Warburg-HIH Invest Real Estate is planning to invest €400m in German residential asset for a new open-ended fund.

The manager said the yet-to-be-launched Warburg-HIH Deutschland Wohnen Invest fund, which is intended mainly for regional banks and savings banks, has already received €150m pledges for its first acquisitions expected in the second quarter of the year.

The fund will target new-build housing developments in fast-growing residential locations inside metro regions and in stable standalone regions, the manager said, adding that existing properties can complement the portfolio if quality and returns match the fund’s objectives.

Carsten Demmler, managing director of Warburg-HIH Invest, said: “Residential investments will have a sustained stabilising effect within the portfolio. After all, it was the German housing market that proved extremely stable even during the COVID-19 pandemic.

“With that in mind, we offer this component to our investors as sector-specific diversification for their investment strategy in the real estate segment.”

Alexander Eggert, managing director of Warburg-HIH Invest, said: “Due to its sustainable investment strategy and the ESG guidance of Warburg-HIH Invest, the new residential investment fund will invest in modern energy-efficient residential projects.

“Publicly subsidised housing will also be a component of the portfolio. By integrating subsidy programs of the government-owned KfW banking group and regional subsidy programs we will generate secure long-term rent revenues for our investors.”

Hans-Joachim Lehmann, managing director of Warburg-HIH Invest, said: “We have existing know-how in the residential real estate segment. HIH Projektentwicklung, the developer arm of the HIH Group, provides us with long-term expertise in property development.

“Moreover, we already have more than €500m worth of assets in the residential segment under management.”

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