Apeiron Capital, Kauri to invest €1bn in German residential sector

Apeiron Capital and its German partner, Kauri CAB Management, are looking to invest up to €1bn ($1.12bn) in the country’s residential sector.

Vojkan Brankovic, principal at privately held Apeiron, said the two companies had backing from Middle Eastern and Asian institutional investors, as well as large family offices.

Brankovic said the joint venture would look to invest the capital over the next 12-18 months, with assets being upgraded and held for 3-5 years.

Hagen Kahmann and Julian Brown’s Kauri CAB, which in the past has worked with Pramerica Real Estate Investors in a Luxembourg-based joint venture, oversees day-to-day management of the portfolios.

“We feel we need to move fairly quickly, as there’s been a yield shift in the past 12 months,” he said. “There are still very good transactions to be done.” 

Apartments in Berlin remain the partnership’s main focus, Brankovic said, with assets within a 100km radius of the joint venture’s base in the German capital also being considered.

“The city offers scale for investors and is probably Europe’s largest rental capital,” he said. 

The partnership has invested €100m in Berlin’s residential sector with an unnamed sovereign wealth fund.

The joint venture bought three portfolios in the German capital, following up on an initial €130m deal to buy the 120,000sqm Zeus portfolio, spread across Magdeburg and Berlin, from Zentral Boden Immobilien (ZBI), late last year. 

The latest portfolio, of 900 apartments, took the partnership close to its original €300m investment target.

Germany’s residential sector, Brankovic said, is still dominated by domestic investors.

“The market is much more institutionalised than other markets,” he said.

Listed on Deutsche Börse’s MDAX, Berlin-based Deutsche Wohnen, which currently holds 141,900 residential units, recently announced plans to buy rival LEG Immobilien.

The deal will create a €17bn portfolio.

The German residential sector is driving growth in the country’s listed sector, which had a market cap of €48bn in August, delegates at the European Public Real Estate Association’s (EPRA) annual conference in Berlin heard this month.

The cash flow on offer from German residential property makes the sector a “good hiding place”, with potential for growth, PGGM’s head of listed real estate Hans Op’t Veld said.