Rentals niche an investment draw – Park it in Poland

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KUWAIT CITY, Sept 3: The Trei Real Estate GmbH (“Trei”), an international developer and asset manager and KINGSTONE Real Estate (“KINGSTONE”), an investment management group for institutional capital, is in the process of establishing an exclusive longterm collaborative venture for shaping tomorrow’s landscapes and developing rental housing projects in major Polish cities. In the near term, it is intended to create an investment vehicle for the onboarding of interested investors.

KINGSTONE is tasked with managing the fundraising efforts, which entails identifying and engaging potential investors. They will also establish the appropriate investment framework and assume responsibility for fund and asset management. Meanwhile, Trei will participate as a co-investor and developer. Their role encompasses acquiring the land parcels, overseeing the entire construction process, and working in tandem with KINGSTONE to facilitate the eventual sale of investments upon project completion. Specific parcels of land in Warsaw and Poznan have already been designated for this collaborative venture.

Pepijn Morshuis, the CEO of Trei Real Estate, says, “Demand for modern rental apartments is definitely strong in Poland, whereas supply is very tight. The vast majority of Poles owner-occupy their homes, as the private rented sector is only just beginning to evolve.

Yet the younger generation prefers to rent modern, high-quality apartments over owner-occupancy in order to remain mobile and to keep from tying up their capital.

However, demand for rental apartments outpaces supply, especially in the major cities. The shortfall on the Polish housing market is estimated to approximate 1.5 million rental apartments, which compares to a present stock of about 10,300 as-new rental apartments – highlighting the urgent need for investments.”

A pipeline with the first secured projects to be developed within the scope of the collaborative venture is already in place. Here, Trei and KINGSTONE concentrate on the development of smaller apartments in inner-city locations that are tailored to the needs of young professionals, students, expats and young families.

With successful ownership apartment projects already completed and ongoing developments in Łódz, Wrocław and Warsaw, Trei is now moving ahead with its first rental apartment developments in the next step. Its initial two rental housing projects in Warsaw and Poznan have progressed to an advanced stage. Actual construction will start in Poznan in Q4 2023 and in Warsaw during the first half of 2024. Other cities with high potential for rental apartment developments include Krakow, Wrocław, Łódz, Katowice and Gdansk.

Poland’s private rental housing market offers serious growth opportunities. The main reason for this is that it accounts for just one percent of the entire housing market, and that it therefore plays so far a negligible role in the formerly socialist country. Until the end of the Cold War in the late 1980s, all housing was municipally owned, and nearly all of it began to be sold off as ownership apartments in the 1990s.

Philipp Schomberg, co-founder and executive partner of KINGSTONE, added: “The collaboration of KINGSTONE and Trei, which both have their principal places of business in Germany while maintaining branch offices with on-site staff in Poland, generates genuine value-added for interested investors. We are aware of enormous potential on the Polish rental housing market, yet there have been few projects so far that investors could actually invest in. Our plan is to present the rental housing projects of Trei as a platform to investors in order to generate a total investment volume ranging in the triple-digit millions.” KINGSTONE Real Estate is an institutional, ownermanaged real estate investment manager offering a range of products and investment strategies in the German & Central European markets, covering the entire risk-return spectrum from Core to Opportunistic. Our focus is on ESG products in the Residential, Office and Health Care sectors. In addition, we can also offer investment solutions in the field of real estate debt.
More information available at: www.kingstonegroup.de

Trei Real Estate GmbH, a German real estate company with registered office in Düsseldorf, acquires, develops and manages customized and sustainable residential and retail properties. As a wholly-owned subsidiary of the Tengelmann Group, it focuses on real estate investments and developments in Germany, Poland and the United States within the framework of its long-term strategy. In addition to c. 1.3 billion euros in assets under management, Trei Real Estate GmbH has c. 2.0 billion euros worth of developments in the pipeline. In Poland, the company develops, raises and lets retail parks under the Vendo Park brand. Also active on Germany’s housing market, e.g. in Berlin, Trei currently develops residential quarters combined with commercial premises as well as student apartments under the Quartillion brand. The company’s residential activities outside Germany include development projects in Poland and in the United States.
More information available at: www.treirealestate.com and www.trei-wohnen.de

Arab Times: Who is KINGSTONE and what makes you stand out?

