Round Hill Capital has €1 bn of firepower to build up a new residential property platform in Germany, PropertyEU has learned. Several large portfolio acquisitions are believed to be pending on behalf of funds behind the strategy.
Round Hill has not confirmed the amount of capital it has available, or that deals are near closing. However, the pan-European investment and asset manager announced on 23 March that it had acquired 114 units in Hamburg.
This deal, the firm said, was the first step in its strategy to acquire residential portfolios in 15 metropolitan areas in Germany, ‘which exhibit strong macro fundamentals, favourable housing demand/supply dynamics and robust economic performance’. Round Hill Capital’s advisors on the transaction were Simmons & Simmons.
Vitus Group
Rather than break into a new market, the move marks the re-emergence of Round Hill as a major international player in Germany's rental housing sector. The firm was the moving force behind the €1.6 bn joint venture acquisition of the 31,000-unit Vitus Group from a Blackstone-led group of investors in 2007. Round Hill’s residential team restructured the diffuse portfolio by consolidating the management into a single in-house platform. This, according to Round Hill, led to an increase in EBITDA by over 20%, decreased vacancy by 30% and increasing rent by an average of 2.5% per year.
Round Hill eventually managed over 50,000 homes in Germany before selling them on to other investors. Vitus was sold for €1.4 bn in 2014 to Deutsche Annington, which went on to become Vonovia, the largest of Germany’s listed residential landlords.
Round Hill, meanwhile, kept its German residential team in place and is now embarking on its second investment round in the sector.
Commenting on the initial Hamburg deal, Michael Bickford (pictured), founder and CEO of Round Hill Capital, said: ‘We look forward to actively managing and repositioning the portfolio and continue to be active in the German market for other portfolios and assets with similar value characteristics.
‘We believe the German residential market benefits from strong macro/micro-economic trends and favourable supply/demand fundamentals. Taken together with our proven investment and operating expertise, we look forward to building a substantial residential platform in key cities across Germany supplementing our residential businesses in other European markets.'
European landlord
Round Hill Capital currently has 53,000 housing units under management in Europe and the firm describes itself as one of the largest private landlords in multiple countries. This follows a string of investments totalling more than €600 mln in the Netherlands between 2014-2016, and the €700 mln acquisition of refurbished former miners' apartments in Ostrava, the Czech Republic in 2015.
The aim is to re-establish a fully fledged platform in Germany, similar to, and likely larger than, existing residential businesses created around investments.
Student housing
Round Hill is also a key player in student housing, a sub-set of the wider accommodation market. The firm acquired the 2,373-bed Nido student housing portfolio in London from Blackstone for £415 mln in 2012, managed it for three years and then sold it to US residential and student housing investor Greystar for £600 mln.
In January this year a new joint venture between Round Hill and US private equity firm Starwood Capital acquired six purpose-built student accommodation assets in UK cities for about £120 mln (€139 mln). It is believed the JV intends to acquire up to £1 bn of assets in the UK.
Established in 2002, Round Hill has so far invested more than €6 bn of capital in European real estate.
