Corestate launches second resi fund, targets 4% return

The Swiss private equity real estate firm is aiming to raise €300m and has secured a €70m seed investment from an unnamed German pension fund. 

Corestate Capital has launched an open-ended real estate fund that will target newly-built residential properties in cities across Germany.

The Zug, Switzerland-based private equity real estate firm said it would be targeting an annual return of 4 percent through the vehicle.

Corestate said it planned to raise €300 million of equity for the fund and had already secured a €70 million seed investment from an unnamed German pension.

Corestate Residential Germany II is a follow-up to the firm’s inaugural 2006-vintage fund, through which it raised around €486 million. Investors in that vehicle included Dutch bank ING, UK firm Morley and Australian logistics giant Goodman.

The firm has not disclosed which investors it hoped to attract to its latest vehicle, but it has been active in expanding its institutional investor base since it listed on the Frankfurt Stock Exchange in September last year, according to its annual report.

Thomas Landschreiber, the firm’s chief executive and co-founder, said the increase in demand from institutional investors since its IPO was “remarkable” and residential remained one of its most popular asset classes to its investors.

“Due to our strong network and asset sourcing capabilities, we have top quality assets worth several billion euros in our pipeline, which secures us an excellent advantage over our competitors,” he added.

Over the last 12 months, Corestate has signed two large mandates with German institutional investors. The first, announced in October, was a €500 million partnership with Bayerische Versorgungskammer to invest in micro-apartments across Europe, with a particular focus on Germany and Austria. In June, the firm also signed a deal with an unnamed German insurance company to invest in German residential assets.

Hannover Leasing Investment, which Corestate acquired last year, will act as the investment manager for the new fund, while Capera Immobilien Service, a Corestate subsidiary, will be responsible for asset management.