German developer P&P Group maps first fund launch

German developer and investment manager P&P Group is considering the launch of its first-ever real estate fund.

The Fürth-based manager, which focuses on value-added development projects and has around €1.4bn in AuM, has held talks with potential partners about the feasibility of developing such a vehicle although there are no concrete plans, Michael Peter, founder and CEO, told REFI.

The strategy would most likely focus on residential assets with value-add potential in Germany. The fund would also have a strong ESG-angle, as Peter thinks this could give the firm a competitive edge over other managers.

He explained that, although recent years have seen a lot of managers launch similar vehicles, a lot of managers lack sufficient experience in redeveloping assets to make them meet strict ESG standards.

In Germany, there are also many financial incentives for ESG developments which should make it easier for the strategy to generate attractive returns.

The fund would be marketed at institutional investors such as pension schemes or banks.

Peter has been CEO of P&P Group for 27 years. The company employs around 100 workers across offices in Fürth, München and Frankfurt. Until now, it has primarily been investing with its own capital or via single mandates from institutional investors and family offices.

The firm recently opened a major value-add project in Fürth. It refurbished and repositioned a 22,000 square metre urban retail centre located on the town’s high street, providing space for around 60 retailers.

The project was primarily financed with the firm’s own capital, although moving forward Peter would like to collaborate more often with third-party investors as this would allow the firm to tackle deals with larger volumes.