Berlin-based property investor Capital Bay has launched an open-ended residential fund with an initial investment of around €260 mln in 1,900 German residential units.
The special alternative investment fund (AIF), dubbed CB Wohnimmobilien Deutschland, focuses on residential properties in the top seven German metropolitan regions and in sustainably growing German cities with more than 100,000 inhabitants.
Its initial purchase comprises properties in Hanover, Dresden, Fürth, Erfurt, Lübeck, Kiel and Nuremberg. All of the properties are located near the city centre, are in the affordable rent category and generate direct cash flows, according to Capital Bay.
'We have thus already implemented our investment strategy and developed a broadly diversified residential property portfolio with stable distributions and returns and a core-plus risk profile,' said Torsten Doyen (pictured), managing director of CB Capital Management.
Capital Bay said that the calculated rents in the fund are around 20% below the current market level and in the sale an average of two factors was deducted from the purchase factor, in contrast to standard market practice.
'Our target IRR of 4.1% is therefore extremely valid and would also withstand market corrections,' added Doyen. 'In the fast-growing cities, in particular, there is not enough new residential construction to meet the demand and most of it is taking place in the upper rent and purchase price segment due to the high costs of development and construction. Demand for apartments with affordable rents will therefore significantly outstrip supply in the future, too.'
The fund's administrating investment company is Hansainvest.
