Home » News » German investor targets US apartments creates fund of One Billion Dollars

The real estate market in the US is now at hype. Reason behind this scenario is that Federal Reserve has lowered the mortgage interest to 4%- 6%. Per annum, the rise in interest will be around point 1%. Whereas, when it comes to million dollar properties, real estate market is dropping. It is known to everyone that property dealing business generates and circulates a lot of money in financial as well as stock market. The prime locations of the US are now a target for foreign investors to make property dealings.

German investor from Hamburg, HANSAINVEST Hanseatische Investment GmbH; property management branch of Iduna group has shown their keen interest. They are willing to invest in residential area in the United States. Recently, they have launched a fund of $1 billion and have named it HANSA US Residential. This generated revenue will be put to use to initiate institutional investors who are interested in the core American residential properties.

Probable reason for German Investor’s interest in American property:

To start with, a major reason is the mortgage rate which is already stated. Another reason that might have intrigued to initiate HANSA US is the currency value. German’s currency ‘euro’ is stronger than USD. This is why, if Germany is willing to invest 1 Billion euros in America’s residential real estate property, the amount of 1 billion is actually increased when converting it to USD.

For instance, 1 euro is equal to 1.12 USD. Now imagine if German Investors are willing to pay $1 Billion USD, they are actually paying 891376820.64 Euro. This way, profit margin will increase at a much higher rate.

Interested partner of HANSA US

An apartment investor, Bell Partners, has shown their interest in HANSAINVEST fund management, to put money in America’s residential real estate. The company is mainly focused on the United States multifamily societies. They have approached to put the acquired fund into the operational procedure to start the market as soon as possible.

The target fund amount is around $1million with equity plans for $500 million in an average. As per the investment and distribution plan for the fund, 4.5% will be produced for investors, as per HANSA US residential plan. The entire process of trading will take place under the legal term of KAGB, a German real estate capital code.

About Bell Partners working with HANSAINVEST:

Presently, Bell Partners are having 600,000 units of management in the field of real estate. They have expertise data in market research, market risk, property operation and management. They are also one of the largest realtors when it comes to property renovation.

In HANSA US, they will be co-investors. This will help the project because; they are more aware of the US market than HANSAINVEST. The property dealing procedure will take place at a greater and higher level, more conveniently. With this, chances of market risk also reduce to a large amount.

Market scenario:

  • Between 2014 and 2015: Due to the USD value which is higher than most of the other countries, there was a drop of 7% to 9% in real estate market.
  • 2016: Present survey is showing some other results for which 80% of AIFRE, Association of Foreign Investors in Real Estate, believe that the market never changed. It still has a high chance of investment as well as return of profit in property
  • AIFRE also noted that this sector is holding first position among non-American investors in real estate.

With this market improvement and constant flowing of money, chances of America’s real estate to make more profit have increased drastically.