CORESTATE Capital Group is an investment manager and co-investor with approximately €25bn in assets under management. As a fully integrated real estate platform, CORESTATE offers its clients combined expertise in the areas of investment and fund management as well as real estate management services. The company operates as a respected business partner of institutional clients and wealthy private investors internationally. CORESTATE is headquartered in Luxembourg and has 42 offices including in Frankfurt, London, Madrid, Singapore and Zurich. The company employs over 900 people and is listed in the regulated market (SDAX) of the Frankfurt Stock Exchange.
Strategic corporate development
With the recent acquisitions and mergers CORESTATE has broadened its customer base and product offering. The group will strengthen ties with international institutional investors and penetrate existing clients more deeply with a broader range of services. Among institutional investors, CORESTATE concentrates not only on Germany, but also on other European countries and the Asia-Pacific region.
On the product side, CORESTATE aims to expand asset classes and markets from the current German-speaking regional focus to select regions in Europe. That means, for example, the expansion of micro-living, office and HFS Mezzanine funds in Europe and the expansion of light industrial (technology parks) in Germany.
The subsidiaries Helvetic Financial Services (HFS) and UPARTMENTS Real Estate are market leaders in the area of mezzanine financing and managing micro apartments. This market leadership will be further expanded and deepened in the future.
CORESTATE has an excellent network of brokers, which ensures early access to properties with a deal pipeline of €5.7bn. The group also aims to achieve further inorganic growth. The target company must fit in perfectly and should complement our range of services, if possible. The company must also have a value-generating and sustainable fee and earnings structure or it would not meet CORESTATE’s strict acquisition criteria.
OFFICE: The office sector has been the one with the highest transaction volume in the German commercial real estate market since 2013. High demand in the metropolitan areas, low vacancy rates and the pressure to invest have pushed prices to a plateau – where we expect them to remain over the mid-term. Framework conditions such as the strength of the German economy certainly remain auspicious for the sector.
RESIDENTIAL: We still see a strong development of the residential investment market in Germany, with rising transaction volumes and a strong product offering. Yet we believe that the prices we see in the market are at the upper end of the spectrum. Yield compression is limited to prime locations and cities. For our institutional investment products, we focus investments on sustainable, attractive micro-locations in strong A- and B-cities to safeguard an attractive risk-return profile.
RETAIL: Many investors have become extremely cautious of retail as shifting consumer preferences and demands are providing for a massive change in the sector. Not all retail schemes will survive this shift but we are confident that food-and convenience-anchored retail remains attractive. Looking at the high street, some retail schemes will be replaced by gastronomy or event-driven concepts but the underlying mixed-use asset is still a good investment.
OTHER: We are still at the beginning of the cycle in the micro-living niche asset class. A substantial supply-demand imbalance in single-person housing across Europe offers significant development and investment potential over the coming years. The demand is driven by several mega-trends, including urbanisation. We are seeing population increases in cities with strong economies that offer good job prospects and excellent universities. These locations are attracting workers willing to travel to find employment as well as the student population – and both are looking for micro-apartments.
Investment principles & strategy
As an investment manufactory, we demonstrate a high degree of entrepreneurial creativity and flexibility, which is reflected in the development of our investment products. These are always aligned with current market phases and macro-economic trends. While the company focused primarily on residential real estate in the early years, our investment focus subsequently shifted to include micro-apartments for singles, commuters and students, and ultimately retail properties. Today the group also focuses on hotels and office buildings. We will continue to readjust our focus whenever we identify economic potential in new segments.
CORESTATE is a trusted partner for institutional investors/pension funds, family offices/UHNWI and private investors. As a fully integrated investment and management platform we understand the DNA of our assets and provide investment products and corresponding services that create a lasting value for our clients. Our platform encompasses investments across the risk spectrum from core to opportunistic.
Commentaries on economy and financial markets contained in this publication are based on information believed to be reliable, although there can be no guarantee as to its accuracy. They reflect the current opinion of CORESTATE, which is subject to change based on the development of the economy and financial markets.
