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KKR and Velero expand real estate portfolio by 14,400 units

13. January 2022

KKR has acquired around 14,400 residential and commercial real estate units from the Adler Group. Velero will take over the management of the portfolio, which mainly consists of rental apartments.

Most of the approximately 14.400 units are located in high-growth regional markets in which Velero is already active: these include Cottbus, Leipzig, Halle, Erfurt, Jena, Dresden and Chemnitz as well as other cities in eastern Germany, the Berlin catchment area and the federal state of North Rhine-Westphalia. The transaction brings Velero’s managed portfolio to more than 23,000 residential units, making Velero one of the largest private companies in the German residential real estate market (by number of residential units under management).

Jan Baumgart, Managing Director and Head of Real Estate in Germany at KKR, commented:
“The acquisition of this portfolio underscores our ability to capture highly attractive investment opportunities in the German residential real estate market. We look forward to expanding our relationship with Velero and working together to enhance the residential quality of the units, improve energy efficiency, reduce vacancy and drive operational improvements. To achieve these goals, we will invest significantly in the properties.”

Sascha Giest and Thomas Lange, Co-CEOs of Velero, added: “We are very proud to have secured this attractive portfolio together with KKR and with the help of our long-standing network in the German real estate landscape. The transaction is a milestone on Velero’s growth path. The acquired units are a valuable addition to our existing portfolio of managed properties and fit our location strategy. The acquisition of the portfolio will allow us to leverage economies of scale in property management. At the same time, we will ensure a smooth transition and high-quality services for our tenants.”

In addition, Velero will take over all of the approximately 170 Adler employees who manage the acquired portfolio operationally. The tenancy agreements of all tenants in the portfolio will also be taken over unchanged, so that high-quality living space will continue to be offered at affordable prices.