Berlin-based Catella Residential Investment Management (CRIM) has purchased two German residential developments in Hamburg and Dortmund for about €142m.
The assets were acquired from property developer Gröner Group on behalf of the Catella European Residential Fund III (CER III), bringing the total value of the fund’s assets under management to more than €500m.
The fund was launched in 2019 and has continued to raise capital from investors, most recently German pension funds including Nordrheinische Ärzteversorgung.
Michael Keune, managing director at CRIM, said: “The CER III Fund launched just two years ago into the sweet spot of surging institutional investor appetite for diversified European residential assets with the highest sustainable and societal ESG credentials.
“The rise of residential at the top of the European real estate sector investment hierarchy has continued unabated through the pandemic, as the resilience of the returns from the type of affordable rental properties Catella is targeting and the hedging shield they offer against random extreme ‘Black Swan’ market risks, such as COVID-19 and climate-change events, are growing in the awareness of pension funds and insurers.”
The larger of the two developments – a 19,268sqm project in Hamburg – was purchased for €120 million and is located in the western quarter of Altona, adjacent to the Altonaer Volkspark.
Upon completion, Bahrenfelder Carrée will include 289 residential units, four commercial units and 177 car-park spaces. The first phase of construction is expected to complete this year and the second phase is scheduled to finish in 2022.
Patrick Au Yeung, fund manager of CER III, said: “Bahrenfelder Carrée will be a notable addition to the neighbourhood, with its broad mix of residential housing and modern design contributing positively to the overall improvement of the area and providing much needed homes.
“Its 60 subsidised residential units and construction to the energy-efficient KfW-55 standard, which will include a central ventilation system and ecological building materials, make a positive societal and environmental impact in line with the fund’s ESG goals.”
The Südtribüne project in Dortmund was acquired for around €22m and comprises 63 residential units, a retail area and 54 parking spaces.
It is being developed above The Bunker, part of a network of Second World War air raid shelters open to the public.
“The Südtribüne project is a great example of how to successfully repurpose inner-city properties that have fallen obsolete,” said Keune.
“It forms the cornerstone of a sustainable housing quarter and is part of a wider regeneration scheme which will substantially improve the location’s attractiveness as a residential destination.
“These two acquisitions have taken the value of the assets under management in CER III to over the half a billion euros mark, meaning we are well on the way to our mid-term target of €1bn AUM.”