Background:
A coherent and focused strategy is becoming increasingly important in institutional real estate investment. Investors no longer want the generalist manager who is supposedly active all over the world, but increasingly opt for genuine specialists who know their local market inside out. Based on this insight, GalCap – Austria Immobilien I is a specialized fund that invests where the management is at home: in Austria.
Implementation:
A clear investment concept was developed and, together with a renowned placement agent, the fund was fully placed with several German pension funds and pension schemes within a short period of time. In addition to the attractive investment country of Austria and the high-quality properties, the strong local management competence of GalCap Europe was particularly convincing for the investors. An independent, owner-managed asset manager based in Vienna, where the acting persons have decades of experience in the Austrian real estate market, is exactly the right manager for this fund.
A defensive investment strategy with a high proportion of residential properties (70%) and an admixture of established office properties (30%) can play to its strengths. In the residential asset class, investments are primarily made in smaller, newly built properties in very good, central micro locations that are let at moderate rent levels. They represent the stability anchor of the portfolio. The addition of some office properties, mainly in Vienna, increases the expected average yield and especially the cash distribution component of the fund.
Sustainability is a mainstay in all of GalCap Europe’s activities. It was therefore a matter of course to align the fund with environmental and/or social characteristics in accordance with Article 8 of the EU Sustainable Finance Disclosure Regulation (SFDR). In order to ensure the long-term value of the portfolio, environmental, but also social and governance factors have become an indispensable part of real estate investments.
Since the fund’s launch in February 2020, nine first-class properties worth over EUR 215 million have already been acquired. Further purchases are underway and the fund’s target volume of EUR 300 million will be reached on schedule.
Conclusion:
A good strategy alone is not enough. It also needs the right manager to implement it. In the case of GalCap – Austria Immobilien I, both have come together in an outstanding manner.