20-party house with development potential changes hands
Rohrer Immobilien has successfully brokered the sale of an apartment building with 20 residential units in Oberschleissheim near Munich. The purchase price was not disclosed. The building was built in 1965 and has a total living space of around 1,170 square meters. The buyer is a consortium of private investors, the seller is a community of heirs.
The brokered property belongs to a segment that is currently meeting exceptionally high demand: existing properties in need of renovation. In particular, apartment buildings that require extensive investments in the property, such as windows, heating systems or building envelopes, are currently increasingly in the focus of investors.
"Many owners are faced with the challenge of having to cope with necessary energy-efficient renovations. Since some of the post-war buildings have a considerable backlog of renovations, complexity and financial hurdles are increasing. At the same time, it is precisely these properties that offer buyers the opportunity to sustainably increase value through modernization. That is why we are currently observing a very high demand for properties with development potential – provided that the location and micro-location are right," says Sven Keussen, Managing Partner of Rohrer Immobilien.
According to Rohrer Immobilien's observations, apartment buildings in need of renovation require discounts per square metre for modernisation and loss of rent, depending on the rent level and the need for renovation. Technically and commercially experienced companies have specialized in this and see opportunities and interesting future prospects for their investments in the assumption of risks.
Often, it is also the decision-making processes of "rugged" owners' associations that stand in the way of modernization, with the result of loss of income and value.
"The market is more differentiated today than it was a few years ago. While modernised buildings continue to fetch a fair price, properties with a renovation backlog are becoming increasingly attractive because specialised buyers recognise the development potential. These properties are also meeting with an exceptionally broad demand in the Munich area," Keussen continues.
According to Rohrer Immobilien, the transaction reflects a market trend that has been increasingly intensifying for several months. Investors are once again turning their attention to existing properties whose future lies less in its current state and more in its development potential. Communities of heirs, on the other hand, realize that their properties require more focus on investment and determination.
The successful conclusion is therefore not an isolated case. Rohrer Immobilien is currently supporting the marketing of another apartment building of a comparable size and similar year of construction in Puchheim in the Munich area. The current great response underlines the continuing high demand for viable portfolio properties.
