EXPO Real: Germany begins to see return of private equity

Private equity capital is coming back to the German market looking for opportunities, delegates heard at Real Asset Media´s Germany Investment Opportunities briefing, which took place at the International Investors´ Lounge at EXPO Real in Munich.

(L to R) Felix Meythaler, Thomas Landschreiber, Timo Hielscher and Christian Scheuerl.

¨In the last five to ten years there was no room in the market for PE money, but now they are back,” said Thomas Landschreiber, shareholder, Andere Wege Group. ¨They are poised to act, just waiting for the right opportunities.”

The economic slowdown in Germany and the lull in market activity has led to more realistic valuations.

¨We see a definite rise in opportunistic capital coming at the moment,” said Felix Meythaler, alternatives director real estate, Schroders. ¨We expect even more capital flowing into Germany in H1 next year.”

For investors with ready cash, or investors with a long-term perspective, now is the time to act.

¨Prices are at more sensible levels now, so for us it is quite a good time to buy assets,” said Timo Hielscher, managing director north, CTP. ¨We´re focusing on value-add investments with interesting yields. But in such an unsettled and uncertain market you need professionals to step in with a good network, it´s the only way to find the right opportunities.”

The logistics sector continues to attract capital, driven mainly by the nearshoring trend that ¨is having a real impact¨, Hielscher said. There’s interest from investors in all segments, from last mile logistics to simple storage spaces and from industrial to business parks.

Investors are being more cautious about residential, especially build to rent, said Christian Scheuerl, managing director, Newworld Investment Management: ¨The obstacles are strict regulations, legal constraints and rent controls.”

Residential is still seen as a defensive investment product, but capital now tends to flow to shorter-stay options like student housing, co-living and micro-living.

¨It is a better target group for investors because the average stay is six months to two years, which means that rents can be increased with every new contract, as market demand is high,” said Landschreiber.