AEW boosts its German residential footprint with the strategic acquisition of a 255-unit portfolio comprising seven assets in Frankfurt on behalf of a core mandate.
These high-quality properties are located in Nordend, Niederrad and Eschersheim, targeting young professionals and families, with nearby local transport providing access to the city centre via the U/S-Bahn and tram system.
The portfolio offers a mix of one- to three-bedroom apartments spread across seven properties. Six of the properties are operational with an occupancy level of nearly 100%, while one building is currently under construction and is expected to be completed in the coming months. The portfolio also includes commercial and retail units, including an attractive tenant mix of restaurants, shops, and education facilities.
The properties have been constructed to a high standard, supporting a healthy and sustainable living environment and using renewable energy sources.
Frankfurt is the fifth-largest city in Germany, with approximately 2.4 million people living in its metropolitan area and a strong economy. It is the most populous city in the Hesse region with a low vacancy rate of 0.2% in the housing market, contributing to strong demand for housing. This existing demand surplus is further fuelled by a projected population growth of about 8.7% by 2050, leading to an expected rental growth of around 3.2% per year over the next 5 years according to AEW Research.
Tobias Schnurer, Investment Director at AEW, said: “This transaction offers a strategic opportunity to acquire a high-quality portfolio in sought-after locations in Frankfurt. There is a strong demand for housing in Frankfurt, supported by the growing population, and we are confident that this high-quality portfolio will continue to attract strong interest from occupiers. This investment also sees us expand our remit for this mandate, demonstrating our ability to originate compelling opportunities for our clients. More broadly, we see strong potential in the German residential sector, and our ambition is to continue growing our activities in this area of the market.”
AEW was advised by Gleiss Lutz, TA Europe and Nova Ambiente.
Written by Leon Goldwater for Europe Real Estate.
Photo credit: © Praemia REIM Group and DELOM.
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