Warburg-HIH Invest 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 tightknit network allow us to identify real estate opportunities and quickly implement them in the right phase of the market.
Around 150 institutional clients have entrusted their investments to Warburg-HIH Invest. Our specialists for structuring, product development, real estate management and market development all work to develop the right investment solutions for them. Warburg-HIH Invest is represented at 10 locations throughout Europe.As part of the HIH Group, our in-house capacities cover the entire real estate investment value chain.
Early identification of changes in the market, implementation of regulatory requirements and future-oriented digital management are part of our corporate philosophy. We currently manage assets with a volume of more than €9bn across 60 funds.
Warburg-HIH Invest is integrated in HIH Group with €30bn worth of AUM and with more than 750 real estate experts.
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, different country and sector focus and different risk profiles, to individual solutions for club deals or separate account 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 Warburg-HIH Invest 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, Warburg-HIH Invest sets itself apart with its consistent customer orientation, extensive property know-how, in-depth market knowledge, and its broad-based network.
Strategic corporate development
Warburg-HIH Invest designs and implements solutions that enable German and international clients to invest in real estate on any of the world’s major markets. With its roughly 15 years of experience in real estate investment management, Warburg-HIH Invest has positioned itself on the market as specialist for pan-European real estate investments, and acquired a special expertise in the area of individual fund mandates and club deals. We maintain local offices in many cities in Germany and Europe, and are continuously expanding our network. We see the combination of our extensive property know-how and network and our integrated services with local expertise and in-depth market knowledge as the key to our continued success.
OFFICE: The German market for office real estate offers many opportunities, driven by dynamic occupier demand. The main reason for the high demand from occupiers for office space is a very positive economic development with continuously rising numbers of office employees and an inflation that is slowly starting to pick up. Due to Brexit, this demand is further increased by the reallocation of some jobs from the United Kingdom to Germany. At the same time, the supply-side is replenished only by a moderate amount of new developments while conversions of obsolete office space for residential and hotel purposes keep the net-addition of new office space fairly low. Available new office space is quickly absorbed by the market and this will continue in the foreseeable future. Strong occupier demand and moderate development activity result in sinking vacancy rates. The central business districts of cities like Munich, Berlin or Stuttgart are approaching full occupancy. Office rents show a higher dynamic than retail rents and especially Berlin is registering strong increases in the prime office rents. The result is a keen demand among investors not only for core objects in the ”Big Seven” markets but also in attractive cities of smaller size. International investors are increasing their activities in Germany, looking for different profiles, often depending on the regional sources of their capital. In light of the progressive yield compression – office yields for core office buildings are at around 3.5% and for some trophy buildings at around 3% – the potential of asset management plays an ever-larger role.
RETAIL: With a stable economy that is likely to continue beyond 2018 plus its strong labour market and polycentric structure, Germany offers robust parameters for the retail sector. In addition to the ‘Big Seven’ cities, there are a number of fast-growing cities boasting high retail centrality and other features conducive to the retail sector, such as tourism, universities and a high recreational value, creating highly stable retail markets. Established, major shopping locations in cities with a high retail centrality cannot be duplicated, and thus offer long-term stability of value.
Cities and municipalities are protecting their high-street retail locations, on the one hand by means of targeted measures to make them more attractive, and on the other by consistently enforcing restrictive planning rights. The further expansion of international brands and retail concepts across Germany underlines just how attractive German city centres are for retailers. As online retail has increased its market share, omni-channel concepts have progressively gained in importance and, alongside showrooms and a growing share of food & beverage concepts, represent an increasingly important tenant base. At the same time, fashion retailers remain of great importance for high-street locations. However, their concepts are subject to massive changes and should be scrutinised and examined in detail. In addition to high-street locations, local convenience centres are an attractive addition to any portfolio. Demand for retail real estate in central German locations will continue to exceed the available supply over the next 12 months, which means that yields are expected to remain low.
INDUSTRIAL: The main drivers for the above-average growth of the logistics industry will maintain their dynamic in 2020, too. They include the internationally growing division of labour and globalisation, especially the gathering momentum of online retailing, and the manufacturers’ efforts to shorten the delivery times of their goods and spare parts. While it is reasonable to assume for the investment side that initial yields may well maintain the current level even though the yield compression is largely concluded, the leading cities in Europe are reporting that rents on the letting markets have started to perk up lately. What contributes to the situation, in addition to the keen demand for logistics facilities is the limited supply in many cities and the competition with other types of use for land located close to cities. It is further exacerbated by the highly restrictive zoning of logistics facilities in some countries, which makes a swift supply expansion virtually impossible. Combined with the persistently high yield differences between logistics assets, on one hand, and office and retail assets, on the other hand, these parameters will probably ensure that logistics space will continue to be in strong demand in 2020 and that it will further expand its contribution to the diversification of portfolios
HOTELS: As in previous years, 2020 is likely to see a continuation of the strong demand for hotel investments in Europe in general and Germany in particular even if the transaction volumes should not be expected to top prior years and although the yield compression should have bottomed out. At the same time, it is safe to assume that the demand for accommodation in the metropolises and tourism-relevant cities – generated by business travellers and trade fair visitors as well as by tourists – will remain persistently high and that room rates could keep going up. Given the high number of hotels under construction and the increase in the number of rooms in the cities, the selection of the right hotel concept and the right location to ensure an auspicious hotel investment continues to gain in significance.
The fund performance is calculated using the standard BVI-Method for regulated German Special-AIF (time-weighted performance calculation). 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 is delivered to MSCI for sector wide benchmark analysis (SFIX). As well we agree performance targets with our clients based on IRR and income returns (time and money weighted performance calculations) on fund and asset level.
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