The Hamburg-based company HIH Real Estate wound up its HIH Development Fund having delivered a strong return on investment. A return on equity of 13% p.a. before taxes was generated on the fund level. This exceeded the total return forecast (IRR) of 10-12% p.a. before taxes on the investor level.
The total investment volume that HIH Development Fund committed in its projects came to approximately €74m. The fund invested in the development of two high-spec residential projects in Munich. The final sale, involving a business unit, was completed in November 2015.
HIH Real Estate had launched the HIH Development Fund in 2011. The construction projects realised included a residential building at Haydnstrasse 4, 6 and 8 in the Ludwigsvorstadt sub-district and the Monaco residential/commercial building at Feilitzschstrasse 7-9 in the Schwabing district. The combined floor area of the two assets adds up to roughly 13,000m2, and breaks down into 94 flats, 108 parking spots, and several retail units. The buildings were completed in 2015 (Haydnstrasse) and 2014 (Feilitzschstrasse), respectively.
“The investment fund has been highly successful for our investors. We were able to sell the property at the best possible time in the market cycle. This translates into an extremely attractive rate of return for the fund investors today,” said Markus Meinecke, head of business development at HIH.
“Particularly the development on Feilitzschstrasse brought us face to face with certain challenges, such as complex planning approval parameters or the necessary in-situ detonation of an unexploded aerial bomb from World War II by ordnance clearance experts. We are therefore all the more pleased to deliver such attractive returns to our investors now,” added Jens Nietner, member of the senior management and heading the Property Development division of the HIH Real Estate Group.
