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Optimum announces second acquisition for GREF IV Fund

Optimum Asset Management, the boutique real estate investment manager, has announced the acquisition of a 4,367 sqm residential building in Berlin-Tiergaten. The deal is the second acquisition from Optimum’s German Real Estate Fund IV (GREF IV), which has a strategy to invest in a diversified portfolio of residential and commercial properties.

The residential building, built in 1959 by Allianz insurance company, comprises 70 apartments. Located in the heart of Berlin, in the Mitte district, the area is well known for the Tiergarten park – Berlin’s largest and most popular park – and for being a parliamentary, government and diplomatic district.

GREF IV, is the fourth iteration in a series of strong performing German real estate funds from Optimum, pursuing properties in the range of €10-40 million. Targeting a total size of €600 million, this fund seeks to add value by optimising mispriced and mismanaged residential and commercial assets near major infrastructure and employment hubs. The primary target area is Berlin, with selected investments in high-growth, supply-constrained cities such as Hamburg, Dresden, Leipzig, Cologne and Düsseldorf.

Alberto Matta, Chairman and Founder at Optimum Asset Management, said: “The fundamentals in Berlin real estate remain compelling as the unique mix of competitive residential property prices, investment safety, strong return on capital, and long-term growth prospects continue proving its intrinsic value.

“This second acquisition is indicative of a portfolio with a greater degree of diversification and growth that will be decentralised. Especially in a city like Berlin, which is predicted to set pace for the German real estate industry. The current reurbanisation of large cities in Germany create opportunities for residential investment. This, combined with the significant gap in residential supply and demand due to the growing population in major German cities such as Berlin, means we continue to see the significant opportunity to create value in this market.”

With the support of its 12-strong Berlin team, which includes nine German asset managers headed by André Gretsch, Optimum has completed over €1.5 billion of real estate transactions in the region since 2006, establishing tailored asset management initiatives to improve cash flows and create value by timely exits.

The firm’s track record includes Property I, the Berlin-focused real estate fund, which was fully realised in 2014, achieving an IRR of 19% and a 2.3x MOIC. Optimum’s Property II (2011 vintage) and Property III (2014 vintage) are centred on Berlin and Potsdam, with additional properties in Dresden forming part of the Property III portfolio. Property II and Property III currently have a total return of around 290% and 170% since inception, respectively. Realised assets have achieved an IRR ranging from mid-teen to 30+%.