German investment and asset manager KGAL has acquired a a residential-led development in Hamburg for its new fund KGAL Wohnen Core 3.
The Meiendorfer Höfe scheme in Hamburg was purchased from Ferox Spitzbergenweg, part of the Ferox Immobiliengruppe, for an undisclosed sum.
The neighbourhood development in Hamburg-Rahlstedt comprises a total of 16,000 m2 of rental space spread over 130 residential and various commercial units. The new building is expected to be completed by the end of 2022 and includes 216 parking spaces.
André Zücker, managing director and head of real estate of KGAL Investment Management said: 'The acquisition of the Meiendorfer Höfe project has enabled us to invest in a high-quality neighbourhood in Germany's second largest city.
'Due to the sensible mix of uses from both privately financed and subsidised rental flats as well as the complementary local necessity-based retail component, this is a highly sustainable and attractive development and we anticipate high rental demand.'
Almost one third of the development’s 130 rental flats are subsidised by IFB Hamburg. The mixed development mainly comprises 2 - 4 room flats, which are in high demand.
In addition, commercial units are being built on the ground floor areas, some of which have already been pre-let on a long-term basis to anchor tenants such as Edeka and dm Drogeriemarkt.
KGAL's due diligence rates the scheme as sustainable in terms of space efficiency, alternative potential uses, barrier-free accessibility and energy concept and efficiency.
KGAL Wohnen Core 3 invests in sustainable residential properties in Germany's key residential markets.
'The fund’s clear, research-based investment strategy, its well-defined ESG policy and the rapid implementation of the deal pipeline are all proving to be extremely appealing to our clients. Within one year, KGAL was able to secure €500 mln of equity, surpassing the fund's original target by €100 mln,' said Florian Martin, managing director with responsibility for institutional clients at KGAL Investment Management.
KGAL was legally advised by Greenberg Traurig Germany on the acquisition. Ferox Immobiliengruppe was advised by Hogan Lovells International.
