Union Investment has given Deutsche Asset One a German residential property mandate.
Deutsche Asset One, a Dupuis Investment & Asset Management company, will set up an open-ended fund investing in residential real estate across Germany.
The vehicle has an initial 鈧�170m to invest.
said the special investment fund was formed through a pure equity club deal with German institutional investors.
Investment will be split across A cities, B cities in metropolitan regions and selected C cities with particularly above-average spending power and anticipated population growth.
Thilo von Stechow, managing partner at Deutsche Asset One, said the vehicle had investments worth 鈥渉undreds of millions of euros鈥� in the pipeline undergoing due diligence.
鈥淭he mixture of cities and the combination of existing properties with new projects allows us to achieve a well-balanced portfolio structure with higher rent yields compared with a portfolio encompassing just new project investments or A cities,鈥� he said.
鈥淭he value of these existing properties can be enhanced through proactive portfolio management. We are marrying potential for cash dividends with long-term value creation.鈥�
Despite the rise in real estate prices across the board, the residential investment market still offers long-term opportunities, he said, with the sector meriting a 鈥減ermanent presence in the real estate portfolio of any German institutional investor鈥�.
