Activum Capital Management, the real estate investment manager, has acquired a 94 percent stake in WI-IMMOGroup, Germany's largest senior housing developer, for a figure understood to be just under €50 million.
The transaction was made on behalf of the firm's third real estate vehicle, Activum Fund III. The investment also means Activum's fund has now committed nearly all of the €380 million of equity that it raised from institutional investors, believed to be mainly from the US but also South America, by the vehicle's final close in March 2014.
Activum's founder and managing partner Saul Goldstein, who formerly spent 10 years working for US firm Cerberus, said the rationale behind the deal was to capitalize on Germany's ageing population.
European Union statistics show that 21 percent of Germany’s population is currently aged 65 or more and this proportion is forecast grow to 28.1 percent by 2030. German government projections suggest care providers in the country will need to build additional space to accommodate 300,000 more of its elderly citizens by 2030.
Goldstein, speaking at the EXPO Real conference in Munich yesterday, said: “Germany’s ageing population presents a compelling investment opportunity that we’re grabbing for our investors through WI-IMMOGroup’s market-leading platform.”
“There is a lot of investor interest in senior housing in Germany and the competition is pushing up asset prices, which is why we have gone down the developer route. It’s a strategy the fund has also pursued in Germany’s mainstream housing market, through its investments in formart and GRK,” added Goldstein.
Founded in 2008, WI-IMMOGroup sells units in care homes and retirement complexes that it has either developed itself or on behalf of operators and owners. The company currently has a pipeline of 22 projects.
Frank Winkel, founder and chief executive officer of WI-IMMOGroup, said: “With the support of our new shareholder we are looking to broaden our footprint right across Germany and to step up the number of care-home units that we deliver to around 1,000 a year, from about 650 currently.”
Aside from acquiring German residential developers formart and GRK, the fund’s other investments include: real estate loans, residential developments, office and retail properties. All of the assets are located in either Germany or Spain.
Activum's predecessor vehicle, Activum Fund II, garnered around €248 million in capital commitments.
Advising Fund III on the WI-IMMOGroup purchase were Noerr and Deloitte as well as industry consultant Terranus.