Round Hill Capital acquired, in separate transactions, two multifamily properties in Greater Berlin, Germany, for c. €100m in aggregate, from local developers. The investments have been made on behalf of Round Hill Capital’s European Residential Income Fund II (‘ERIF II’), which now owns over 3,000 units across Denmark, Germany, Ireland, Spain, the Netherlands and Finland.
Construction of both high-quality assets completed in 2024. Comprising predominantly one-bed apartments that are designed to meet the acute need for affordable housing in Greater Berlin, both have been built to the highest sustainability credentials (Label A), in locations that benefit from excellent connectivity.
The first investment is a 208-home property in the well-connected north-Berlin submarket of Hohen Neuendorf, which was acquired from KW-Development GmbH, and is already 92% let. Favourable financing terms were taken over as part of the transaction, secured on the basis of the KfW40 certification, the highest energy efficiency standard in Germany which typically attract the best financing terms.
The second investment is a 51-unit property, which is 98% occupied and located in the South Berlin submarket of Erkner. The area has experienced the fastest employment growth in Germany in the last four years, driven predominantly by the opening of a Tesla factory and the new Berlin airport.
Michael Bickford, Founder and CEO of Round Hill Capital, commented: “This was a rare opportunity to acquire two brand new, multifamily assets in Greater Berlin, at a significant discount to replacement cost, generating strong day one income and featuring the highest sustainability credentials. Market dislocation is presenting an attractive entry point for investors with capital and the conviction that values have stabilised, especially in the supply-constrained residential-for-rent sector. We are well positioned to deploy the significant dry powder we have available on our balance sheet and on behalf of our funds, leveraging our experienced on-the-ground investment teams who continue to source compelling opportunities both on and off the market. We view this transaction as a sign of things to come in the year ahead, as we start 2025 with a focus on the European rented housing market.”
ERIF II is a Core / Core Plus commingled investment fund targeting housing assets in strong micro locations that exhibit positive demographic and macroeconomic trends, persisting supply/demand imbalances and strong transport links. The fund targets income-producing, well-let, multifamily properties in European markets that exhibit strong macroeconomic growth characteristics in supply-constrained markets with an emphasis on high energy efficiency building characteristics. ERIF II is closed to new investors.
Image source - Round Hill Capital.
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