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Primonial REIM building on European platform with three new funds
Pan-European asset manager beefing up German operations
It’s been a year since REFIRE’s last meeting with pan-European asset manager Primonial REIM, but we had a good opportunity to catch up at the recent Expo REAL in Munich. The company has clearly taken major steps since then in laying the groundwork for its European integration.
With headquarters in France, Primonial Group itself has a long tradition of fund investing on behalf of its traditional French investors - including in Germany and Italy - but its German operations are now playing a more significant role within the Group.
The group now has €33.5bn AUM, manages 61 funds with assets located in 11 eurozone countries, and has even opened offices in London and Singapore recently, Peter Finkbeiner, Primonial REIM's head of Germany, told REFIRE. The European portfolio has 45% offices, Healthcare and Social (34%), residential (10%), retail (7%) and hotels (4%). The German operation currently has about €5.4bn of AUM, or 16%.
Finkbeiner brings a lot of senior experience to the role of building out the German business, from board level positions at Isaria Wohnbau, TLG Immobilien, and Hudson Advisors, among others. This hasn't harmed in the least in putting together new asset management and project development expertise within his team, he smilingly conceded.
Historically associated with healthcare, senior living and social real estate in Germany, Primonial's German operations are now extending into office and residential. Finkbeiner said that while Primonial is not in the distressed assets business, the company's new technical and transactional management competence would help when buying assets needing active asset management - "Just sitting there and expecting properties to throw off yield as in past years simply won't happen any more", he said.
The German division has already been active with several transactions this year. Just before the Munich Fair, Primonial REIM closed on a sale-and-leaseback deal to buy nine healthcare properties in Brandenburg, Saxony-Anhalt and Berlin from Procurand, who will lease back the properties for the next 20 years.
In June the company bought Futura III, a seven-property, 24,000 sqm assisted living portfolio, from Senioren-Wohnen Holding. The deal was on behalf of Primovie, a retail fund managed by Primonial in France. The assets, located in Saxony and Rhineland-Palatinate, contain 294 assisted living units, 190 day-care units and 106 care units. Four of the properties exist already, while three are in development, scheduled for delivery in 2023. The properties are managed on long-term lease agreements by sole operator Advita Group, part of Domus Vi, the largest nursing home operator in Europe.
At the time, CEO Finkbeiner said: "We are convinced of the necessity of investing in this asset class in Germany, in response to the population’s need for prime health infrastructure and the real-estate issues faced by healthcare tenants with which we are keen to establish solid and long-lasting ties.”
This is the kind of deal which Finkbeiner sees as a good example of the 'platform' approach which he and group CEO Jürgen Fenk are building - the assets sourced locally on behalf of retail investors in France, and vice versa. Attracting German investors to pan-European funds is very much part of the plan, he told REFIRE.
With this in mind, Primonial is launching three new funds in the new year, focused on Germany and Europe. The first is a German office fund, pursuing a "Manage-to-Green" strategy. Existing office properties will be bought with scope to seriously improve their CO2 efficiency. A European "Urban-Living-Fund" will invest internationally, but with a strong German weighting, in all sub-classes of residential. And a European hotel fund will also invest across a range of hotel properties and categories.