Reggeborgh’s Mark Bouwens says the partnership with Bouwinvest has given Reggeborgh a sharper focus. “Ten years ago we had around € 500 million invested in offices, retail and residential. Bouwinvest convinced us to focus, and now most of our real estate investments in the joint venture are residential. And we have important strides on the governance and transparency fronts.”
Bouwinvest and Reggeborgh are also a good match in terms of know-how and experience. Reggeborgh has been involved in the German real estate market for well over 20 years and knows the market inside out and can also act quickly. “What we bring to the table as Bouwinvest is our global view of trends in the world’s real estate markets. And our research focuses very much on cities, like Berlin. Reggeborgh’s on-the-ground experience and our global perspective institutional approach and in-depth research makes us a perfect match,” Tross says.
Bouwinvest and Reggeborgh sold a portfolio of residential properties in Berlin Marzahn in the biggest residential transaction in Berlin in 2015. The two had been discussing the sale of the Marzahn portfolio for two years, but the timing was not right until last year. “In the end we had two very keen rival bidders, which pushed the price way above our own expectations. And we took a much more institutional approach, hiring a merchant bank to broker the deal. The result was spectacular and we emerged with an IRR that was more the double the original underwriting for these assets,” Bouwens says.
The challenge now, of course, is to reinvest the proceeds of the deal in top-notch real estate, but Tross and Bouwens believe that will be possible. “We believe there’s still a lot of potential in Berlin residential real estate,” Bouwens says. Tross points out that GDP per capita in Berlin is one of the lowest among the top German cities. “That points to a lot of upside potential in terms of wages and spending. Plus some 40,000 people move to Berlin every year, so housing demand is growing fast. And who knows what’s going to happen over the next 10 years. Berlin is hot right now and we believe this is still a good time to invest in the city. ”