Starting on 1st January 2019 Grossmann & Berger will be launching a new service division dedicated to capital investments, the KAT (Kapitalanlagevertrieb). This division will focus on the sale of individual properties which serve as classic capital investments for private customers. These will include residential conversion projects, holiday lets and serviced apartments such as residential care units and micro apartments, in new builds or pre-existing developments. “The period of low interest rates in recent years has led to vastly increased demand for investment opportunities in real estate. This new business division is designed to address the needs of such customers,” says Lars Seidel
, managing director of Grossmann & Berger, member of German Property Partners
(GPP). “The new capital investment division KAT will enable us to offer all classes of asset in the capital investment segment and establish ourselves as Hamburg’s first supplier of all-round services in this field,” remarks Andreas Gnielka
, head of department, residential properties stock/letting and capital investment at Grossmann & Berger.
Experienced team advises developers and buyers
will head the capital investment division KAT. During his time as sales manager of the shop in Hamburg’s Winterhude district, Vujovic has gained comprehensive expertise in the business of converting larger houses into apartments for sale. In cooperation with Grossmann & Berger’s HafenCity team in Hamburg he will be responsible for all aspects of sales to private investors. Well experienced in the sale of development projects, the team can provide first-class consultancy services to developers wishing to sell, and potential buyers looking for the right property. Before any property contract is signed, Grossmann & Berger subjects the project to a thorough examination. Stage one is to scrutinize the profitability and feasibility of the scheme in terms of concept, purchase price and quality. The next stage is to ask external experts for their considered legal opinion. “In this way we can be sure that our buyer is investing in the right property,” says Gnielka
. “And the team can also review the client’s existing real estate portfolio with the aim of recommending what may be done to optimize his/her holdings,” adds Vujovic
Residential conversion projects: apartments for individual buyers
Residential conversion projects generally involve apartments that come onto the market when residential properties are offered to private buyers. Vujovic
says that, “Unlike the situation when entire buildings containing rental apartments are sold, conversions aim to sell individual units. We offer the buyers and owners of rental apartment buildings a package of services for the process of converting the flats into units for individual ownership and the business of selling them.” “The end result is a win-win situation: for example, the owner can sell some of the apartments and re-invest the profits. Buyers can put money into a ready-developed capital investment with a proven and defined yield,” says Gnielka
. One such conversion project currently being marketed by Grossmann & Berger is “EPPSIDE
” in the Hamburg district of Eppendorf. Here an existing multi-family house is being redeveloped into 34 modern apartments for private buyers. The yield obtainable on a one-room flat on the first floor is around 4%. In addition to the sale of conversion projects in Hamburg, there are plans to sell, or cooperate in the sale of, conversion projects in Germany’s top 7 cities.
Holiday lets with a management scheme
Currently, Grossmann & Berger has plans for 180 holiday home units and intends to professionalize this segment within the new KAT capital investment division. For private investors, the most suitable properties are apartments and houses under management, for example through arrangements with a hotel. “At the moment, we are focussing on the North Sea and Baltic coast regions. From the yields point of view, real estate in popular coastal resorts or islands is of particular interest,” says Gnielka.
In Binz, on the island of Rügen, Grossmann & Berger is selling agent for holiday accommodations with fixed lease arrangements in the hotel and apartment complex “meerSinn”. “Holidaymakers may use the hotel spa facilities so that high occupancy rates are to be expected, even in the off-peak season. In this case the yield of 6.5%, as fixed and defined in the lease agreement, can in fact be increased,” says Vujovic
Serviced apartments: a variety of concepts
The third sales area addressed by the KAT capital investment division of Grossmann & Berger relates to serviced apartments. These include residential care, micro apartments for students or business people and serviced apartments. In addition to Hamburg, sales in this sector of the market focus on important university towns and Germany’s A and B category cities. In the residential care sector, Grossmann & Berger already cooperates with HypoServ, a property service provider, to market properties in Bremen, Lübeck and elsewhere. Summing up, Gnielka
says, “Such a wide range of options for private investors permits us to serve every investment choice. Buyers looking for a secure capital investment are well-advised to buy converted apartments that are let on a long-term basis. Higher yields may be expected from care facilities, holiday homes and micro apartments, but their occupancy rates can fluctuate more.”
Caption 1: Zoran Vujovic is head of the new capital investment division KAT. He has worked for Grossmann & Berger for many years, his last position being that of sales manager of the Winterhude shop and the HafenCity team. Source: Grossmann & Berger
Caption 2: For conversion projects such as this multi-family property in Hamburg-Eppendorf, Grossmann & Berger is creating an individualized marketing strategy. A dedicated project website will be set up for properties such as this one. Source: lichtecht GmbH
Caption 3: In Binz, on the island of Rügen, Grossmann & Berger is selling agent for holiday accommodations in the hotel and apartment complex “meerSinn”. The fixed lease agreement and arrangements with the hotel offer attractive yield potential. Source: Braun Immobilien