The capital increase for the real estate fund Swiss Life REF (LUX) German Core Real Estate SCS, SICAV-SIF has been successfully concluded. The issue transaction has raised over EUR 100 million.
The capital increase for the fund, which took place from 10 to 28 May 2021, attracted a lot of interest from investors. The issue volume amounted to a total of EUR 108.7 million. The capital raised will mainly be used to acquire new, sustainability-oriented properties in Germany. This also includes a number of new-build residential projects that are already secured by contract and are notable for their energy efficiency and earnings potential.
In order to provide investors with a portfolio structure ensuring stable income, the fund will continue to adhere to its long-term target allocation of at least 50% residential. The focus will lie on properties in metropolitan regions with established markets and sustainably positive performance indicators. Commercial properties will also be included. To this end, acquisitions are to be made in good to very good locations in German top-7 cities, as well as in flourishing “B” cities.
Advantages of the German real estate market
German real estate offers an attractive risk/return profile as the economy is broadly diversified in both regional and sector terms, with numerous real estate submarkets. Demographic change is also enhancing the appeal of the German residential investment market, which has established itself as the largest of its kind in Europe. The number of households is growing faster than the population and there is an increasing need for smaller homes. In order to meet these needs, more construction activity is needed – especially in the major cities. Among the fundamental market drivers, no significant weakening of the housing market is in sight. The German office market is also characterised by a shortage of floorspace. Strong demand for floorspace and muted construction activity have pushed vacancies to a low level in recent years.
Since 2018, Swiss Life Asset Managers has been a signatory to the Principles for Responsible Investment (PRI). Environmental, social and governance (ESG) criteria are systematically integrated into the investment and risk management processes at Swiss Life Asset Managers. In the real estate investment business, appropriate criteria are taken into account when properties are purchased as well as in construction projects and property management.