Commercial buildings are the third pillar for investments in retail properties, alongside shopping centres and retail parks. These are buildings that serve entirely or predominantly business purposes. Their secondary purposes are usually residential and/or for offices. They are typically located in city centres or district centres. Commercial buildings represent a special market segment for real estate investors. In this article, we present 3 investors who are particularly interested in commercial buildings. They are also part of our list of the 400 largest German real estate investors.
1. Stuttgarter Lebensversicherung a.G.; Stuttgart: Commercial properties in German A-cities
Stuttgarter Lebensversicherung a.G. is part of the Stuttgarter Versicherungsgruppe, a German insurance group founded in 1908. Originally limited to Württemberg, the Stuttgart-based company now offers its services throughout Germany. As part of its investments in life insurance business, Stuttgarter Lebensversicherung also invests in commercial buildings. In addition, residential properties, office properties and mixed-use properties are purchased. Commercial buildings are acquired in German A-cities, and only in 1a and 1b locations. The letting rate should be at least 50 percent for tenants with good to very good credit ratings and secure tenancies. The investment volume should be between EUR 15 and 40 million. Preference is given to purchasing existing properties that should not be older than 15 years.
2. HAMBORNER REIT AG; Duisburg: Commercial properties in good locations with long-term leases
HAMBORNER REIT is one of the few Reits in Germany. These are tax-privileged listed companies, which invest in real estate according to certain rules and distribute the majority of their profits. The investment policy is similar to property funds. The HAMBORNER REIT has a property portfolio of approximately 70 properties spread throughout Germany. Investments are made exclusively in commercial properties, specifically office properties and local supply properties, including commercial buildings. Locations with a catchment area of more than 60,000 inhabitants are sought nationwide. The investment volume should be more than 10 million euros. Preference is given to new buildings in city centre locations, district centres or highly frequented suburban locations, which are let on a long-term basis. Demographic development, purchasing power, centrality and future prospects are essential investment criteria.
3. Schroder Real Estate KVGmbH; Frankfurt/Main: Commercial buildings preferably in core and core+ quality
Schroder Real Estate can trace its history back to 1804, when the Hamburg merchant family Schröder established a branch in London. This developed into a successful commercial bank, which over time became a major investment and asset management company. Today, Schroder is one of the TOP 100 on the London Stock Exchange. Real estate investments are part of the business model. Among other things, investments are made in commercial buildings. In Germany, Schroder Real Estate seeks commercial properties in cities with a population of 100,000 or more, and also acquires mixed-use buildings. The properties should belong to the Core, Core+ and (conditionally) Value Add risk classes and be at least 60 to 70 percent leased. The investment volume ranges from EUR 15 million to EUR 500 million (portfolios).
Picture source: Kevin Dowling
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Originally posted on May 5, 2020 @ 12:18 pm