Target Information

KINGSTONE Real Estate has acquired the residential development "Goldstück Pforzheim" through a forward funding agreement with PHEROH Unternehmensgruppe, based in Neuss, North Rhine-Westphalia. This project will be integrated into the sustainable residential real estate special fund "KINGSTONE Wachstumsregionen Süddeutschland II" (KWS II) and is scheduled for completion in 2023, encompassing approximately 8,500 square meters of rental space. The specific purchase price has not been disclosed.

The development will feature a mixed-use approach with 109 planned rental apartments, 28 of which are designed for senior citizens, representing about a quarter of the total units. Each apartment will include loggias, balconies, and fitted kitchens. Additionally, around 1,200 square meters will be allocated for commercial spaces suitable for retail, gastronomy, or office usage, which can be divided into up to five separate units. The residential quarter will also feature aesthetically pleasing exterior landscaping and 121 parking spaces in an underground garage. Upon completion, the project aims to achieve a Gold certification from the DGNB.

Industry Overview

The real estate sector in Germany has been significantly influenced by urbanization and demographic changes, particularly in residential development. With increasing demand for sustainable, mixed-use living environments, property developers are increasingly focused on creating projects that serve diverse community needs. The German market is seeing a shift towards integrating elderly-friendly designs into new developments, reflecting the aging population's needs.

In Pforzheim, a city located in the state of Baden-Württemberg, similar trends are evident. Recent developments have prioritized sustainability and accessibility, aligning with the broader objectives of urban planning to create livable, inclusive spaces that serve all age groups. The city's proximity to larger metropolitan areas enhances its attractiveness for new residential projects.

Moreover, governmental support for sustainable building practices and eco-friendly certifications, such as those provided by the German Sustainable Building Council (DGNB), is encouraging developers to innovate and invest in higher-quality projects. This trend is not only beneficial for environmental outcomes but also for attracting investors looking for long-term, stable returns.

The residential real estate market in Germany remains resilient, with stable rental yields and ongoing demand for urban living spaces. Projects that integrate living needs with communal and commercial facilities are well-positioned to succeed in this dynamic market.

Rationale Behind the Deal

The acquisition of "Goldstück Pforzheim" aligns with KINGSTONE Real Estate's strategic focus on developing sustainable and long-term investments in urban residential properties. By integrating mixed-use spaces that cater to a broad demographic, the project is well-aligned with current trends in urban living and addresses the specific needs of the Pforzheim community.

This investment offers an opportunity to tap into a growing market segment focused on sustainability and accessibility, which is increasingly prioritized by residents. Moreover, the planned DGNB certification signals a commitment to high environmental standards, making the project more attractive for socially responsible investors.

Investor Information

Founded in 2020, KINGSTONE Real Estate launched its open-ended special fund KWS II in collaboration with service provider INTREAL. The fund targets a total volume between 350 and 400 million euros, focusing on investment by credit institutions, foundations, and pension funds. KINGSTONE primarily invests in residential and grocery retail properties located in urban neighborhoods, emphasizing sustainability and thorough pre-acquisition evaluations to ensure the ecological viability of their projects.

As a forward-thinking real estate firm, KINGSTONE is committed to balancing profitability with environmental responsibility. This strategic approach positions them favorably in the evolving real estate landscape in Germany, particularly as more investors seek sustainable investment opportunities amidst increasing regulatory and social pressures.

View of Dealert

The transaction involving the acquisition of "Goldstück Pforzheim" by KINGSTONE Real Estate is positioned as a strategic move within a vibrant and growth-oriented market. Given the growing emphasis on sustainable living and urban accessibility, this investment is likely to yield long-term benefits as demand for such properties increases.

Moreover, the mixed-use nature of the development, which provides residential options alongside necessary commercial facilities, enhances its viability and attractiveness to potential tenants. This synergy is increasingly important in urban settings where lifestyle and convenience play crucial roles in living choices.

From a market perspective, the integration of eco-friendly certifications adds significant value to the investment, appealing to Green investors who prioritize sustainable development. This could potentially lead to better occupancy rates and a strong return on investment, ensuring the project's long-term success.

In conclusion, the acquisition appears to be a sound investment for KINGSTONE Real Estate, capitalizing on key trends in the Pforzheim market and addressing the evolving needs of urban residents. The forward-thinking approach taken by both KINGSTONE and PHEROH will likely contribute to the project's overall success and long-term sustainability.

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