Meyer Bergman, a private equity real estate investment manager, has acquired a majority interest in a large residential portfolio with assets in Frankfurt and Greater Frankfurt.The majority of the newly acquired portfolio, which consists of 800 residential and 125 commercial units spread over 60 properties, is concentrated in the centre of Frankfurt, where Meyer Bergman is looking to unlock the value of the portfolio through active asset management. This is part of the firm’s strategy of extracting and creating value in micro-markets by identifying cities, regions and sectors that have strong market fundamentals.
The transaction marks Meyer Bergman’s first residential acquisition in Germany and first acquisition since 2002 in Frankfurt, where the firm has a well-established local presence.
Meyer Bergman has been successfully building up a portfolio of assets in Germany containing retail, office and mixed-use properties located across Frankfurt, Berlin, Potsdam and Hamburg.
Marcus Meijer, CEO of Meyer Bergman, says: “Today’s acquisition underlines the strength of our German team and highlights the benefits of strong local market knowledge to secure opportunities where we can add value and deliver strong returns for our investors and clients. Europe’s continued urbanisation, focused around a number of core city regions, will continue to drive demand for high-quality residential space, which remains supply-constrained in many markets.”
Frankfurt is one of the eight core European cities identified by Savills research to see its population increase by more than five percent between 2019 and 2023 and is expected to see household income growth of 10 to 13 percent over the same time period.
CBRE research also highlighted the severe existing mismatch between demand and supply for housing in Frankfurt and a 0.4% vacancy rate as at 2019, outlining the need for residential investment.
The city is a European financial centre, hosting the European Central Bank and other major financial institutions, and is also an emerging tech hotspot.
The interest in the 72,000 sq m (775,000 sq ft) portfolio was acquired by Meyer Bergman from a joint venture between a wholly owned subsidiary of Starwood Global Opportunity Fund XI (which is managed by the Starwood Capital Group), Stepstone Real Estate and Round Hill Capital for an undisclosed sum.
Through their strategic joint venture, Round Hill Capital, Starwood Capital Group and StepStone Real Estate acquired and assembled this residential property portfolio from private investors, responsibly investing in, enhancing and establishing a diversified, institutional-grade residential portfolio.
Meyer Bergman is currently involved in a number of high-profile mixed-use developments with a strong residential component, including:
· The Whiteley, a GBP1.5 billion mixed-use redevelopment of the iconic former shopping centre in London into a Six Senses hotel, retail and leisure space, and 153 luxury apartments
· The Corti Segrete redevelopment on Corso Buenos Aires, Milan, to create 8,000 sq. m. of retail and over 160 high quality mid-market apartments
· The Mareterra development in Monaco to create six hectares of land and develop a mixed-use scheme with approximately 120 exclusive apartments, four townhouses and 10 villas
Henning Zimmermann, Managing Director, Germany, at Meyer Bergman, says: “Frankfurt is the leading business destination in Europe and has strong potential to attract new investors and corporate occupiers post-Brexit. The city’s commercial success is a key driver of demand for quality housing in the city. This acquisition builds on our expansion into urban mixed-use schemes with a strong residential element and we will be drawing from our expertise in residential asset management to help drive value.”
Starwood Capital Group, Stepstone Real Estate and Round Hill Capital were advised by Simmons & Simmons, E&Y and PWC.
Meyer Bergman was advised by Bögner, Hensel & Partner, CBRE, PWC, Arcadis and Loyensloeff.