Berlin, Germany
Portfolio Alb
- Location
- Germany
Opportunity
Acquisition of 11 under-managed and under-rented properties comprising 293 residential units and 39 commercial units in Berlin.
Delivery
The business plan combined targeted refurbishment, rental management, operating-cost reductions and institutional property management.
Outcome
The portfolio formed part of Ailon’s 3,532-unit Berlin aggregation strategy and was included in the platform realisation in 2019.
Acquisition of an undermanaged and under-rented 11 properties portfolio of 293 multi-family residential units and 39 commercial units. The properties were built in 1900.
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 October 2015 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.