Domicil Real Estate AG buys “NOW” portfolio with 2,535 rental units from Swiss Life Asset Managers

The investment and asset manager Domicil Real Estate Group has acquired the “NOW” portfolio as part of an asset deal. This comprises 86 residential properties spread across 20 locations in seven clusters throughout Germany. The majority of the properties are located in metropolitan regions, with more than 50 per cent in state capitals. The portfolio encompasses a total of 2,535 units, of which 2,389 are residential units. The total lettable area amounts to 156,436 square metres; the vacancy rate is 6.8 per cent. The seller is a fund of Swiss Life Asset Managers.

“The purchase of the ‘NOW’ portfolio is another important step in our growth strategy and promises enormous development potential. The concentration on economic conurbations means that we can expect units to be easily lettable and a high level of demand for the condominiums. The current vacancy rate also provides an opportunity to make more rented housing available and to stabilise rental income,” explains Andre Schmöller, Chief Investment Officer of Domicil Real Estate AG.

“Despite this sale, real estate remains one of our most important asset classes. In terms of our active portfolio management, this is an important step for us to further diversify our portfolio,” says Michael Essl, Chief Investment Officer of Swiss Life Asset Managers in Germany.

“As expected, the NOW portfolio met with great interest as part of our sales process. We are pleased that Domicil, a buyer with a focus on residential properties and their sustainable management, has prevailed,” adds Jochen Worringen, Head of Transaction at Swiss Life Asset Managers in Germany.

The residential units are spread across regions around Lübeck, Berlin, Bremen, Dresden, Leipzig, Rostock, Hanover, Erfurt as well as Dortmund, Gelsenkirchen and Dusseldorf – they are thus concentrated in some of Germany's fastest-growing economic regions. The locations are primarily in the north and east of the country, as well as in North Rhine-Westphalia. The homogeneous and close-knit property structure reduces management costs.

Demand is being met

“In addition to the locations, it is above all the apartment fit-outs that are ideally suited for letting. The acquisition is very interesting for tenants as well as for retirement provisions on the part of capital investors,” says Daniel Preis, Chief Sales Officer of Domicil.

The average apartment size of 61 square metres meets the demand for two- to three-bedroom apartments. More than 85 per cent of the apartments are smaller than 80 square metres. Since 2015, around 40 per cent of the residential units have been refurbished. In addition, the former owner invested approximately 15.3 million euros in the sustainable management of the portfolio.

On the seller's side, CBRE GmbH was commissioned with the implementation of the sales process, while Stock + Partner Rechtsanwälte provided legal advice. Domicil was advised on legal aspects of the transaction by CMS Hasche Sigle, while Case Real Estate GmbH acted as technical partner for the purchase.

Domicil Real Estate AG buys “NOW” portfolio with 2,535 rental units from Swiss Life Asset Managers