Commerz Real and Wertgrund Immobilien have paid €70m to forward fund a 191-apartment project in the eastern German state of Saxony.
The Königshöfe asset in Dresden, which would become part of the portfolio of the Commerz Real open-ended real estate fund Hausinvest, was acquired from the project developer CG Gruppe.
The construction project is scheduled to begin in the fourth quarter of 2019 is expected to be completed by 2022.
Königshöfe has a net dwelling area of 14,700sqm with 266 underground car parking spaces.
Commerz Real said Wertgrund will be in charge of leasing and property management.
To date, the Hausinvest fund, which has assets under management of approximately €14.9bn, has primarily invested in commercial real estate, with residential property as an addition in individual properties.
In April this year, the Hausinvest fund announced plans to invest about €2bn in German residential real estate within the next five years by teaming up with Wertgrund.
Earlier this month, the new partnership acquired its first asset as the venture agreed a forward funded deal to buy a new residential complex construction in Darmstadt from MAG Projektentwicklungs.
Commerz Real said the Königshöfe project is the second purchase in the framework of a partnership that was launched two months ago.
Thomas Meyer, the chairman of the board of management of Wertgrund Immobilien, said: “Project developments in such an attractive inner-city location tend to be rare nowadays, not only in Dresden but in the majority of dynamically developing cities in Germany.”
Mario Schüttauf, Hausinvest’s fund manager, said: “Dresden, as a burgeoning metropolis with growing demand for residential property in the premium sector, and the top location in the historic baroque district make Königshöfe a true core property.”