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Fund in Focus

Domus-Deutschland-Fonds Nr. 2
Continuity and growth opportunities

Real estate remains an attractive investment opportunity in the current market environment. Take advantage of the expertise of Deka’s real estate experts and its multi-award-winning management team.

Market situation

 

Germany enjoys a competitive position on the international stage.

The stable economy is fuelling sustained development on the real estate market.

Germany ranks among those EMU economies with a solid structural position. The economic outlook remains positive. What is more, public and private debt levels are low by international standards and the country enjoys a strong international competitive standing thanks to stable unit wage costs.

 

Stable real estate market development is also being helped along by a positive population trend, rising wages and extremely low interest rates.

 

  • A low unemployment rate compared to the EU average, at 5.0%
  • Diversified economy with a balanced structure
  • 8th place worldwide in the JLL Transparency Index
  • Inflation of 1.3% p.a. (over the past 10 years)
  • Economic growth of 1.4% in 2018; 0.6% in 2019 (forecast)

 Data as at: July 2018; source: DekaBank; JLL; bulwiengesa;

 

Vacancy rates on the decline in Germany due to high demand and the moderate new construction volume

Data as at: July 2018; source: DekaBank

Product
Domus-Deutschland-Fonds Nr. 2

 

The fund serves as a basic real estate investment for institutional investors. It uses diversification to exploit market opportunities for office, retail, logistics and hotel real estate in Germany and combines a stable earnings outlook with limited correlation with alternative investments.

  • Low interest rate environment means limited investment alternatives
  • Demand for real estate remains high
  • Widely diversified investments in real estate offer the prospect of stable returns
  • German real estate market offers high and stable location quality
  • Low correlation with alternative investments
  • Successor product to the fully placed Domus-Deutschland-Fonds
  • Investment in core/core+* real estate in German “A” and "B” category cities
  • Exploitation of market opportunities for office, retail, logistics and hotel real estate in Germany
  • Investment possible from €5.0 million**
  • Target distribution yield: 3.0% p.a.
*A share of up to 20% value add real estate can be added to the portfolio. **The company may deviate from this
  • Open-ended German special fund (section 284 of the German Investment Code (KAGB)); Insurance Supervision Act (VAG)-compliant, suitable for master fund investments
  • Target capital: min. EUR 375-750 million

Four questions for the fund manager

1. What factors speak in favour of the Domus-Deutschland-Fonds success story continuing?
With Domus-Deutschland-Fonds Nr. 2, you can rely on the real estate expertise and experience of Deka Immobilien’s multi-award-winning asset management team, which is also responsible for the fully placed Domus-Deutschland-Fonds. Deka also has its own real estate management team and a buy-side team with long-standing market expertise.

 

Marcus Rösch,
Head of Fund Management Deka Immobilien Institutional Funds

Four questions for the fund manager

2. Why does the concept invest in Germany? What makes the German real estate market so attractive? Take advantage of the potential associated with the German real estate market, which offers real appeal thanks to its stable location quality. The real estate portfolio focuses on Germany’s economic strengths, helping to stabilise your core portfolio.

Marcus Rösch,
Head of Fund Management Deka Immobilien Institutional Funds

Four questions for the fund manager

3. What is the aim of the concept?

Domus-Deutschland-Fonds Nr. 2 allows you to invest in a portfolio that is diversified within Germany. You can participate in core/core+ real estate in fast-growing locations in one of the most stable European markets while employing a relatively small amount of capital.

 
Marcus Rösch,
Head of Fund Management Deka Immobilien Institutional Funds

Four questions for the fund manager

4. What acquisition strategy does Domus-Deutschland-Fonds Nr. 2 pursue?
The fund boasts considerable development potential due to its focus on sustainable and highly profitable properties in German locations. The plan is to invest between EUR 20 million and EUR 70 million in approx. 15-20 properties, spread across office, retail, logistics and hotel real estate. The focus is on “A” and “B” category cities. We are committed to ensuring that tenants have strong credit ratings and are aiming for a broad tenant structure.
 
Marcus Rösch,
Head of Fund Management Deka Immobilien Institutional Funds

OFFICE

LOGISTICS

HOTEL

RETAIL

Deka Immobilien:
a competent partner for more than 50 years now

  • Ranks among the “Top 10” of Europe’s largest real estate asset managers with a team of around 560 real estate professionals
  • 507 properties in 25 countries on 5 continents
  • Extensive experience in the German real estate market and local knowledge of the individual locations
  • Deka’s outstanding managing expertise is confirmed time and again by external rating agencies
  • Extensive reporting and risk management
  • State-of-the-art risk management

 

Data as at: June 30, 2019; source: Deka Immobilien;  INREV Fund Manager Survey

 

Domus-Deutschland-Fonds Nr.2: the properties

Since Domus-Deutschland-Fonds Nr. 2 was launched back in 2018, nine properties with real estate assets amounting to around EUR 310 million have already been added to the fund. In addition to the acquisition of the office property located on Hamburg’s Süderstrasse, two retail properties in Göttingen and Detmold, as well as an Ibis Styles Hotel in Stuttgart, were acquired in the first quarter of 2019. This has further diversified the real estate portfolio, particularly in the hotel and retail usage types.

DOCK1, Mainz
Süderstraße, Hamburg
Limbecker Straße, Essen
Lange Straße 73, Detmold

Fund profile
The concept for real estate investment success

 

The successor product to Domus-Deutschland Fonds, which is already fully placed, Domus-Deutschland Fonds Nr. 2 draws the maximum benefit for investors from Germany’s economic strength.

Investment

Core/core+ real estate

Investment in prime locations in Germany, one of the most stable real estate markets in Europe

Sectors

Widely diversified
Exploitation of market opportunities for office,
retail, hotel and logistics real estate

 

Target market

Germany
Investment in German “A”
and “B” category cities and in selected metropolitan regions

Key data

Investment style:

core/Core+
Target sector: diversified
Target markets: Germany
Investment volume: up to EUR 1.5 billion possible
Term: unlimited
Forec. target distribution: approx. 3.0%+ p.a.
Target ratio of borrowed capital: 40-50%
Legal form: open-ended German special fund (section 284 of the German Investment Code (KAGB)); Insurance Supervision Act (VAG)-compliant, suitable for master fund investments
Target group: savings banks + institutional investors
Communication:

information via investor colloquium

Product launch:

Q1 2018

Minimum investment:

EUR 5 million

Reporting:

monthly

 

Deka-Domus-Deutschland-Fonds Nr. 2 aims to raise capital of at least EUR 375 million. The fund management team will use the capital to create a portfolio of 15 to 20 properties featuring broad diversification in terms of both sector and region. As with the predecessor fund, the investment strategy focuses first of all on core real estate, i.e. high-quality buildings in prime locations with long-term leases and tenants with strong credit ratings, and secondly on core+ real estate, as well as a small proportion of value-add real estate offering potential for increases in value through active tenant and asset management. This latter category includes buildings that offer development potential due to vacancy levels or lower quality. In addition, investors who opt for this fund also benefit from systematic liquidity management and comprehensive and transparent reporting.