Corporate overview
HIH Invest Real Estate is one of the leading investment managers for real estate in Germany and Europe. We adopt a future-oriented approach to finding, developing and managing properties in the interests of our clients. Decades of experience, proximity to the real estate markets and a tight-knit network allow us to identify real estate opportunities and quickly implement them in the right phase of the market. Around 260 institutional clients have entrusted their investments to HIH Invest Real Estate. Our specialists for structuring, product development, real estate management and market development all work to develop the right investment solutions for them.
Investment principles & strategy
We offer a broad spectrum of investment solutions. These range from risk-diversified real estate fund solutions pursuant to the German Investment Act – with a defined investment strategy, a varying country and sector focus and different risk profiles – to individual solutions for club deals or separate accounts depending on the respective risk/ return profile of our investors. This gives institutional investors a chance to benefit from our profound real estate expertise and high degree of vertical integration, either by investing in intensely managed real estate products, with us effectively covering the life cycle of a given property end to end, or by taking advantage of selected components within the framework of individual mandates. Regardless of the solution chosen, HIH Invest Real Estate sets itself apart with its consistent customer orientation, extensive property know-how, in-depth market knowledge and broad-based network.
Sector forecasts
INDUSTRIAL: The COVID -19 pandemic and current geopolitical uncertain- ties highlight the fragility of global supply chains. The increased requirements for supply chain resilience to ensure production capability is providing signifi- cant impetus to the logistics industry and driving demand for space. In addition, industrial companies and government institutions will require large-scale ware- house logistics and specialised logistics to store system and security-relevant goods. Demand is thus likely to remain high across the board and exceed the sup- ply of modern and sought-after space. In addition, the expansion of e-commerce and the need for efficient last-mile concepts are increasing demand for logistics close to city centres.
OFFICE: Quality has become the decisive factor in the selection of office properties. Aspects such as urbanity, accessibility, micro-location, building structure and quality of stay are becoming increasingly important. There will be greater differentiation between properties – both in the investment and rental markets. Overall, demand and prime rents for core properties are likely to remain high, while properties with location and quality deficiencies will face increased challenges. Furthermore, ESG, the continued growth in the number of office employees and the requirements for modern office landscapes will necessitate new office developments in the coming years.
RESIDENTIAL: In the metropolitan areas in particular, but also in many regional centres, there is an unchanged surplus demand and virtually no vacancies. Due to the increased time spent in the home office, the quality of living and the living space are also gaining in importance. Peripheral loca- tions are also benefiting from these new working models. High energy prices are putting the spotlight on new buildings with better energy efficiency and lower ancillary costs. However, due to the increased financing costs, project developments are being postponed in many cases, so that the existing demand surplus will persist in the future. Investments in residential real estate thus continue to represent a stabiliser in the portfolio, also due to their relative independence from economic cycles.
RETAIL: High inflation rates currently being observed are reducing the popu-lation’s propensity to consume, which is putting pressure on the retail sector. However, the barely substitutable goods of food retailers and drugstores ensure comparatively stable prospects for local retail parks and convenience centres, especially when anchored by a supermarket or discounter. Shopping centres and the high street, by contrast, face a situation of increasing uncer- tainty. Purchasing restraint, competing with e-commerce and rising energy costs are weighing on the sector, which still has to deal with the effects of the lockdowns. Further differentiation by location, concept and stocking is to be expected here and properties should be scrutinised and examined in detail.
INFRASTRUCTURE: The future-proof segment of renewable energies optimally combines economic and ecological goals. The good predictability of electricity generation from freely available energy sources, favourable production costs, and attractive market prices for electricity open up the possibilities of green, high-yield investments. Europe is in the midst of the energy transition. Fossil fuels will be gradually reduced in view of the climate targets set and the planned reduction of high supply dependencies. Wind and solar energy play a key role in closing the unavoidable supply gap. The price of electricity is likely to stay at a high level, while the cost of generating electricity from renewables should remain manageable. Large-scale PV and wind projects will be in high demand for the near future.
HEALTHCARE: The demand for assisted living and care properties is hardly subject to short-term market and economic fluctuations. It depends above all on demographic trends, which can be easily forecasted. This trend shows a significant ageing of society implying continuous growing demand for these assets. The high demand, the predictability and the earnings prospects con- tinue to make assisted living and healthcare properties popular with investors – both private and institutional.
DEBT: Stricter banking regulation through Basel-III and an expected reluc- tance of banks in the real estate financing sector are creating a financing gap. Real estate debt has steadily gained importance in institutional portfolios in recent years and there is great growth potential. They are attractive for various reasons. As a fixed income product, real estate debt, for instance, does not fall under the regulatory real estate quota and is therefore interesting for investors who have already exhausted it. It also avoids the problems of devaluation and depreciation that many asset classes currently face.
Strategic corporate development
HIH Invest Real Estate designs and implements structured real estate investment solutions in accordance with the German Capital Investment Act (KAGB) so as to give institutional investors the opportunity to invest in European real estate markets. Our products are bespoken to investor needs, and complemented by a flexible and customisable service spectrum. We maintain local offices in many cities in Germany and other parts of Europe and are continuously expanding our network. We see the combination of our extensive property know-how, network, services, local expertise, and in-depth market knowledge as the key to our continued success.
Performance verification
The fund performance is calculated using the standard BVI method for regu- lated German special AIFs. The BVI method employs investment fund prices and therefore takes account of all fixed costs inherent to the fund. The BVI performance results of our funds are delivered to MSCI for sector-wide bench-mark analysis (SFIX). In addition, we agree performance targets with our clients based on IRR and income returns at fund and asset level.
COMPLIANCE STATEMENT
This document may not be reproduced or distributed without the express consent of HIH Invest Real Estate. In case of violation, we assume no liability whatever for possible damages incurred. The contents were carefully prepared by HIH Invest Real Estate in full confidence that the data provided to us by third parties is correct; however, we cannot assume any guarantee for the accuracy, completeness or currency of this information.
