Engel & Völkers Investment Consulting supports portfolio transaction with 720 residential and commercial units
- Seller is Phoenix Spree Deutschland
- 34 residential and commercial buildings in Bremen, Hanover, Hildesheim, Verden, Delmenhorst, Kiel, Oldenburg, Lüneburg and Lübeck
- Buyer is BUWOG AG
Hamburg, 31 January 2018 – Engel & Völkers Investment Consulting GmbH (EVIC) has successfully supported the sale of a housing portfolio. Phoenix Spree Deutschland, an investor listed on the London Stock Exchange that specialises in residential property, is selling 34 residential and commercial buildings with space totalling around 41,000 square metres to BUWOG AG in a structured bidding process. The properties with 720 residential and commercial units are located in various regions of northern Germany, including Bremen, Hanover, Hildesheim, Verden, Delmenhorst, Kiel, Oldenburg, Lüneburg and Lübeck. EVIC prepared the transaction as a structured bidding process and subsequently carried out the sale process.
Investors pay Premiumfor Residential Portfolios
- Analysis of 600 transactions with a volume of 2.2 billioneuros
- Average premium of 1.6 times net cold rent
- Supply shortage of residential portfolios in the transaction market
Frankfurt, 21st November 2017 – An analysis of the first three quarters 2017 by Engel & Völkers Investment Consulting and Engel & Völkers Commercial shows that investors currently pay a premium of on average 1.6 times net cold rent when acquiring a residential portfolio, compared to single asset deals. Overall, more than 600 transactions (single and portfolio deals) within Germany have been advised and analysed, which sum up to a total of 1.16 m square metres and about 2.2 billion euros.
“The residential real estate market today is a clear sellers’ market and residential portfolios are in shortage. As the pressure to invest is enormous, institutional investors are willing to pay premium for high investment volumes. This wasn’t the case two or three years ago”, commented Kai Wolfram, Managing Partner of Engel & Völkers Investment Consulting GmbH.
Before every portfolio transaction, each property is evaluated separately by regional specialists of the E&V network. During the evaluation process, current prices in the micro locations are considered. The thus established values combined have been compared to the overall portfolio deal value.
Engel & Völkers Investment Consulting expands thecommercial section
- Gerold Springer and John Kamphorst responsible for the commercial section
Frankfurt, 26th September 2017 – Engel & Völkers Investment Consulting GmbH (EVIC) continues its expansion and reinforces the commercial real estate advisory sector. Gerold Springer (43) and John Kamphorst (38) are as of September 2017 Commercial Directors of the commercial section. The goal is to efficiently connect the regional E&V Investment teams, strengthen and expand the advisory competences and further increase commercial portfolio transactions.
Gerold Springer, business and real estate professional, previously employed in executive positions at Laborgh Investment (Berlin) and Lohnbach Investment Partners (Frankfurt), has more than 15 years of experience in M&A and transaction advisory for national and international investors. Springer started his career in 2002 with Ernst & Young Real Estate.
John Kamphorst has already been appointed since early 2017 and is member of the board. Holding a diploma in Real Estate Engineering and Management and having studied Real Estate Economics, he had worked with Ernst & Young Real Estate from 2005 until 2016 and had been responsible for strategic commercial real estate transaction advisory. Kamphorst is MRICS and RICS registered valuer.
Kai Wolfram,managing partner, commented: “With Gerold Springer joining, we have expanded our management with an experienced expert. Together with John Kamphorst, we now have a double management team in place specialized in commercial real estate. Therefore,we are certain that we can keep up with the growth pace of the past few years and continue with it, especially in commercial real estate transaction advisory.” Andreas Ewald, managing director of Engel & Völkers Investment Consulting, added: “The comprehensive network of Engel & Völkers is unique in its kind in Germany and brings invaluable advantages to national as well as international real estate investors. Together with our fortified team, we will establish more awareness amongst the market.”
