its child-care facilities and easy access to the centre of the city will be particularly appealing to middle-income workers, who are being priced out of central Berlin.”
CWE buys into micro-living in Dortmund
The third acquisition of around €50 million comprises a recently completed residential complex in Dortmund offering 365 fully furnished micro-apartments, ranging in size between 22 and 49 sqm, plus 73 underground parking spaces. The 10,400 sqm apartment block is located in the well-known Kreuzviertel district directly adjacent to the headquarters of Dortmund’s BVB football club on Wittekindstraße/ Rheinlanddamm, near the Dortmund University of Applied Sciences, the trade fair grounds, the Westfalenstadion and Westfalenpark.
The seller, Revitalis Real Estate AG, was advised on the transaction by law firm Hogan Lovells International LLP Düsseldorf. CRIM was legally represented by REIUS Rechtsanwälte Hamburg.
Wellness in Würzburg
The Catella Wohnen Europa Fund has also acquired a 3,231 sqm residential project for seniors and disabled residents in Würzburg to the southeast of Frankfurt for around €10 million. There is robust and growing demand for this type of facility, which is located in the south of the city, and also comprises a wellness/therapeutic centre.
Michael Keune concluded: “These acquisitions demonstrate the strengths of the Catella Residential platform, which now has more than €5 billion of residential real estate across Europe. The breadth of our expertise combined with our local networks enables us to source properties which offer very real benefits in terms of quality and affordability to residents, but also provide our investors with long-term, secure income and the knowledge that their investment is being used to address social issues arising as a result of the shortage of suitable homes across Europe.”
About Catella Residential Investment Management GmbH (CRIM)
Catella launched its first European residential fund in 2007 with a volume of €1.6 billion and it has since achieved an average net return for investors of 9.0% per year until the end of Q1 2021. The team also launched the first dedicated European Student Housing Fund in 2013.
CRIM is a subsidiary of the Stockholm-based Catella AB Group and its residential real estate business comprises portfolio management, acquisitions, sales and asset management. CRIM manages and advises several funds and mandates and has assets under management of €5.0 billion across 10 European countries.
For more information contact:
Lisette van der Ham
Head of PR & Corporate Communications
Catella Residential Investment Management GmbH
Upper West, Kantstraße 164, 10623 Berlin
M: +31 (0)6 83200561