Residential Sub-fund
The second sub-fund with the final committed equity amounting to 219,2 million EUR is focused on acquisition, development, management and disposition of middle class and luxury residential properties located across Central Europe, Germany, Baltic countries and Croatia.
The Sub-fund also may invest in sustainable self sufficient energy buildings. It is structured as a regulated Luxembourg Fonds Commun de Placement with RBC Dexia IS as a custodian bank.
The Sub-fund is investing into positive demographic areas like Prague and Warsaw, where people are moving to in order to take advantage of new jobs, lifestyle and infrastructure.
The first acquisition of Residential Sub-fund took place in December 2006.
Investment strategy
The Sub-fund follows a core plus strategy searching assets of superior quality, but with the potential to add value through active asset management.
The Sub-fund will target individual assets that range in size between 10 and 50 million EUR.
4 basic types of investments
Portfolios
The first type of investment is the purchase of existing residential portfolios with long term lease contracts, mainly with lower rents, but higher indexation of rents with upward value potential.
Apartments
Purchase of completed apartments or pre-purchase of apartments in development, lease of apartments and resale as a portfolio or by units within 3-7 years.
Residential development
Other investments include the co-development projects (25% share) with ORCO (development of residential properties).
Refurbishment/Redevelopment
Purchase of individual residential buildings in attractive locations for refurbishment to luxurious apartments, held for lease or resale by units.
Target markets
Target markets are the Czech Republic, Hungary, Poland, Slovakia, Germany, Baltic countries, Croatia, Bulgaria, Romania and Russia. In most of these target markets ORCO has already an existing local execution platform.
Early identification of potential transactions through existing contacts and local platforms are expected to result in the Sub-fund being an advantage in the market place to capture investment opportunities.
Preferable allocation are in countries where ORCO has its own platform and track record. Approximately 80% of the investments will be in the main ORCO territories (Czech Republic, Poland, Germany, Hungary, Slovakia). Roughly 25% will be in Germany and under 20% will be in the other target markets (Bulgaria, Romania, Croatia and Baltic countries).
| Foundation | 2006 |
| Fund term | 7 years + option for extension |
| Committed capital | 219,2 million EUR |
| Target IRR | 17,5% |
| Target LTV | 65% |
| Geographical focus | Central and Eastern Europe, Russia |
| Assets under management* | 106,5 million EUR |
| Number of acquisition* | 6 |
| Rentable area under management* | 40 087 m2 |
| Signed future purchase contracts* | 3 |
| Area under construction* | 9 523 m2 |
| Number of co-developments* | 5 |
* as of 31st March 2008