Cresco Capital Group accelerates investment activity by launching first German real estate development fund

August 8, 2016

  • First close of Cresco Capital Group Fund 1 LP at EUR 110 million after only six months of fundraising with its JV partner and cornerstone investor LJ Partnership
  • Cresco continues to invest in project developments in major German cities
  • Focus remains on micro apartments as well as opportunistic investments in other property asset classes

Berlin/Luxembourg/London, July 26, 2016 – Cresco Capital Group (Cresco), an owner-managed integrated real estate investor and developer, today announced the first close of its first fund. After just six months of fundraising, Cresco Capital Group Fund 1 LP (CCG Fund 1) has raised capital commitments of EUR 110 million from large European and Asian family offices. Multi family office, LJ Partnership has partnered with Cresco to support its activities in Germany and is a cornerstone investor in the new fund.

This successful fundraising underscores Cresco’s position as one of Europe’s fastest growing real estate platforms, with a dedicated focus on the attractive micro apartment segment and opportunistic investments in other property areas.

The first close of its maiden fund marks a milestone for Cresco. Daniel Schuldig, Co-Managing Partner, said: “The fundraising has proved a big success and we expect to close the fund by the end of this year with capital commitments totaling EUR 200 million. Our investment pipeline is very active and going forward the fund will enable us to invest in projects even more quickly and flexibly, allowing us to develop market leadership for our micro apartment platform.”

The fund’s investment focus will be on all major German cities as well as attractive university cities. Additionally, Cresco plans to continue to invest opportunistically in other property areas.

Alexander Bürk, Co-Managing Partner, outlined: “We have significant and varied experience in project development, as well as in the creation of design-led concepts. In addition to micro apartments, we will also continue to evaluate targeted investment opportunities in other areas, particularly properties that are suitable for hotel developments.”

Over the past ten years, Cresco has invested more than EUR 700 million in properties across Germany, including hotel developments (e.g. Soho House in Berlin), retail properties, offices, and high-quality residential estates.

In 2013, Cresco teamed up with LJ Partnership to create Cresco Urban Yurt, a real estate platform that is focused on the development and operation of micro apartments. This accommodation is primarily aimed at students and is currently enjoying a high level of demand in German major cities and university towns. Since, then and in addition to the fund, LJ Partnership’s clients and shareholders have committed EUR 100 million in equity capital to ongoing developments.

Andrew Williams, CEO of LJ Partnership, said: “The successful first close of the Cresco Capital Group Fund 1 LP is indicative of strong investor confidence in both Cresco and the real estate segments on which it focuses. We consider the micro apartment segment to be particularly attractive given the growing demand for this type of accommodation in Germany and we look forward to working in partnership with Cresco on many more projects in the future.”

First investment: Cresco’s new fund acquires property in Frankfurt for the development of micro apartments

Cresco Capital Group Fund 1 LP has made its first investment, acquiring a 12,000sqm. property close to the university campus Riedberg in Frankfurt am Main. This includes a fully let office building as well as land reserves for new The Fund plans to develop around 250 micro apartments for students and 1,300 sqm. of retail spaces. The project with a total investment volume of EUR 40 million is expected to be completed by the third quarter of 2017.

The demand for micro apartments remains at a high level across all major German cities. Students represent one of the key target tenant groups for micro apartments, with university education continuing to be popular amongst both German and foreign students. Over the past ten years, the number of university students in Germany has risen from around 2 million in the winter semester 2006/2007 to around 2.8 million in the winter semester 2015/2016.1 with living space in dormitories available for less than ten per cent. Additionally, residential real estate is a rare commodity in inner city locations close to university campuses and in many cases apartments are not customized for the requirements of students. Beyond the needs of students, demand for attractive but small living space is rising consistently in today’s increasingly mobile society.

1 Statista: Number of students attending German universities in the winter semesters 2002/2003 to 2015/2016.

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About Cresco Capital Group

Cresco Capital Group (Cresco) is an owner-managed integrated real estate investor and developer with significant experience across asset classes, including hotels, retail and high-quality residential properties as well as attractive micro apartment estates. The company has invested more than EUR 700 million in the development of properties across Germany, including the Soho House hotel in Berlin. Cresco has historically invested through single asset special purpose vehicles, but has now raised its first fund, Cresco Capital Group Fund 1 LP, which at first close in July 2016 has raised EUR 110 million in capital commitments. Cresco has offices in Berlin, London, Luxemburg and Guernsey. London-based Cresco Capital Advisers acts as investment adviser to CCG Fund 1. www.crescocapitalgroup.de

About Cresco Urban Yurt

Cresco Urban Yurt was founded in 2013 by Cresco Capital Group together with multi-family-office LJ Partnership, primarily to develop micro apartments for students in major German cities and attractive university cities. Additionally, the company invests in and develops other real estate asset classes. To date, LJ Partnership clients and shareholders have committed EUR 100 million of capital to ongoing developments. www.cuy.lu

About LJ Partnership

LJ Partnership (www.ljpartnership.com) is a leading privately held multifamily office, which operates across the globe. LJ Partnership has a client base of individuals, family offices, foundations and charities.

LJ Partnership employs over 200 staff from eight offices across Europe, US and Asia and has four key divisions: (1) direct investment; (2) investment management (3) trust & fiduciary; and (4) private office services; from eight office locations across Europe, US and Asia. LJ Partnership supervises in excess of $10bn of assets on behalf of over 500 clients composed of individuals, family offices, foundations and charities.

LJ Partnership is an experienced real estate sector investor through its selected managers and currently advises on a property portfolio of approximately $4.5 billion.

Press Contact Cresco Capital Group

Charles Barker Corporate Communications GmbH

Jan Hromadko, Tobias Eberle, Telefon 069 794090-44,

Jan.Hromadko@charlesbarker.de, Tobias.Eberle@charlesbarker.de

Press Contact LJ Partnership

Equity Dynamics PR

Emily Weston

+44 (0)7825 326 442

emily@equitydynamics.co.uk