EVIC, as a parent company and central platform in the Engel & Völkers network, Germany´s largest broker, has been active in the market since 2014 and combines global structures with local competence in the area. The company has focused on advisory, structuring and transaction management of portfolio transactions as well as buy-side mandates for institutional buyers in the Engel & Völkers network.
Institutional investors see an end in rapid priceincreases in residential real estate investments
- Yet, investors do not expect heavy price changes
- Investors focus more on project developments and existing investments
- Institutionalists often appear as alternative financiers
- Investors expect stability and reliability from newfederal government
München/Frankfurt, 11th October 2017 – The price increases in residential real estate come close to an end and stagnate in the medium-term on a high level. Heavy price chances are not expected by investors. This is one out of the many key take-outs of the fourth expert talk of Engel & Völkers Investment Consulting bearing the title “Residential real estate – the alternative-free asset class?”, which took place at the Expo Real Fair in Munich. There, the representatives of the real estate industry discussed the investment strategies of institutional investors in the German residential real estate market.
Other than Kai Wolfram, host and managing partner of Engel & Völkers Investment Consulting (EVIC), and Andreas Ewald, managing director at EVIC, invited Martin Eberhartd, FRICS and managing partner of Bouw fonds Investment Management Germany, Francesco Fedele, in the management of BF.direkt AG, Thomas Meyer, CEO at Wertgrund AG, Thomas Hegel, chairman at LEG Immobilien AG and Arndt Krienen,CEO of Adler Real Estate AG to the expert talk.
Due to the high sales prices, many investors focus on other growth opportunities such as re-densification in the company´s own stock or entering new project developments. Thomas Meyer elaborates: “The strategic question of appropriate re-investments in the current market environment can be answered with the rule of three: project developments, forward deals and value-add approaches. Mainly project developments offer the possibility to maximize yields. The development risk can be minimized by portfolio regulation for diversified investors. ”Thomas Meyer continues: “Each investor knows about the latest price developments in the German residential real estate market. However, an end of the heavy upward trend becomes more and more plausible due to the ever increasing amortization times. Therefore, it is economically advisable for institutional players to sell fully developed projects. This way, one may generate above average returns for corporations and investors.”
Arndt Krienen adds: “By buying portfolios that match our business model we have, also in 2017, further expanded by so far seven percent. We want to continue with our growth. However, alongside this year´s acquisitions, we have realized, that our strategy, growing by exclusively buying portfolios, has its limits. This is because the market offers fewer portfolios. More often, the portfolios offered sell at such a high sales price that they are no longer attractive to us. In these situations, development projects, densification or roof structures become more attractive for growth. This is why we are thinking about these topics at the moment. This shall not be seen as a replacement of our strategy but merely as an addition.” Other than the established asset classes such as residential and office real estate, institutional investors (insurances, supply factories) discover new investment opportunities such as financing project developments. Besides, institutional investors appear more often as alternative loan capital providers. This increases the all-time high competition intensity”, elaborates Francesco Fedele.
Moreover, the so far used method to invest in B-locations instead of A-locations has reached its limits. “When it comes to bidding processes, we have increasingly realized that price dynamics in B-locations have augmented. Sales price factors of 20 and more, which we have so far only encountered in metropolises, are no longer rare in other locations either. We don´t expect an end in this regard any time soon”, comments Thomas Hegel.
Despite the ongoing high price period, residential real estate is still asked for. “Germany, residential, stable cash flow: Barely no institutional investor would currently refrain from this completely safe triad. Especially now, with the European crises in Great Britain or Catalonia, investors appreciate Germany´s economic and political stability”, says Martin Eberhardt. Therefore, Kai Wolfram claims: “The future federal government has to make sure the investment climate remains reliable. Therefore, one may also question the cap on rent increases.” Andreas Ewald adds: “The real estate investment market in Germany is perceived as safe in this world. This is owed to Germany´s reputation as a well-organized and structured state as well as a sustainable and reliable economic power. A minority government or even new elections will harm Germany´s reputation. Therefore, it is desirable to have a stable governing coalition in place soon.”