Garbe Institutional Capital has launched a pan-European residential real estate fund with a total target investment volume (GAV) of around €800 million. The Garbe European Residential Fund (Garbe EUResi) invests in real estate developments and selectively also in properties undergoing energy rehabilitation. The investment strategy follows a "boots on the ground" approach: the fund only invests in locations where Garbe can act as a local investor through a local presence. The fund’s launch is a milestone in Garbe Institutional Capital’s move to expand into a European residential real estate platform. Garbe EUResi has already received equity commitments of €82.5 million.
The investment focus of the German open-ended alternative investment fund (AIF) is on A- and B-cities in Germany, the Netherlands, France, Great Britain as well as on the metropolises of Prague and Warsaw. The target equity volume of the core fund is between €400 million and €500 million and the maximum debt-ratio (LTV) is 50 percent. IntReal International Real Estate Kapitalverwaltungsgesellschaft acts as capital management company (KVG) for Garbe EUResi.
Thomas Kallenbrunnen, Managing Director of Garbe Institutional Capital, says: "With our new flagship fund EUResi we are transferring Garbe's holistic business model to residential real estate. Our vertical integration of development, investment, portfolio and real estate management services, enables us to achieve broad market coverage and extensive value creation. We manage risks through broad diversification while leveraging opportunities through investments in markets with significant value potential, especially compared to Germany."
Ben Maudling, Managing Director and Head of CEE at Garbe Institutional Capital, says: “Prague and Warsaw are important locations within our European investment strategy. These cities have economic growth significantly higher than the EU average and both have a considerable undersupply of residential accommodation, in particular in the professionally managed build to rent (BTR) sector. In combining mature and dynamic markets we aim to create attractive risk-adjusted returns.”
Andreas Höfner, Head of Strategy at Garbe Institutional Capital, says: "Compared to equities or bonds, European residential markets show stable returns. The fund focuses on markets with long-term positive income and rental development to achieve growth in cash flows and distribution yields. For asset allocation, we rely on our in-house research and a local presence in the target markets."
