Press Release: Deutsche Investment Launches Its Second Office Real Estate Fund

Press Release: Deutsche Investment Launches Its Second Office Real Estate Fund

Hamburg, 4 August 2021 – Deutsche Investment just set up “Deutsche Investment – Büro II,” its second office real estate fund for institutional investors. The corresponding license by the German Supervisory Authority for Financial Services (BaFin) has already been issued. The investments of the new real estate special AIF will focus exclusively on cities in Germany, the plan being to invest about one half of the capital in Class A cities (the “Big Seven”) and the other half in metro regions and selected fast-growth cities. The target investment volume amounts to a total of EUR 300 million, which is supposed to be achieved within an investment period of around 24 months.
The process of building up the portfolio of office properties held by the fund seeks to ensure that its rent revenues will be generated to at least 70% from office units. The objective is a broadly diversified portfolio with asset lot sizes between EUR 5 and 50 million and qualities that include a high alternative use potential and predominantly multi-tenant structures. In addition, at least 70% of the real estate to be acquired should belong in either of the two risk classes Core and Core+, whereas properties of the Value-Add category should account for no more than 30%.
The minimum subscription amount is EUR 10 million. The fund will target an overall term of ten to twelve years, a net cash-on-cash return of about 4.0 % to 4.5 % p.a., and a projected total return target (IRR) of no less than 4.5 % when taking debt into account. The entire fund, asset, transactions, property and facility management will be provided by Deutsche Investment, true to the principle of full vertical integration.

Within the framework of its stocking strategy, the company owner of Deutsche Investment himself will invest in the “Deutsche Investment – Büro II” fund and, in conjunction with this commitment, provide the seed portfolio for the fund. “The first strategy-compliant assets in our deal pipeline are now undergoing their pre-acquisition audits,” explained Klaudia Spychala, Transaction Manager at Deutsche Investment KVG.

“The positive feedback we have been getting from our investors and the successful performance of our first office real estate fund were key to our decision to set up another product for the office real estate asset class for institutional investors,” said Enver Büyükarslan, the main shareholder of Deutsche Investment KVG. “We launched our fund ‘Deutsche Investment – Büro I’ in September of 2018. In the time since, it achieved an overall performance of 52.3% or an annual rate of return of 16.7%.” The fund IRR since the launch date has grown to 17.7% to date. This goes to show that carefully selected and well-managed office properties can significantly contribute to the returns of an institutional investor portfolio – and do so despite a moderate risk profile. Our end-to-end management approach enables us to manage such an investment across the entire value chain—from the concept design all the way to the exit—in ways that ensure we deliver a performance as attractive and stable as possible to our investors.”

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Press Release: Deutsche Investment Launches Its Second Office Real Estate Fund

Press Release: Deutsche Investment Launches Its Second Office Real Estate Fund

Hamburg, 4 August 2021 – Deutsche Investment just set up “Deutsche Investment – Büro II,” its second office real estate fund for institutional investors. The corresponding license by the German Supervisory Authority for Financial Services (BaFin) has already been issued. The investments of the new real estate special AIF will focus exclusively on cities in Germany, the plan being to invest about one half of the capital in Class A cities (the “Big Seven”) and the other half in metro regions and selected fast-growth cities. The target investment volume amounts to a total of EUR 300 million, which is supposed to be achieved within an investment period of around 24 months.
The process of building up the portfolio of office properties held by the fund seeks to ensure that its rent revenues will be generated to at least 70% from office units. The objective is a broadly diversified portfolio with asset lot sizes between EUR 5 and 50 million and qualities that include a high alternative use potential and predominantly multi-tenant structures. In addition, at least 70% of the real estate to be acquired should belong in either of the two risk classes Core and Core+, whereas properties of the Value-Add category should account for no more than 30%.
The minimum subscription amount is EUR 10 million. The fund will target an overall term of ten to twelve years, a net cash-on-cash return of about 4.0 % to 4.5 % p.a., and a projected total return target (IRR) of no less than 4.5 % when taking debt into account. The entire fund, asset, transactions, property and facility management will be provided by Deutsche Investment, true to the principle of full vertical integration.

Within the framework of its stocking strategy, the company owner of Deutsche Investment himself will invest in the “Deutsche Investment – Büro II” fund and, in conjunction with this commitment, provide the seed portfolio for the fund. “The first strategy-compliant assets in our deal pipeline are now undergoing their pre-acquisition audits,” explained Klaudia Spychala, Transaction Manager at Deutsche Investment KVG.

“The positive feedback we have been getting from our investors and the successful performance of our first office real estate fund were key to our decision to set up another product for the office real estate asset class for institutional investors,” said Enver Büyükarslan, the main shareholder of Deutsche Investment KVG. “We launched our fund ‘Deutsche Investment – Büro I’ in September of 2018. In the time since, it achieved an overall performance of 52.3% or an annual rate of return of 16.7%.” The fund IRR since the launch date has grown to 17.7% to date. This goes to show that carefully selected and well-managed office properties can significantly contribute to the returns of an institutional investor portfolio – and do so despite a moderate risk profile. Our end-to-end management approach enables us to manage such an investment across the entire value chain—from the concept design all the way to the exit—in ways that ensure we deliver a performance as attractive and stable as possible to our investors.”

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