Germany’s Instone Real Estate Group (Instone Group) has returned to property acquisition after a two-year hiatus, highlighting its confidence in the housing market despite current challenges.
Instone Group secured plots in Frankfurt and Düsseldorf for the development of approximately 570 new affordable homes that cater to specific needs.
The first site is located on Lahnstrasse in Frankfurt-Gallus, spanning 3,664 m2. This development will create approximately 170 residential units with a projected sales volume of €70 mln.
The second property, situated in Düsseldorf's eastern area, is considerably larger at 16,000 m2. This project plans to construct 400 apartments with a target value of €180 mln. The government will subsidize around 40% of these units, making them more accessible for residents.
CEO Kruno Crepulja, commented: ‘We are currently observing a slight increase in demand. At the same time, the current market situation is providing us with attractive opportunities for property acquisitions. Thanks to our financial strength, we can become active at any time and capitalize on attractive opportunities. Growth is once again at the top of the agenda. This year, for example, we are planning to acquire properties with a target sales value of €400 mln following development.’
The company is optimistic about 2024, boosted by a significant increase in sales revenue. Compared to Q1 2023, Instone Group saw a rise of over 50% in sales revenue during the first three months of this year, with 40% of its apartments sold to institutional investors.
Instone Group anticipates demand for housing to continue to increase in the coming years due to net immigration and declining construction activity. Through their subsidiary nyoo, they are committed to keeping homes accessible for most people. By using standardized digital planning and serial construction methods, nyoo builds homes more cost-effectively than competitors. This efficient approach will be applied to the entire development on the Düsseldorf site.
Looking ahead, Instone Group has an ambitious goal: by 2030, at least half of their new residential units will be either government-subsidized or subject to price controls.
Crepulja added: ‘We are well aware of our social and ecological responsibility. We can already confirm that 90% of project sales are taxonomy-compliant. 152 of the 167 relevant projects have achieved taxonomy conformity. We are on course to becoming an ESG pioneer among residential project developers – and we are already well on the way to achieving this.’
