Internos Real Investors is poised for further growth after selling down and integrating the GPT Halverton platform bought at end-2009 for the symbolic sum of EUR 2. 'With our new management we are looking at ways of taking the business forward,' co-founder and executive chairman Jos Short told PropertyEU in an interview.

Internos Real Investors is poised for further growth after selling down and integrating the GPT Halverton platform bought at end-2009 for the symbolic sum of EUR 2. 'With our new management we are looking at ways of taking the business forward,' co-founder and executive chairman Jos Short told PropertyEU in an interview.

The firm is pursuing three strategies: raising capital for existing funds; taking over fund management mandates and providing capital as an opportunity partner for banks or struggling companies and funds across the full spectrum of the listed and unlisted sector, Short said. 'Hopefully we will be active on one or more of these three fronts in the second half of this year. We would also like to set up an opportunity fund at some stage,' he added.

At end-June, Internos closed its Berlin office, reducing the overall payroll to 67 from 101 at the beginning of this year. The remaining teams are based in London, Amsterdam, Frankfurt and Luxembourg. Earlier last month, the firm also appointed Mark Burton, former chief investment officer for real estate at the Abu Dhabi Investment Authority, as an external member of the investment committee.

While conceding that the economic climate is still 'hard', Short said opportunities were emerging as banks start to offload some of their more problematic assets. 'It's taken them two years to work out what they've got and draw up a formal strategy. They're only now starting to offload.'

In March, BGP sold its light industrial property portfolio HBI Germany to listed UK investor Hansteen Holdings for EUR 300 mln. Under the deal, Hansteen took on the portfolio's debt, generating a EUR 3 mln fee for Internos on top of the EUR 7 mln in working capital it acquired upon the transfer of the GPT Halverton portfolio. Short claims the remaining properties, with a value of some EUR 700 mln, are of prime quality and generate 'a reasonably robust cashflow'. He puts the average leverage of the portfolio now at a maximum of 70%. The company aims to liquidate the remaining commercial properties that it manages for BGP over the next three years.

The portfolio comprises office and light industrial assets in the Netherlands and Germany, multi-let office properties outside the central business districts of Germany's five major cities, and German retail assets. As for new opportunities, Short favours Germany in particular as a 'cycle-resistant' country for core product. While Germany saw GDP fall by 5% in 2009, it is better positioned in 2010 to avoid the double dip facing the rest of Europe, he claims. 'The rest of the world is still restocking on German goods and the euro, at its lowest level for some years, has Germany exporters private rubbing their hands together with glee.' He adds that German unemployment fell to 7.5% in June, the lowest level since December 2008, prompting Commerzbank to raise its GDP forecast for Germany in 2010 to 2.5% from 1.8%.

Short also sees France benefiting from a weak euro, 'but not as convincingly as Germany. Outside the Eurozone, Norway, Sweden and Finland look to recover well but, for major investors there is not the scale of opportunity that exists in Germany.’ Short also believes self-storage is emerging as a cycle-resistant sector, particularly in Spain.

Launched in 2008 by Short and Andrew Thornton, Internos Real Investors has some EUR 1.5 bn of assets under management.