Civitas Investment Management has significantly progressed its continental European expansion strategy with the €300 mln acquisition of 26 elderly care and assisted living homes predominantly located in Berlin and Hamburg, Germany from Deutsche Wohnen, a subsidiary of Vonovia, the largest listed residential landlord in Europe.
Civitas has made the investment, on behalf of the Civitas European Social Infrastructure Fund.
Simultaneously, Civitas is entering into long-term lease agreements for the 3,000+ bed portfolio with Alloheim Group which will acquire the incumbent operator, Katharinenhof and will continue to deliver high-quality care and support for the residents. Alloheim is Germany’s number one care operator with 265 care and assisted living homes and has a strong positive reputation across the elderly care market.
Civitas European Social Infrastructure Fund was established in 2022 and invests in high-quality support and care-based community housing, education and healthcare facilities across a selection of major Western European markets. Civitas seeks investments with income underpinned by insurances, governments or local municipalities.
The portfolio will meet Civitas’ ESG investment criteria of delivering positive social impact in local communities and improved environmental considerations through an extensive capital expenditure programme which aims to see more half of the portfolio achieve an EPC rating A. In addition, Civitas and Alloheim have agreed green lease obligations which aim to minimise carbon emissions from the operation and occupation of the properties.
The acquisition is Civitas’ second investment in Europe, building on the €50 mln acquisition of a Swedish social supported housing operator and underlying assets in 2022. The latest investment takes Civitas’ total European capital commitment to over €450 mln and the company is actively seeking to expand across major Western European markets in social infrastructure assets targeting €1 bn to be deployed short term.
Nikolay Velev, head of Europe, Civitas Investment Management commented: 'This investment is particularly important for Civitas, marking our entry into the German market and significantly expanding our European presence, where in the short to medium term we are seeking to deploy up to €1 bn into investments in high-quality assets and locations with strong operators.'
He added: 'The European later living market is no longer a nascent sector but is an established and fast-growing segment. It represents a highly attractive risk-return proposition with inherent downside protection to our investors through its positive supply/demand imbalance, legislative and obligatory funding, and strict regulatory oversight to ensure quality of care provision. We are delighted to be partnering with Alloheim, a highly regarded care operator which shares our ethos of delivering exemplar customer service.'
Civitas was advised by TSC Real Estate, Greenberg Traurig, PwC, Drees & Sommer and Savills. Cushman & Wakefield advised Deutsche Wohnen.
