HIH Invest expands residential fund portfolio with €516m property acquisition from Vonovia

HIH Invest Real Estate GmbH (“HIH Invest”) has launched a new residential real estate fund in collaboration with Vonovia. Following the model of their first joint fund launched in September 2024, this new fund allows HIH Invest to act as the majority shareholder on behalf of a consortium of institutional investors. While HIH Invest will manage the assets and funds, Vonovia will oversee property management.

The fund’s portfolio includes ten residential and mixed-use properties acquired for approximately €516 million. Comprising around 127,000 square meters, the assets feature 97,600 square meters of residential space and 8,700 square meters for commercial use, plus 928 parking spots. With about 1,700 residential units, the portfolio primarily includes two- and three-bedroom apartments, as well as student housing and serviced apartments. The properties are strategically located across major German cities, with three in Berlin, two in Stuttgart, and others in Hamburg, Leipzig, Dresden, Munich, and Falkensee.

Felix Meyen, Managing Director at HIH Invest, commented: “We’ve secured an appealing, energy-efficient portfolio situated in Germany’s key urban hubs. These buildings are compliant with KfW-55 or KfW-55 EE sustainability standards, and the renovated properties have undergone extensive energy upgrades. Additionally, two properties are targeting DGNB Gold certification for sustainability.” Meyen highlighted the convenience of the locations, which are close to essential amenities and public transport, as a key factor in attracting tenants.

Aligned with Article 8 of the EU Sustainable Finance Disclosure Regulation, the new fund integrates sustainability into its strategy, with Vonovia providing a guaranteed leasing service for residential and commercial units. HIH Invest’s Carsten Demmler stated, “Amidst a challenging market, we’ve successfully attracted a group of seven institutional German investors. With property prices stabilizing and demand for housing exceeding supply, we see strong potential for rent growth.”

This partnership builds on their previous collaboration, where they co-launched a fund with a €630 million investment in residential developments. HIH Invest’s Alexander Eggert noted Vonovia’s reliability as a partner, saying, “Our joint efforts have yielded a high-quality investment opportunity with a robust risk-return profile, and we’re excited about our ongoing collaboration with Vonovia and our investors.”

The transaction was supported by Hogan Lovells for legal and tax advice, while Drees & Sommer conducted technical and ESG due diligence.