Heitman acquires German rental portfolio

As reported by GlobeSt.com:

Heitman LLC, a global investment management firm, has completed the first close of Heitman European Residential Investment Partners, a closed end, co-mingled fund with the strategy of aggregating and managing a portfolio of for-rent residential properties in Western Europe.

In a related transaction, Heitman’s European Residential Investment Partners fund has closed on a seed investment comprising 1,595 German private for-rent residential units, containing 108,578 square meters from Grainger PLC, the UK’s largest listed specialist residential landlord. The portfolio is spread over 110 buildings located in Western Germany mostly across the high barrier to entry metro areas of  Frankfurt and Mannheim. The institutional grade portfolio formed the majority of Grainger’s residual assets in Germany.

As part of the acquisition of the seed investment, Heitman will onboard Grainger’s Frankfurt-based investment specialist team. The seed assets will continue to benefit from the Frankfurt team’s portfolio management expertise but will also draw from Heitman’s European and global resources, experience and fiduciary skills in residential asset management. Heitman will continue to manage Grainger’s final remaining German assets in an institutional environment pending disposition.

“Today’s announced seed investment and the launch of Heitman European Residential Investment Partners along with onboarding of a highly talented residential specialist team is indicative of Heitman’s conviction in the merits of this strategy,” commented Gordon Black, senior managing director for Heitman. “We are very excited by our newest acquisitions which represent a win-win for both Heitman and Grainger and our respective European investments.”

Targeting approximately $281million (€250M) in equity commitments, Heitman European Residential Investment Partners will focus on assembling a portfolio of small- to medium-sized, rented residential properties and larger single assets across Western Europe for core/core+ investors. Heitman, which has globally deployed approximately $11.13 billion (€9.9B) into rented residential assets on behalf of its investors, expects the fund will pursue further investments across Germany with appealing demographics and economic growth potential, including select German cities such as Dresden and Leipzig. Pursuing a strategy focused on maximizing returns through income growth, active asset management and value creation strategies, Heitman European Residential Investment Partners will also take advantage of the firm’s strong pipeline and deep relationships in Holland and in Amsterdam in particular to assemble the portfolio. Heitman is now believed to be one of the largest private residential landlords in Amsterdam.

Founded in 1966, Heitman is a global real estate investment management firm with more than $35 billion (€31B) in assets. Heitman invests in commercial real estate directly or in publicly traded real estate securities. The firm’s clients include institutions, pension plans, endowments and foundations, and individual investors. European private equity investments span 15 countries with $4.27 billion (€3.8B) currently under management. A leading investor in the region, Heitman has over 50 employees across Europe.