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 lifecycle of a given property from 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: Industries are burdened by energy costs and rising capital costs. The sector faces challenges due to a globally weakened economy and reduced demand. However, import and producer prices are stabilising. Freight rates are nearly back to pre-COVID-19 levels and supply chains have normalised. Megatrends continue to drive demand for space, be it large-scale or specialised systems. Although the limits of maximum rental cost burden on companies are approaching, the sector does see speculative construction projects as the purchase price adjustment period of this asset class has advanced the most compared to the others.
OFFICE: There is an increasing variation in rental price levels, vacancy rates, and incentive packages depending on submarkets and building quality, to which to add additional differentiation based on location, property quality, ESG factors, and tenant quality. Modern spaces in new buildings in Central Business District locations remain in demand. Bid-ask spreads are narrowing slowly but continuously, as selective property offerings are gradually increasing price transparency. Respectively, this allows for further transactions at adjusted yield levels – something we see throughout all sectors.
RESIDENTIAL: The significant increase in construction costs, driven by both high material costs and rising labour costs, leads to a diminishing dynamic in development. For the housing market, this means that approval and completion numbers will continue to decline, and rents in growth regions will continue to rise. Additional uncertainties due to regulation and reduced, though thoroughly needed, subsidy programmes factor in and intensify the demand for housing in metropolitan areas. In turn, investments in residential real estate provide relative independence from economic cycles.
RETAIL: Inflation remains high, but we expect a further downward trend. Still, food retailers and drugstores ensure comparatively stable prospects for local retail parks and convenience centres. Shopping centres and the high street are recovering from the effects of the lockdowns. However, volatile energy costs and general uncertainty are weighing on the sector, so it is under scrutiny. Differentiation is key, so location, concept, and stocking must be closely examined individually and carefully.
INFRASTRUCTURE: Wind and solar power play a key role in Europe’s energy transition. The accurate predictability of electricity generation from a freely available resource, favourable production costs, rapid technological progress, and attractive market prices for electricity open up the possibility of green, high-return investments.
HEALTHCARE: Driven by the megatrend of demographic change, demand for healthcare assets will continue to increase as society continues to age. They help stabilise a portfolio as their performance is hardly subject to market fluctuations. The asset class offers predictable and stable cash flows for private and institutional investors alike.
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 bespoke 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 regulated 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 benchmark 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.
