Mixed Residential & Retail Development Project in Berlin, Germany; Targeted Investor IRR = 31%
Property type: Residential & Retail
• Land Plot: 6.400 m2
• Existing building: supermarket Netto (1.500 m2) pays the rent 267.000 EUR p.a. (long-term lease agreement)
• Planned additional construction: Drogerie Store (1.200 m2) & Residential (2.200 m2; 30 apartments)
• Tenure: Freehold
Investment type: Equity Investment in Development Project
Key Investment Points:
• Targeted Investor IRR: 31%
• Targeted Investor Equity Multiple: 1.63x
• Targeted Investment Period: 2 years
Project Timeline:
• Start of Project • Equity Investment: 1Q 2024
• Planning • Final Permits: 1Q 2024 - 2Q 2024
• Construction • Sales: 3Q 2024 - 4Q 2025
• Completion of Project • Return of Equity • Distribution of Profit: 4Q 2025
Funding Structure of Project:
• Investor (Limited Partner) Equity: 3,515,000 EUR (95% of Total Equity)
• Developer (General Partner) Equity: 185,000 EUR (5% of Total Equity)
• Total Bank Financing: 12,850,000 EUR
• Collateral for Investor (Limited Partner): land plot with running supermarket Netto and preliminary building permit for Drogerie Store + Netto rental income (second rank after bank)
Location: Berlin, Germany
INVESTMENT DESCRIPTION
The proposed investment opportunity is to purchase a land plot located in Berlin with an existing supermarket Netto (current rent 267.000 EUR p.a.) and a preliminary permit for the construction; to build the residential building (2.200 m2) for 30 apartments and a Drogerie Store (1.200 m2); to sell all the properties (supermarket Netto, Drogerie Store and residential building by apartment); and, finally, to make a profit and distribute the profit between Investor (Limited Partner) and Developer (General Partner). The Developer (General Partner) takes full operational responsibility, secures financing, guarantees completion of construction and sale of the property.
For these purposes Investor and Developer establish a joint-venture company: Investor - 95% of shares; Developer - 5% of shares. The project purchase as well as construction of the residential building and Drogerie Store will be also financed with a bank loan.
The targeted IRR to Investor is projected to be 31% with a cash equity multiple of 1.63x
(Investor’s targeted Profit is 2.238.000 EUR on Investor’s Equity of 3,515,000 EUR). The expected term of the investment is 2 years.