Philipp Schomberg: We (KINGSTONE Real Estate) are an owner-managed real estate investment management group founded by the Schomberg family and Pegasus Capital Partners with primary focus on Germany, Austria and CEE. We serve institutional and professional investors with innovative investment solutions and regulated fund strategies for residential, office and healthcare properties. With our local teams in Germany, Poland and satellite local offices in the Netherlands and the UK, consisting of highly qualified experts, we offer tailor-made investment solutions to our clients. In the Middle East we have a trustful advisory cooperation with Mr Sattam Al-Jarallah, Senior Advisor, MENA region. [email protected]

AT: What’s the story behind Poland? Why exactly are you setting up a product in this country? How did your team identify the specific market where you decided to implement this strategy?

Philipp Schomberg: After living in the UAE for over 6 years, working for one of the Abu Dhabi based Sovereign Wealth Funds (Abu Dhabi Investment Council), I decided to move on and set-up a real estate investment business. The business, which is owned by my family, is also active in Poland as we see Poland as one of the major growth markets in Europe. Currently, we see that companies are drawing their consequences from the supply bottlenecks during the pandemic and are moving their factories and production plants to Poland in order to mitigate their supply-chain risks. The young and very well-educated population in Poland represents an extremely attractive environment for these companies. The foreign investments, coupled with the steadily advancing urbanization leads to a drastic increase of the demand for rental apartments in major Polish cities. As of today, there is a supply gap of about 1.5m apartments in Poland, mostly in the major cities. Historically Poland has one of the highest home ownership rates in Europe. But the preferences of especially young Poles are shifting in favor of renting modern, good quality apartments operated by institutional landlords, because mobility and liquidity rationales are becoming more important. Together with our strategic partner, we aim to meet this demand through the development of modern and ESG compliant residential units.

AT: Can you give us an overview of this strategy and what makes it unique in the market?

Philipp Schomberg: KINGSTONE established a cooperation with TREI – a well-known German Developer, subsidiary of the Tengelmann Group, to develop modern Residential for Rent properties across Polish metropolitan and major regional markets, with a view to stabilize high-yielding assets in the PRS (Private Rental Sector) that may be disposed of or held long term. The strategy fills a gap in this sector with products of high standard and specification tailored to the needs of young professionals, students, expats and young families. The Polish market is characterized by virtually no vacancy in the residential market which combined with strong demand creates a very favorable market environment for the strategy.

AT: Can you describe your cooperation with TREI? Why are you working together? How does this partnership enhance the overall effectiveness of the strategy?

Philipp Schomberg: The long-term partner TREI, an established developer in both Germany and Poland, is acting as a holistic developer of the properties. They acquire the plots for the PRS Developments and execute the entire construction, including the monitoring and project management. KINGSTONE on the other hand is the first point of contact for potential investors and responsible for the capital sourcing, structuring and the ongoing fund and asset management. Together we follow an “Economies of Scope”-approach, to combine the expertise of both parties to deliver exceptional results.

AT: How could interested investors from the Middle East get involved in this strategy?

Philipp Schomberg: Institutional investors and professional family offices could invest via tailor-made investment solutions through the KINGSTONE platform. We would be happy to introduce interested investors to the strategy in more detail. Our service encompasses the full value chain of real estate investment management including structuring, acquisition, asset management, risk management, reporting and final disposition of the investments. We are working on behalf of the investors to achieve the best possible risk-return outcome.

More information available at: www.kingstone-group.de www.treirealestate.com and www.trei-wohnen.de [email protected]

By Paul Francis X. Fernandes Arab Times Staff

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