Berlin-based Catella Residential Investment Management (CRIM) and Catella Real Estate have acquired two residential properties in Berlin and Hamburg for over €90 mln on behalf of the Catella Modernes Wohnen Fund.
The acquisitions boost the total investment volume of the fund to €300 mln.
The latest purchases include a new development in Berlin-Marzahn, comprising 279 one-to-two room apartments, many of them with balconies, as well as a commercial unit with a total rental area of 9,845 m2.
The project was acquired from the Livos Group, a Berlin-based developer, for around €50 mln.
According to Catella, the introduction of the Berlin rent cap at the beginning of 2020 has already led to a 10-20% drop in prices for project developments comprising large residential units in good to very good locations in sales to institutional investors.
The firm suggested that this has resulted in the 'near-total collapse in supply of new rental housing built on behalf of municipal housing companies. Many project developers are now focusing on selling larger residential units as owner-occupied apartments and, in some cases, they are holding on to the land or reselling it'.
Michael Keune, managing director at CRIM, said: 'The project we have acquired is part of a local development being undertaken by the municipal housing company to create space for small-scale businesses and low-budget retailers alongside subsidised housing and rental accommodation for senior citizens.
'We believe this neighbourhood development has strong potential for the future and will be crisis-proof as it meets the urgent need for affordable, small-scale housing among a wide range of user groups.'
The fund has also acquired a complex of buildings in Hamburg known as the Herrengraben ensemble, purchased for over €40 mln. Located in the southern part of Neustadt, the property consists of 184 residential units with a total surface area of 8,900 m2.
The average size of the units is 48 m2, complementing the fund’s existing portfolio of small-scale housing for students, young professionals and senior citizens.
Benjamin Rüther, head of fund management at CRIM, added: 'With this acquisition, the fund is further expanding its portfolio of affordable rental apartments, one of the segments that the strategy will focus on throughout Europe in the coming years.
'Supply of mid-market housing in inner-city locations in Hamburg remains tight amid strong demand and this property caters to a wide range of needs among different population groups.
'Rental levels per square metre in this building are around 30% cheaper than in the surrounding neighbourhoods of Hamburg-Neustadt, St. Pauli or Hamburg Altstadt (Old Town) which makes these units attractive for many types of renters.'
The Catella Modernes Wohnen fund focuses on small-scale modern forms of living, including affordable housing for students, young professionals and senior citizens in Germany and European growth regions.
