In an increasingly demanding market environment, investors are faced with the challenge of identifying high-yield property investments. Real I.S. AG presents different approaches to investors. The company is strengthening its investment fund platform by adding systematic products which harness the current market opportunities. The new “LogistiX” fund focuses on the particularly attractive real estate asset class of logistics. In addition, Real I.S. offers club deals that are tailored to meet the specific requirements of individual investors and enable selective investments in properties with particular potential.
Flexible investment structures focused on specific real estate
A club deal is far more than a classical co-investment structure. It is an investment vehicle which is not based on a generic investment strategy, but is developed around a specific asset. By contrast with classical investment fund products, club deals focus primarily on the individual configuration of an investment – from the structure to the monitoring. As a rule, a small group of institutional investors join together – or there is a single partner – for an investment in a property that exactly matches the expected return targets, defined risk profiles and planned portfolio strategies. In this way, club deals may not only offer access to individual, particularly attractive real estate of different use classes, but also to a made-to-measure investment structure. Governance, maturities, reinvestments and exit scenarios can be individually determined. At the same time, investors have more strategic influence and remain closely in touch with the asset.
A look at Barcelona: USP makes the difference
Not every property is suitable for a club deal. Crucial success factors are a clear investment story and a convincing unique selling proposition (USP) – based on the quality of place, market dynamics, the operator profile and the concept of use. One of our recent examples: the purchase of the four-star hotel ‘Barceló Raval’ in the centre of Barcelona. This striking landmark property convinces with an excellent position, the high architectonic quality and a stable performance. The tenant – a family-run business with about 90 hotels in Spain and 300 hotels worldwide – has in-depth market know-how and a strong credit rating. What makes the property especially attractive is its location: after the pandemic, Barcelona’s hotel sector has recovered quicker than the markets in many other European cities. In the long-term, the market will continue to be driven by a stable demand from tourists and a limited supply. The city is among the leading hotel markets in Europe, and the number of visitors is rising. Tourism is expected to grow again in the coming years. This constellation has paved the way for a strong investment story. So, the club deal structure has been focused on the needs of the involved investor.
Timing and transaction capacity as success factors
Such Investment opportunities often arise at short notice and cannot be freely replicated. In addition to an in-depth understanding of the market and market access, the ability to act fast is therefore an especially decisive key to success. But Real I.S. does not regard Club Deals merely as a reaction to investor demand, it sees them as a strategically applied instrument for systematic market development. Real I.S. has offices in key markets such as Germany and Spain, and also France, Luxembourg, the Netherlands, Ireland and Australia. An international team with local market knowledge and expertise identifies and seizes opportunities at an early stage.
Another decisive factor is the smooth collaboration of all specialist departments. The expert teams from Acquisition, Investment Management, Asset Management and Sales work hand in hand – from a first screening of the market through the structuring of deals to their closing. They provide an all-round perspective which makes solid investment decisions possible.
Active approach confirmed by successful exist
The most recent exist of an individual fund of Real I.S. shows that a selective investment approach makes sense. All properties in German ‘A’ and ‘B’ rated cities were sold for the mandate of an institutional investor. Launched in 2015, the investment fund generated an average annual internal rate of return (IRR) of more than 10 percent during its life. The high occupancy rate, an excellent quality of the property and the targeted timing of disposal confirmed the strategic added value of customised investment solutions. This example clearly demonstrates that Real I.S. is able to achieve a positive performance for investors also in challenging market situations – based on in-depth analysis, active asset management and made-to-measure investment strategies.
Conclusion: club deals are more than a temporary trend
For Real I.S. Club Deals are not simply niche products, they are a systematic core business feature. They supplement the investment fund platform in cases which involve individual properties with character, special windows of market opportunity or flexible structures. They are an expression of a partnership-based approach. Each investment is tailored to meet the relevant investor’s needs – with a well-defined investment story, customised structure and involvement of an interdisciplinary team of experts with long-standing expertise in the transaction sector. The result are participations which take account of market circumstances and exactly meet investors’ strategy requirements.
Demand for club deals has been rising in recent years. Institutional investors are increasingly recognising that this structure can enable them to enter new market segments, seize timing opportunities or focus on particular regions – outside the framework of classical investment fund solutions. Club deals require deep knowledge of the market, structured investment processes and a resilient network.