Deutsche Real Estate Funds (DREF), the Luxembourg-based student housing investment manager, has signed an 18-month revolving credit facility with leading European credit asset manager Chenavari Investment Managers, securing around 50 million euros for further investment in student residences.
Following this deal, DREF now has 150 million euros of investment capital available to fund growth in 2016.
“In 2015, we invested 135 million euros in student accommodation facilities in Germany. In 2016, we plan to at least double the size of the portfolio as we ramp up activity across the business. We’re delighted to have raised part of the capital necessary to achieve this in cooperation with our long- standing partner Chenavari. The revolving credit facility provides us with the necessary flexibility to move fast once we’ve selected an attractive value-add opportunity. In current market conditions, speed is a major factor in determining success as demand for good quality residences in central locations is extremely competitive,” says Felix Bauer, CEO and CSO of Deutsche Real Estate Funds Advisor.
“DREF’s first bond issue to finance student accommodation facilities established this type of investment for German institutional investors. The company’s leading expertise and first mover advantage together with our previous successful track record with management in what we see as a sector with huge growth potential are key to us providing DREF with the necessary financial capacity for further growth,” says Sam Mellor, partner and senior portfolio manager for European real estate funds at Chenavari Investment Managers.
As a leading private owner and operator of student accommodation in Germany, DREF lets more than
3,500 residential units under the “TWENTY FIRST Student living” brand. In June 2015, DREF issued the first bond for the funding of student housing in Germany, giving institutional investors access to this form of investment for the first time. At the request of some investors, the bond volume was increased to 77 million euros in November. Thanks to its stable cash flows and yields above those of the regular residential market, student housing is gradually becoming established as an attractive asset class in the residential property segment in Germany.
Chenavari Investment Managers is an asset manager focussed on credit, real estate and structured finance with 5.4 billion US dollars in assets under management on behalf of its clients. In the last three years, Chenavari has increasingly branched out into the student housing market, having made multiple investments in the sector in the UK.