EXCLUSIVE Ado to invest €1b in Berlin 'within next three years'

'We already have a €700 mln pipeline,' Savion told PropertyEU. 'Our target is 30,000 residential units in Berlin by 2020, up from almost 19,000 today. We have already acquired 4,200 units since our IPO last summer.'

Ado Properties has invested €515 mln in Berlin across 12 deals since its IPO in July last year. In July 2016, it acquired 1,905 units in Berlin of which 1,877 are residential units and 28 are commercial units. The acquisitions were structured as share deals in which Ado Properties acquired around 95% of the shares in several German and Luxembourg entities, reflecting a purchase price of €218 mln. The properties are located in the districts of Schöneberg, Wilmersdorf and Neukölln.

'While we have done deals in excess of €100 mln, our niche is deal sizes of between €10 mln and €50 mln,' Savion said. 'Part of our DNA is to invest the necessary capex in the buildings and apartments we buy to maximise their rental value.'

Interestingly, Ado Properties may be one of few landlords not bemoaning the introduction of the 'Mietpreisbremse', or rental price brake, in major cities - including Berlin - in Germany last year. Under the rental price brake law, an overseeing body fixes a standard median rent, or ‘Mietspiegel’, per square metre for each city district, using figures based on a biennial state census of rents. Subsequently, no new rental contract within a given district is permitted to charge more than 10% above this amount, unless the building has undergone major renovations.

'The Mietpreisbremse doesn't apply to properties that are fully modernised or renovated, so it doesn’t have much of an impact on us,’ Savion said. ‘It's actually a good defensive mechanism that helps to regulate the market. The real challenge today is to find enough investment opportunities because there is a lot of competition, even if the face of that competition has shifted significantly over the past decade.'