With almost 600,000 inhabitants, Leipzig is the second largest city in the new federal states after Berlin. About 1.1 million people live in the Halle-Leipzig conurbation and every sixth euro in Saxony is generated in Leipzig. The old commercial metropolis has an international reputation as a trade fair and book city. Leipzig has not yet reached the level of Munich, Hamburg or Berlin in terms of real estate prices. However, as in nearby Halle, prices have risen particularly dynamically recently. The Postbank Residential Atlas 2019 concludes that the chances for further increases in the value of real estate in the trade fair city up to 2030 are very good. Investments are therefore worthwhile. Some real estate investors who are actively buying in Leipzig and beyond have also recognized this.
The companies presented are part of our list of largest real estate investors in Germany.
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1. SWA Immobilien GmbH – Investment focus: Residential and mixed-use properties
SWA Immobilien is an owner-managed Leipzig-based real estate service provider and part of the Zangemeister group of companies. The companies were founded in the 1990s after the reunification of Germany and the former GDR. SWA Immobilien covers practically the entire range of real estate services. The services range from classic brokerage, property management and facility management to project development. In connection with real estate projects, properties and land in the Leipzig area are purchased. SWA Immobilien strives to increase value within the framework of targeted project development and marketing. Other companies in the Zangemeister Group are also involved in projects – for example, Zangemeister Ingenieurbüro für Bauplanung, Statik und Baubetreuung or Mauermeisterhaus Bau- und Immobilien GmbH when construction services are awarded.
They consciously see themselves as a company in Leipzig and for Leipzig. That is why purchasing activities focus exclusively on fair trade within the city and its surrounding area. They are looking for properties in locations that offer good opportunities for permanent and profitable letting. It does not matter whether the buildings are refurbished, unrefurbished or listed buildings. Preference is given to investments in apartment buildings, housing estates, residential and commercial buildings. Houses are acquired from six residential units and 500 sqm of floor space. Mixed-use properties are also purchased, whereby the commercial share should be less than a quarter. Undeveloped plots are also welcome for new construction projects.
2. Norkon GmbH – Investment focus: Office and logistics properties
The Leipzig-based Norkon GmbH is an investment and asset management company that focuses on structured investments in commercial real estate. Norkon invests throughout Germany and the focus is on office and logistics real estate. Both individual properties and property portfolios are purchased. The company covers the entire investment process. It includes identification, examination and purchase of suitable properties or portfolios, transaction management, financing models, control of letting management and conception and implementation of exit strategies. One of the latest Norkon acquisitions is ModeCentrum Hamburg (MCH), which was purchased in mid-2019, a deal worth more than 110 million euros. In 2018, Norkon managed a real estate portfolio of around 140 million euros.
The acquisition profile of Norkon distinguishes between commercial properties like offices and land with construction reserves:
- Office properties: The investment volume ranges from EUR 10 million to EUR 80 million. They are interested in properties in the risk classes Core+ (A-cities), Value Added (A-, B-cities) and Opportunistic (A-, B-, C-cities). A- or B-locations are sought. For Core+ properties, the letting rate should be at least 90 percent. In the other risk classes, larger to complete vacancies are also accepted.
- so. Real estate/land with building reserves: Here, the desired acquisition volume is between EUR 5 million and EUR 100 million. Investments are made in A, B and C cities (from 250,000 inhabitants). The properties should be located in A or B locations.
3. Neutecta Grundinvest AG – Investment focus: Residential real estate
Neutecta Grundinvest is a Leipzig-based company founded in 1993, which is primarily focused on investments in residential real estate in the new German states as well as project developments in Berlin. In addition, it invests on a smaller scale in gas stations and retail properties (local suppliers) and holds various company participations. In addition to the company headquarters in Leipzig, Neutecta has a branch office in the German capital. The business is operated from both locations. In recent years, Neutecta Grundinvest has acquired properties with more than 10,000 residential units and a total area of 550,000 sqm. One focus is on prefabricated housing. The investment objective is to achieve an attractive rental return by letting the properties as fully as possible – if necessary, after extensive modernization and renovation.
Neutecta Grundinvest has specialized in residential letting in the low-price segment. Preference is given to acquiring residential complexes that currently have high vacancy rates but still have an intact infrastructure in the surrounding area, such as shopping and public transport facilities. Doctors, pharmacies, schools and leisure facilities should also be available “on site”. This is often the case in prefabricated housing estates. They seek housing estates with 100 or more residential units in the new federal states. The state of refurbishment and vacancies are of secondary importance. In Berlin, Neutecta Grundinvest exclusively buys land for project developments. These must be suitable for multi-storey residential construction. The project conception is carried out by Neutecta Grundinvest, the structural implementation by property developers.
Picture source: Paul Kapischka
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Originally posted on May 1, 2020 @ 3:30 pm