Catella, LBBW launch regional German fund

The German arm of Stockholm-based Catella Real Estate and regional German bank Landesbank Baden-Wurttemberg (LBBW) are launching a fund aimed at institutional investors which will focus on investment in southern Germany. Catella said the fund is its first joint venture with LBBW.

The fund (ImmoSpezial - Wirtschaftsregion Suddeutschland) will have a term of 10 years and target an investment volume of EUR 150 mln, which with 50% leverage may rise to EUR 300 mln. It will focus on core and core-plus office, retail, logistics and mixed-use assets in the Stuttgart and Rhein-Neckar regions as well as the cities of Freiburg, Augsburg, Ingolstadt, Nuremberg/Erlangen, Munich and Regensburg.

The new fund will target individual assets of between EUR 8 mln and EUR 20 mln each. It will aim for a return of 5-6% and seek to pay out an annual dividend of 3.5-4%. LBBW will place the fund while Catella will be responsible for acquiring and managing assets as well as fund management.

Andreas Kneip, head of Catella's German fund manager, sees distinct advantages to investing in southern Germany. 'Baden-Wurttemberg and Bavaria are economically robust markets on a national scale. The area is home to six of Germany's seven leading growth regions with the highest income and employment rates nationally.'

In July, Catella's German arm and Swiss private bank Sarasin similarly announced they were launching the first institutional real estate fund targeting sustainable buildings in high-growth European cities. Initially focusing on Germany, France and the Nordic states, Sarasin Sustainable Properties- European Cities is structured as a German special fund and aimed primarily at Swiss pension fund investors.

Catella Real Estate was founded in 2007 and manages real estate funds totalling over EUR 1 bn.