Berlin, Germany
Portfolio Ze
- Location
- Germany
Opportunity
Acquisition of an under-managed and under-rented portfolio comprising 1,674 multi-family residential units and 94 commercial units.
Delivery
The assets formed part of Ailon’s wider Berlin residential aggregation strategy, combining refurbishment, rental management, operating-cost control and institutional property management.
Outcome
The sub-portfolio contributed to a 3,532-unit platform assembled across the greater Berlin region and subsequently realised through an institutional portfolio transaction.
Acquisition of an undermanaged and under-rented portfolio of 1,674 multi-family residential units and 94 commercial units. The portfolio was rendered as non-core by the seller, and insufficient resources were allocated to capture the properties full potential.
Rent was improved through targeted refurbishment investments, systematic rent improvements, operating cost reductions, institutional standard property management implementation and other asset management strategies.
Berlin’s housing market was at the time characterised by 85% rental apartments. Prices for multi-family apartment buildings in prime locations were 30-50% below replacement cost. Average rent level as percentage of household income was 20-25%, well-below other major German cities, suppressing supply. On the other hand, demand was stimulated by continued steep increase in population, jobs and number of households.
The portfolio was acquired in December 2014 in a joint venture with an international Sovereign Wealth Fund. The joint venture originated, aggregated, repositioned, refurbished and managed 3,532 rental apartments across 158 properties in the greater Berlin area and nearby cities. More than 1,000 units were located in Berlin’s central district Mitte. The portfolio was sold in 2019.