The acquisitions were made on behalf of the Round Hill Capital European Residential Income Fund II (‘ERIF II’ or the ‘Fund’). The Fund closed in May 2023 with c. €440 million in equity commitments and targets Core/Core Plus returns by investing in multifamily opportunities in strong locations that exhibit positive demographic trends, persisting supply/demand imbalances and strong transport links.
All seven assets are in strong well-connected locations in the Berlin suburbs, where they benefit from the German capital’s highly supportive and low supply market dynamics and economic development but are free of the most robust rent cap regulations enforced in the city centre. Two of the seven assets have an energy efficiency rating of A, while the remaining properties are all currently rated B-C. Round Hill Capital is planning a targeted capex investment programme to maintain and further upgrade these ratings as part of its commitment to building a portfolio of sustainable assets representing attractive value to investors and residents alike.
The first transaction involved the purchase of 497 residential units across five assets from TAG Immobilien AG (‘TAG’), the listed German residential investment company. The properties acquired from TAG are located in Hennigsdorf, Königs Wusterhausen, Ludwigsfelde, Stahnsdorf and Potsdam.
A further 44 units in Greater Berlin have been acquired in off market transactions from two distinct local market sellers. These comprised a further property in Königs Wusterhausen, located in close proximity to the Tesla Gigafactory at Grünheide and Berlin’s new BER airport, as well as in Strausberg, to the east of Berlin. Both new build properties will have the highest German Energy efficiency rating upon completion.
Purpose built rental housing has proven to be resilient throughout market cycles, demonstrating its defensive qualities during the current uncertain and inflationary environment and against a backdrop of rising interest rates.
Following these transactions and by utilising its European network of offices, Round Hill Capital has aggregated a high-quality residential for rent portfolio for ERIF II comprising with c. 2,600 units across Germany, Ireland, the Netherlands, Denmark and Finland.