News from CORESTATE Capital (Real Estate)
Commitment to United Nations Principles for Responsible Investment (UNPRI) ESG criteria integrated throughout CORESTATE Capital Group ESG focus and offerings directed at all customer segments and spanning all new products
CORESTATE Capital Holding a leading European real estate investment manager, is launching its new open-ended Special-AIF “CORESTATE Residential Germany III fund” (CRG III). Following the full placement of CRG II in January 2019, CORESTATE now continues the successful series.
CORESTATE Capital has acquired an office building in Munich. The property, representing a total investment amount of approx. EUR 66 million, is to be repositioned using a “Manage-to-Core” strategy. CORESTATE will offer the property to investors as a club deal. The deal signing has already been completed, with closing scheduled for the end of March 2019.
CORESTATE acquires Kiel residential project in prime harbour location for fully placed special AIF download
CORESTATE Capital Holding S.A. (CORESTATE), a leading European real estate investment manager, has completed the acquisition of the “Bootshafen” residential project in a prime harbourside location in Kiel, Germany, for its open-ended special AIF “Corestate Residential Germany Fund II”. The total investment amount under the forward deal is approx. EUR 48 million.
Letting successes in Luxembourg for Wachstumswerte Europa III fund of CORESTATE subsidiary Hannover Leasing download
Hannover Leasing, a CORESTATE Capital Group company, has improved the secondary market performance of the “Hannover Leasing Wachstumswerte Europa III” fund in the long term. The driver of this development was, primarily, the leasing of around 11,000 m² of office space in the fund’s property in Luxembourg last year. As a result, the price of the fund’s secondary market listing has more than doubled in the last 18 months.
News from IPE Real Assets
Joint venture buys in Flensburg, Lübeck for club
Move comes 12 months after Swiss manager abandoned IPO
Private equity platform targets high street retail assets off beaten track
Real estate company cancels initial public offering
Listing on Frankfurt Stock Exchange planned 10 years after inception
White Papers / Research from CORESTATE Capital (Real Estate)
CORESTATE expands real estate portfolio for Bayerische Versorgungskammer to EUR 800 million download
Purchases of seven German high-street retail properties for approx. EUR 100 million in 2018 Managed commercial real estate portfolio grows to 97 properties Further acquisitions planned for 2019
• Aggregated revenues increase by 50% to EUR 292 million, adjusted EBITDA of EUR 184 million ( 50%), adjusted net profit of EUR 135 million ( 45%) • Assets under management increased to more than EUR 25 billion • Net debt significantly reduced over the course of the year • Forecast for 2019: Further profitable growth in the core business • Increase of the dividend proposal to EUR 2.50 per share reaffirmed
The U.S. logistics industry is a rapidly growing force in the national economy and is driving extraordinary demand for industrial warehouse property. The major supply chain drivers – consumer spending (in-store and online), trade, business inventories, and industrial production – are all at a record high.
Investors’ interest in the asset class of retail parks and retail park oriented shopping centers remains high. This is primarily due to the favorable risk/return ratio and the overall good performance of this asset class. Luxemburg-based Corestate Capital Group is currently also assessing the possibility of investing in a new retail portfolio with a total of ten retail parks. Sascha Wilhelm, CEO of Corestate, dicusses these issues.
Commercial Real Estate Financing in Germany: Survey on Real Estate Financing and Distressed Real Estate Debt - September 2014 download
This survey is a consistent continuation of the work done by the CORESTATE Research Unit for Distressed Real Estate Debt. In 2012, REMI’s discussion paper No. 4 focused on the market for distressed real estate assets and investigated the financing and investment climate in order to identify potential opportunities and threats to investors. Based on this paper, a survey about the current situation on the commercial real estate financing market is conducted annually among decision-makers ...
Analysis from IPE Real Assets
Student housing markets in continental Europe are catching up with the UK, just as Brexit uncertainty hovers over the 2019-20 academic year. Jennifer Bollen reports
Pension funds BVK and ÄVWL are pushing their property allocations beyond 20%. Barbara Ottawa reports on the challenges they face
Investors are regaining confidence in the Spanish capital which is one of the few European markets where prime office rents are rising, finds Russell Handy
Is continental Europe about to catch up with the UK in turning student housing into an institutional market? Russell Handy takes notes
Global distressed debt investors have turned their attention to Europe as banks deal with problematic property loans. Lynn Strongin Dodds reports