Pramerica Real Estate Investors has formed a EUR 120 mln joint venture to invest in apartment blocks in Berlin, the largest residential market in Germany. The Luxembourg-based joint venture, Preco Kauri CAB, has already acquired 13 residential buildings for EUR 24 mln. The assets comprise 325 residential units over 22,000 m2.

The JV, Pramerica said, aims to take advantage of the current strong rental growth in Berlin and the large numbers of 'under-managed' residential flats currently available in the city, and which can be acquired at attractive prices.

The joint venture partners are Hagen Kahmann and Julian Brown, the founders and principals of Kauri CAB Management. Based in Berlin, Kauri CAB has 18 employees and manages EUR 80 mln of residential assets. The company will manage the properties acquired by the partnership and seek to add value through capital expenditure and possible rent increases.

Pramerica's London-based merchant banking group structured the investment on behalf of institutional investors in its Preco IV fund.

The company is the European real estate arm of the real estate investment and management business of US-based Prudential Financial. The company manages $46 bn (EUR 32 bn) in gross real estate assets on behalf of more than 490 clients worldwide.