Cologne-based DERECO, an independent multi-family office for real estate assets, has obtained additional buying mandates for real estate investments amounting to approx. EUR 100m from three associated entrepreneur families. DERECO will not only be in charge of purchasing but will also provide asset management for all properties to be bought.

As far as these new purchases are concerned, DERECO’s strategy is to focus both on major A locations and on sustained, appealing B and C locations throughout Germany. In its search, DERECO will also consider possible spots in cities and towns starting with a population of about 50,000. “The smaller the community, the more attention we will pay to micro-locations. In smaller towns, we mainly invest in pedestrian zones and/or outstanding retail areas or central locations,” says Marc Ludwig, Senior Investment Manager of DERECO.

For future investments, DERECO intends to focus solely on retail, office and residential properties, favouring residential and/or retail-cum-office buildings with mixed usage and a multi-tenant structure. “Due to the currently high buying factor in the market, i.e. the ratio between property price and annual rent, we won’t include purely residential properties in our portfolio,” says Marc Ludwig. “As far as housing and office properties are concerned, we believe that the lower floors of those buildings will ideally be used for retail.”

DERECO prefers either real estate on stock as good as new or new constructions bought in through forward deals. Additionally, the company makes exceptions on building age with regard to retail properties in pedestrian zones. Here, classic properties on stock are an option, as can be real estate with a buying factor of up to twenty annual rents related to purchase price.

The company concentrates on investments with a volume between approx. EUR 10m to EUR 35m. “In individual cases, we can and will push our limits a bit upwards or downwards,” explains Marc Ludwig.