Why invest in European REITs?
A sub-form of real estate stocks are the R eal E state I nvestment- T rusts. These are listed stock corporations that are consequently active in the real estate sector. The companies prefer to invest in the acquisition, sale, leasing and leasing of land and real estate. While this sub-market segment has been traded on the Paris Stock Exchange since 2002, Frankfurt and London were only added in 2007.
The REIT investment opportunities market is very promising as real estate markets in Europe are booming. This is partly due to the increasing population in Europe and the associated increasing demand for housing, especially in the big cities. In addition, the currently good and promising economic situation is causing demand for commercial real estate to rise. Experts expect a growing cash flow at European REITs of about 6 percent per annum and yields between 5 and 6 percent in the next few years .
Overall, REITs can be considered attractive diversification combining the benefits of investing in equities with the specifics of open-ended real estate funds. That's why today we introduce you to an interesting REIT fund, the Prefimmo REIT Fund, which invests almost exclusively in European commercial real estate. The Fund invests at least 51% of its assets in equity securities, such as real estate companies and real estate companies.
The investment focus is particularly on France, the Netherlands and the Benelux countries with a target allocation of 50 to 70 percent of fixed assets . The distribution is as follows: 30 - 40 percent in offices, 30 - 50 percent in sales, 0 - 10 percent in housing and 10 to 20 percent in other uses. The broadly diversified real estate portfolio spreads the risk to over 5,000 individual properties within Europe.
One of the top 10 positions of the Prefimmo REIT Fund is the alstria office REIT with a weighting of 3.95 percent . This German REIT specializes in office space in Berlin, Dusseldorf, Frankfurt, Hamburg and Stuttgart. Alstria's portfolio is currently being adjusted, as it is now ensured that it will no longer invest in rented apartments in the future. In addition, the debt financing ratio is less than 40 percent and thus meets the requirements of Prefimmo. Alstria real estate is currently managed by a team of over 100 people. Here, a qualitative property management by the experts of the company is in the foreground in order to deliberately not have to make decisions by financial market specialists.
In the first quarter of 2018, Alstria generated sales of 48.3 million euros and an operating result of 29.8 million euros . Overall, the company expects sales of 187 million euros for 2018 and an operating result of 110 million euros.
One of the objects of the Alstria REIT is the following:
- Location : Amsinckstraße 28 / Woltmannstraße 15, 20097 Hamburg
- Use : commercial / offices on the ground floor, offices in the 1st - 7th floor, underground parking in the 1st basement
- Total lettable space: approx. 8,500 m2
- Year of construction : 1991
- Revitalization : 2017 - 2018
- Architect : KPW Papay Warncke and Partner Architekten mbB