Joint venture formed to invest in German residential property

Pramerica Real Estate Investors has formed a new joint venture company with Hagen Kahmann and Julian Brown, the founders and principals of Kauri CAB Management GmbH, to invest in residential apartment blocks in Berlin, the company has announced.

The new Luxembourg based JV, Preco Kauri CAB S.a.r.l, has a total investment capacity of around €120 million, which will be used to acquire and refurbish residential flats in Berlin, Germany’s largest residential market.

Pramerica is the European real estate arm of the real estate investment and management business of Prudential Financial, which is headquartered in the United States.

Pramerica’s London based Merchant Banking Group structured the investment on behalf of institutional investors in its PRECO IV fund, continuing its decade long track record of investing in German residential property on behalf of investors in a variety of funds.

The JV has already committed around €24 million to the acquisition of 13 residential blocks with 325 units, comprising about 22,000 square meters. The JV aims to take advantage of the current strong rental growth in Berlin and the large numbers of under managed residential flats currently available in the city, which can be acquired at attractive prices.

The joint venture has contracted with Kauri CAB Management to manage the property to strengthen its value through capital expenditures and possible rent increases.

‘Pramerica has a strong track record of investing in German residential assets and we believe this market, if approached correctly, presents a significant opportunity to create value for our clients,’ said Philip Barrett, managing director of Pramerica.

‘Our joint venture with Kauri CAB positions us well to take advantage of attractive macro and micro market dynamics currently available in Berlin,’ he added.