Corpus Sireo tipped for large German resi portfolio sale

Corpus Sireo, the Germany-based real estate group, is believed to be coming forward with a large-scale residential portfolio for sale.

The company, which manages approximately €3.5 bn of assets and is owned by Swiss Life Asset Managers, is drawing up plans to market a portfolio understood to span more than 20 German locations including Berlin and Lübeck.

The process is still at an early stage and not expected to hit the market for several weeks, but experts suggest a guide price of between €300 mln and €320 mln has been mooted.

It is being seen as a follow-up to Corpus Sireo’s so-called Agora sale in 2019 of 96 properties in 11 German states comprising 1,800 rental units which was purchased by the Primus Valor group of companies in Germany. In that instance, the package was made up of small units spread across 35 cities.

With large existing residential portfolios in short supply but high demand in Europe, the package should attract significant interest from a range of domestic and international investors.

German residential property volume was said to be almost unaffected by the Covid-19 pandemic in 2020. Property advisor Savills said in October 2020 that transactions over the first three quarters of last year were up 29% on the same period in 2019 and also on the five-year average. It recorded €15.8 bn of sales involving assets of at least 50 apartments each.

That said, the figures were somewhat skewed by the acquisition of Adler Real Estate by Ado Properties, and Q1 2020 was particularly strong. Berlin’s rental cap continued to cause uncertainty, the agent added.

In a Housing Market Report published in November 2020, JLL said after a short dip at the beginning of the Covid 19 pandemic, the residential real estate market showed a very stable development.

‘Not only was the trading volume of the institutional investment market able to follow pre-Covid 19 developments, but also the prices have continued their high level of the past years. This means that the housing segment is already considered one of the winners in the real estate market,' said the report.

Trades continue to happen. As previously reported, in February Round Hill Capital said its European Residential Income Fund II (ERIF II) completed a deal to acquire a 1,000-unit residential portfolio in East Germany from a subsidiary of Orlando Real Berlin.

Michael Bickford, founder and CEO of Round Hill Capital, commented: ‘The current economic conditions have tested many asset classes, yet accommodation continues to provide consistently stable income streams at a time when yield is under intense pressure and this is driving investment demand from international institutional investors.' BNP Paribas brokered the deal.

DZ Hyp said in its October 2020 Real Estate Market Germany 2020/2021 report that whereas the pandemic had hit commercial real estate hard, the residential market had been largely unaffected. ‘Property prices continue to increase across the country and rents likewise.’

The report added, however, that rental growth had slowed noticeably, a trend that set in before the pandemic. Reasons for this, it speculated, were to do with already high rents, slower population growth and a gradual improvement in housing supply. Initial rents range from €13.30 per m2 in Dusseldorf to €20 per m2 in Munich in Q3 2020.

Corpus Sireo is a fund and asset manager that employs 370 staff at eight locations in Germany. The company completes approximately 500 residential units per year with a marketing volume of around €200 mln.

Swiss Life declined to comment.


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