Warburg Henderson, the Hamburg-based joint venture of MM Warburg Bank and Henderson Global Investors, is creating a new company, IntReal, to allow international asset managers to invest under the German open-ended investment fund structure. The new vehicle has signed new commitments of EUR 600 mln with the German asset manager R2 Immobilien, Henning Kloppelt, managing director of IntReal and Warburg Henderson, told PropertyEU in an interview during the Mipim real estate fair in Cannes last week.
Warburg Henderson, the Hamburg-based joint venture of MM Warburg Bank and Henderson Global Investors, is creating a new company, IntReal, to allow international asset managers to invest under the German open-ended investment fund structure. The new vehicle has signed new commitments of EUR 600 mln with the German asset manager R2 Immobilien, Henning Kloppelt, managing director of IntReal and Warburg Henderson, told PropertyEU in an interview during the Mipim real estate fair in Cannes last week.
Earlier this year, IntReal secured commitments of EUR 500 mln from the newly-created Europa Logistik fund managed by Hamburgische Immobilien Handlung (HIH). The company is also in final talks with a UK asset manager for a further EUR 1 bn of commitments, Kloppelt said.
Sascha Becker, fund manager at R2 Immobilien, told PropertyEU that its new HYRD fund - High Yield Residential Deutschland - will target a size of EUR 600 mln, including 50% of leverage. Under the new IntReal structure, R2 Immobilien will be the asset manager for the fund, and will be responsible for the performance of the portfolio and property management, while Warburg Henderson will offer fund management services and will be the administrator and portfolio manager.
HYRD will invest in residential properties in cities with 50,000-100,000 inhabitants in Western Germany. The vehicle is targeting an IRR of 8% and an annual dividend to investors of about 5%. It will target investments with an initial yield of at least 10% which could reach as much as 13%, Becker said.
'We expect prices for residential property to drop dramatically over the next months', he said. 'We believe that those US and UK investors which invested heavily in Germany in 2004 are all about to sell their assets,' he added. Becker forecast a number of covenant breaches and forced sales from this type of investor. R2 hopes to complete the fundraising for the fund by September, with one investor already lined up to provide a 'large share' of the EUR 300 mln equity. The fund has an open-ended structure for institutional investors with an estimated horizon of 10 years.
