Cordea expands in Germany with IPAM buy and KAG plan

Acquisition of local manager doubles German assets managed to €1bn

Cordea Savills is building up its German business by setting up a regulated investment manager, or KAG, and buying a local asset manager.

The purchase of International Property Asset Management adds offices in Dusseldorf, Stuttgart and Hamburg to Cordea Savills’ Munich presence and almost doubles its assets under management to €1bn.

IPAM’s clients include Buccleuch Property, David Samuel Properties and JER Partners, as well as work-out mandates with German banks.

Cordea Savills’ chief executive  Justin O’Connor said: “Successful investing is no longer about buying and trading; it is about stabilising and improving income. You have to have scale and good people on the ground, or you won’t get offered stock.”

IPAM has 15 asset managers and was owned by Thomas Lutz, Axel Fröse and Bruce Jenyon, who become part of the Cordea Savills management team.

“The attraction for them is being part of a bigger, regulated platform with full services,” O’Connor said.

Cordea plans to focus on value- added office and retail strategies in Germany for local investors, instead of trying to raise external capital to invest in Europe’s biggest economy, as it did before.

O’Connor said setting up a KAG was also important because “a lot of German investors, such as savings banks, can only invest via a KAG”.

It will be headed by Hans-Dieter Martin, who joined last year from LB ImmoInvest.

The firm may also invest for German investors via the KAG in the Nordics, where the company has good coverage.

Cordea is just weeks away from a first closing of its Prime London Residential Development Fund, which is targeting 18-20% internal rates of return.

The capital is believed to have come from Asian and Middle Eastern investors.