Optimum launches fourth German real estate fund

Boutique real estate investment firm Optimum Asset Management, has launched its fourth German real estate fund.

German Real Estate Fund IV (GREF IV) will seek to acquire a diversified portfolio of residential and commercial properties in Germany, with a focus on the Berlin market.

Targeting EUR250-EUR300 million, GREF IV will seek to add value to well-located residential and office assets near major infrastructure and employment hubs. The primary target area is Berlin, with selected investments in high-growth, supply-constrained cities such as Hamburg, Dresden, Leipzig, Cologne, and Düsseldorf.

GREF IV is Optimum’s fourth iteration in a series of strong performing German real estate funds with a focus on optimising mispriced and mismanaged residential and commercial assets. With the support of its 12-strong Berlin team, which includes nine German asset managers headed by André Gretsch, the firm has completed over EUR1 billion of real estate transactions in the region since 2006, establishing tailored asset improvement plans to enhance cash flows and create value by timely exits.

Alberto Matta, Founder of Optimum Asset Management, says: “We are truly at home in Germany. We have invested successfully here for over a decade, and the factors that attracted us at the beginning still ring true today.
“Germany continues to benefit from a resilient economy, characterised by growth in services, public sector, and the housing market, whilst maintaining global competitiveness as a leader in macroeconomic stability and innovation. The region is also home to an attractive real estate market, represented by a strong occupier base and rising investment volumes.

“Germany’s diversified market structure and the current reurbanisation of large cities create opportunities for residential investment. This, combined with the significant gap in residential supply and demand due to the growing population in major German cities, means we continue to see the significant opportunity to create value in this market. We look forward to building on our strong track record of investor returns through local, expert presence and a truly ‘hands-on’ approach to asset management.”

The firm’s track record includes Property I, the Berlin-focused real estate fund, which was fully realised in 2014, achieving an IRR of 19 per cent and a 2.3x MOIC. Optimum’s Property II (2011 vintage) and Property III (2014 vintage) are centred on Berlin and Potsdam, with additional properties in Dresden forming part of the Property III portfolio. Property II and Property III have reported a total return of 250 per cent and 149 per cent since inception, respectively. Realised assets have achieved an IRR ranging from mid-teen to 30-plus per cent.

While most institutional investors focus on assets above EUR40 million, Optimum typically targets smaller assets by focusing on properties in the range of EUR10 – 40 million. As a result, Optimum says its benefits from less competition and typically creates portfolios to be sold to yield-hungry institutions.