Property Overview:
Former office and warehouse building
Land plot: 513 m²
Total residential area after redevelopment: 500 m²
Complete building renovation
Energy efficiency standard: KfW55
Construction period: 12 months
Project completion reserve: 6 months
Following redevelopment, the property will comprise:
18 student apartments
4 short-term rental apartments (Ferienwohnungen)
Investment Options:
Option 1. Acquisition of the Development Project
Transaction structure:
Share Deal or Asset Deal
Acquisition price:
€1,490,000
Financial Overview:
Construction budget: €900,000–1,000,000
Total project budget: approximately €2,400,000
KfW55 government subsidy: €270,000
Effective project cost after subsidy: approximately €2,130,000
Projected annual rental income: approximately €200,000
Price-to-Rent ratio: 10.65
Option 2. Secured Project Financing:
Investors who prefer not to undertake the development themselves may participate by providing secured debt financing.
Scenario 2.1 – First-Ranking Security:
Investment amount:
€1,200,000–1,500,000
Security:
First-ranking mortgage registered in the German Land Register (Grundbuch).
Target return:
15% per annum
Expected income over the investment period:
€270,000–337,500
In the event of borrower default, the property serves as collateral in favour of the investor, providing the highest level of capital protection.
Scenario 2.2 – Second-Ranking Security:
Investment amount:
€800,000
Security:
Second-ranking mortgage registered in the Grundbuch, subordinate to the senior lending bank.
Target return:
15% per annum
Expected income over 18 months:
€180,000
This option offers a lower entry amount while involving a moderately higher level of investment risk.
