ABG Real Estate Group and HanseMerkur Grundvermögen are planning to launch a joint fund for residential project developments and redevelopments in Germany. The “Residential Performance Partners” is aimed at institutional investors, in particular insurance companies and pension funds.
The planned fund structure provides for an equity volume of EUR 200 to 250 million. HanseMerkur and ABG Real Estate Group intend to participate with a significant co-investment of at least 20% of equity. The fund is aiming for an IRR return in the lower double-digit percentage range p.a.
The “Residential Performance Partners” is to invest in project developments and redevelopments with a focus on housing. Selected refurbishments and conversions are also possible, such as the conversion of office potential that is no longer used into forms of residential use. The total investment costs per project are in the range of EUR 60 million to a maximum of EUR 150 million. A possible starting object is currently under review.
Regionally, the investment focus is on Germany’s ten leading metropolitan regions as well as on economically and demographically stable university and science cities. ABG Real Estate Group has five locations throughout Germany and will ensure operational proximity to the respective real estate markets, as will HanseMerkur Grundvermögen with its six regional offices throughout Germany.
Malte Andes, Deputy Chairman of the Board of HanseMerkur Grundvermögen, says: “There is still a shortage of housing in Germany. With the new residential development fund, we are combining our capital strength and real estate know-how with the proven development expertise of the ABG Real Estate Group. The fund builds on the successful track record of both partners, with HanseMerkur Grundvermögen alone managing 56 residential properties, among other things. The cooperation offers investors a high degree of structural and implementation security.”
Ulrich Höller, Managing Partner of ABG Real Estate Group, emphasizes: “The renewed cooperation with HanseMerkur Grundvermögen is based on several jointly initiated projects and a shared understanding of quality and values. With the fund, we are deepening this partnership in order to advance residential developments with substance and make a concrete contribution to the creation of housing.”
ABG Real Estate Group and HanseMerkur Grundvermögen have been working together successfully for several years. Current joint projects include the “Central Parx” and the “Palais Rossmarkt” in Frankfurt.
