Berlin-based residential investment company, Skjerven Group, plans to double its investment in the city this year, CEO Einar Skjerven has told PropertyEU.
‘I’d like to invest more than €100 mln in Berlin this year, up from €40 mln last year. I’m confident we can do that because the deal flow is significant,’ he said.
Such is the deal flow that Skjerven receives between 20 and 30 offers a week, he said. ‘It’s amazing, we’re like stock pickers,’ he said. ‘In a city where 85% of the population still rents, there are a lot of opportunities.’
Skjerven, who hails from Norway, has been active in the Berlin market for the past 10 years and said that the factors that drew him to the city then are just as relevant today. ‘It’s still much cheaper to buy existing buildings than to buy new ones and prices in Berlin are still lower than in many other major European cities. Around 40,000 people move to Berlin each year and residential vacancy rates are very low.’
Average residential rents in Berlin have risen by 20% to €9 per m2 a month since 2012, according to CBRE. In the same period, rents in the popular district of Charlottenburg-Wilmersdorf rose by 14% to €10.21 per m2 a month, the advisor said.
The Skjerven Group announced on 27 January that it had launched a new investment programme for institutional investors with a target investment volume of €150 mln. International private equity capital has invested in the programme, Skjerven said, declining to provide further details.
The group is focusing purely on the Berlin market because it is still eminently affordable compared to many other European markets.
‘We both rent out and sell the apartments that we’ve refurbished or repositioned,’ Skjerven said. ‘We have a value-add and a core-plus investment strategy, which means we might acquire an office and turn it into apartments, provide a capex injection and then reposition it. However, the location is very important, so we only invest in A and B locations such as Charlottenburg and Mitte. We prefer deals in excess of €5 mln. We don’t have an upper limit, although it would be unusual to go above €30 mln on one deal.’
As part of the new investment programme, Skjerven Group has already acquired a property at Leibnizstraße 77 - 78 (pictured) for €11.3 mln, or around €3,500 per m2. The multi-family dwelling comprises 37 residential property units with a rental area of 2,828 m2 as well as a commercial unit with 383 m2 on the ground floor and parking for 19 vehicles. The vendor was an unnamed Danish family office. Residential values in the city have shot up on average by 46% since 2012 to €3,289 per m2, according to CBRE.
Skjerven Group owns around 1,800 apartments in Berlin. It held €220 mln of AUM as of end-December 2016.
