Domicil snaps up 2,535-unit German rental portfolio

Investment and asset manager Domicil Real Estate Group has acquired a portfolio of 86 residential properties in Germany from a fund of Swiss Life Asset Management as part of an asset deal.

Financial details were not disclosed.

The assets are spread across 20 locations in seven clusters throughout Germany, and comprise 2,535 rental units in total. Of these, 2,389 are residential units.

The majority of the properties are located in metropolitan regions, with more than 50% in state capitals. The total lettable area amounts to 156,436 m2; the vacancy rate is 6.8%. The seller is a fund of Swiss Life Asset Managers.

Andre Schmöller, chief investment officer of Domicil Real Estate said: 'The purchase of the 'Now’ portfolio is another important step in our growth strategy and promises enormous development potential.

'The concentration on economic conurbations means that we can expect units to be easily lettable and a high level of demand for the condominiums. The current vacancy rate also provides an opportunity to make more rented housing available and to stabilise rental income.'

Michael Essl, chief investment officer of Swiss Life Asset Managers in Germany added: 'Despite this sale, real estate remains one of our most important asset classes. In terms of our active portfolio management, this is an important step for us to further diversify our portfolio.'

The residential units are spread across regions around Lübeck, Berlin, Bremen, Dresden, Leipzig, Rostock, Hanover, Erfurt as well as Dortmund, Gelsenkirchen and Dusseldorf – and are thus concentrated in some of Germany's fastest-growing economic regions.

The locations are primarily in the north and east of the country, as well as in North Rhine-Westphalia. The homogeneous and close-knit property structure reduces management costs.

'In addition to the locations, it is above all the apartment fit-outs that are ideally suited for letting. The acquisition is very interesting for tenants as well as for retirement provisions on the part of capital investors,' says Daniel Preis, chief sales officer of Domicil.

The average apartment size of 61 m2 meets the demand for two- to three-bedroom apartments. More than 85% of the apartments are smaller than 80 m2. Since 2015, around 40% of the residential units have been refurbished.

In addition, the former owner invested approximately €15.3 mln in the sustainable management of the portfolio.

On the seller side, CBRE handled the sales process, while Stock + Partner Rechtsanwälte provided legal advice.

Domicil was advised on legal aspects of the transaction by CMS Hasche Sigle, while Case Real Estate acted as technical partner for the purchase.


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