Investment manager Kingstone Real Estate has announced the launch of a new open-ended institutional real estate fund that will invest in affordable housing in Germany.
The vehicle will be targeting a volume of €500 mln, with the fund’s net cash-on-cash return expected to average between 4.0 and 4.5% annually.
The plan is to invest in energy-efficient new-build housing construction. At least 60% of the investment volume is earmarked for subsidised housing. It is moreover intended to include senior-living accommodation and social infrastructure as an add-on component. The geographic focus will be on metro regions and conurbations across Germany, plus high-order centres and cities within the catchment area of metropolises.
Kingstone said that it has already received a high double-digit investment amount from a first institutional investor and hopes to raise a total of €250 mln of equity for the fund.
Hansainvest Hanseatische Investment-Gesellschaft will act as the fund’s third-party AIFM. The fund is being advised by Kingstone Residential Investments, a subsidiary set up together with Pallino Real Estate.
Tim Schomberg, managing partner and co-founder of Kingstone, commented: 'Creating affordable housing is, and will continue to be, one of the most pressing tasks of the years ahead. We are glad to be able to contribute to the effort with our newly launched fund, and to be offering a product that will potentially satisfy the ESG requirements of institutional investors as well. At the same time, such residential investments, assuming index-linked rents, offer a low vacancy risk, high value retention and income streams of long-term predictability.'
The company said that it is in the final stages of due diligence and negotiation for the initial seed portfolio for the fund. Schomberg commented: 'We are currently reviewing a variety of assets and will soon announce our first acquisitions. That said, we are open to additional offers from property developers and other sellers.'
