Düsseldorf is one of the top seven cities in Germany. This title is given to cities with particularly interesting real estate markets. The North Rhine-Westphalian state capital is convincing with its strong economic power and an important administrative centre and transport hub. Düsseldorf Airport is the second largest in Germany after Frankfurt. Although real estate prices in Düsseldorf do not reach the Munich level, they are characterized by a distinct price dynamic. In 2018, transactions of more than three billion euros were concluded for commercial real estate alone. This makes it clear that Düsseldorf is an attractive location for real estate investors. In this article, we present three companies that invest in the state capital and beyond.
The companies presented are part of our list of largest real estate investors in Germany.
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1. LEG Immobilien AG – Investment focus: Residential real estate
The abbreviation “LEG” stands for Landesentwicklungsgesellschaft. LEG Immobilien was initially established in 1970 as a public company. It was founded to bring together several regional non-profit housing companies in North Rhine-Westphalia. At that time, LEG was known as “Landesentwicklungsgesellschaft Nordrhein-Westfalen GmbH”. The company was privatized in 2008 and renamed “LEG NRW GmbH”. With the IPO at the beginning of 2013, it became LEG Immobilien AG.
LEG Immobilien’s shares are largely in free float. Some investment companies (MFS Investment Management, BlackRock Inc., BNP Paribas Asset Management) hold larger stakes. LEG Immobilien has a portfolio of around 130,000 rental apartments – mainly in North Rhine-Westphalia. The business model is based on generating profits by renting out residential space. LEG’s strategy consists of a combination of organic growth, value-enhancing acquisitions with high synergy potential and innovative services.
Germany’s most populous federal state remains the business’s focus. With privatization, LEG Immobilien has expanded its business activities beyond North Rhine-Westphalia. Residential real estate is also acquired in the neighbouring states of Hesse, Lower Saxony and Rhineland-Palatinate. Properties should have at least 30 residential units and portfolios should have at least 100 residential units. Mixed-use properties are also acquired and the commercial share in the rent should not exceed 20 percent. In other countries, properties with 250 or more residential units are of interest. LEG Immobilien acquires both residential portfolios and stakes in housing companies (requirement: at least 400 residential units in the portfolio). Redevelopment properties are not purchased.
2. REAQ Hess & Partner Immobilien GmbH – Investment focus: Residential and commercial real estate
The company REAQ Hess & Partner Immobilien GmbH emerged from Hess & Partner Immobilien GmbH in 2014. If its predecessor company is included, REAQ has been active on the market for almost 20 years. Although the company’s headquarters are located in Aachen, the investment focus is – in addition to the old imperial city – also on Düsseldorf. Originally a pure real estate service provider, REAQ is now mainly active as a project developer and investor. Other business areas include the classic brokerage business and property management. Here REAQ, together with partners, manages more than 3,000 residential units and 200,000 sqm of commercial space throughout Germany.
REAQ is looking for residential and commercial properties for purchase. For commercial real estate, REAQ concentrates on office buildings and logistics or light industrial properties – preferably in the Value Added risk class. In addition, REAQ acquires land that can be built on to develop residential projects. Residential and commercial real estate is purchased in all A and B cities in North Rhine-Westphalia except Düsseldorf, as well as in Saxony, Berlin and the Rhine-Neckar district. Properties are acquired in Aachen, Düsseldorf, Berlin, Essen, Cologne and Leipzig. The investment volume amounts to:
- Residential real estate: EUR 1 to 35 million;
- Logistics and light industrial real estate: EUR 2 to 25 million;
- Office real estate: EUR 2 to 20 million;
- Aachen area: all types of properties are purchased here from as little as EUR 200,000.
The purchased properties will be technically and commercially upgraded and repositioned as required. After a successful sale, the aim is to divide into condominiums with a sale or long-term portfolio management for letting purposes.
3. Indigo Invest Holding GmbH & Co. KG – Investment focus: Real estate for various uses
Indigo Invest is a Düsseldorf-based investment company founded in 2010 that focuses entirely on real estate. The managing partner is Stefan Schraut, who previously held a leading position at Pramerica Real Estate Investors Ltd. in London. This background explains why Indigo Invest is now active in both Germany and the UK. In both markets, the company acquires existing properties with different uses – with the goal of creating added value through active management and then selling the properties at a profit. Since its founding, transactions with a total value of over EUR 700 million have already been realized. Among other things, a major Uniper administration building in Düsseldorf was acquired as a joint venture with a J.P. Morgan real estate fund.
Indigo Invest is looking for properties in the Value Added and Core+ risk classes in Germany and Great Britain, preferably in London. In Germany, the focus is on prospering cities or regions. The properties purchased are primarily for office, retail, logistics, residential and commercial use.
Picture source: Liam Martens
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