our asset classes
Real Estate
When it comes to material assets, real estate is the most demanded asset class and therefore particularly important. Whether a professional, semi-professional or private investor, real estate is part of the investment strategy for all investor groups. LHI manages active investment assets of approx. EUR 3 billion in the real estate asset class. The real estate portfolio shows a broad diversification in terms of use.
Not all real estate is suitable for every investor. When choosing an investment in real estate you should rely on an experienced partner. The LHI Group has more than 40 years of experience with real estate and is one of the leading investment and asset managers in Germany.
The goal of each real estate investment is to maintain the value and realise potential increases in value. To achieve this one needs the necessary expertise of the real estate market, a broad network of partners as well as the experience, and the ability to identify potentials and risks at an early stage. All real estate experts are in-house at LHI and can meet all of these important criteria.
Our transaction managers
- develop the investment strategy and control the financial engineering in accordance with the asset and portfolio calculation.
- find suitable properties in line with the defined investment criteria
- manage the due diligence of the selected property.
- prepare the purchase decision for the asset together with our real estate specialists.
- negotiate the purchase agreements considering the results of the legal, tax-related, commercial and technical due diligence
- implement the property into the managed assets
- establish forecasts and run a continuous monitoring to ensure the planned investment performance to be achieved
Our asset managers
- manage and develop the real estate asset with view to yield optimization and the resulting increase in value.
- plan, manage and control all value influencing measures during the utilization phase of the property.
- keep steady contact with the lessees, in particular with anchor lessees, focusing on their satisfaction and on their long-term commitment to the property.
- develop and implement individual asset strategies on the basis of the targets set by the portfolio management .
- are responsible for the quality management for all services rendered by the property and facility management and for the reporting on the property level.
- develop lease concepts; manage and direct the leasing process.
Together, asset managers and transaction managers ensure professional marketing of individual properties.
What type of real estate are we interested in?
Geographically, our focus is on investments in real estate in prime locations in large economic centres. Properties with office, retail and service use with interesting utilisation and yield concepts are our investment core. Investments are also made in residential and mixed-use buildings or in educational properties.
Track record
Number
of investments in the real estate asset class
106
Overall investment funds launched to date in the real estate asset class
approx. EUR 4.9 billion
Overall, LHI has a management portfolio of rental area of
approx. 1.8 million square meters
of which 99.6% is leased.
Breakdown of types of use
References
-
Space: approx. 2,270 sqm
Acquisition: August 2016
Project support and rental management control -
Space: approx. 2,140 sqm
Acquisition: August 2016
Asset management
Project support and rental management control -
Space: approx. 6,290 sqm
Acquisition: July 2017
Repositioning in the market
Rental process control
Selection of service provider after retender -
Space: approx. 2,060 sqm
Acquisition for an individual mandate
Reduction of vacancies
Modernisation of rental spaces
Optimisation of the revenue side -
Space: approx. 800 sqm
Acquisition for an endowment fund
October 2017 -
Space: approx. 1,045 sqm
Acquisition for a special AIF
September 2014
Rental process control
Re-letting of the retail spaces -
Space: approx. 2,590 sqm
Rental and asset management for an individual mandate
July 2015 -
Space: approx. 2,650 sqm
Acquisition for a special AIF December 2012
Lease prolongation of 10 years with the anchor tenant
Sale for a special AIF
September 2017
frequently asked questions
FAQ
For us "Core" to "Value-Added/Manage to Core" locations are interesting. For example, our premium property portfolio is mainly invested in 1a / high-street locations, with high property quality and long-term leases with high tenant credit standing. In the "Core Plus" and "Value-add/Manage to Core" investment strategies, the value is created by active asset management and repositioning of the property.
We mainly invest in commercial properties (office, retail trade and hotels). Mixed use properties often support our diversification approach. Residential properties as investment assets are not excluded. Investments relevant to respective use, together with the structural possibilities of the building, are decisive for our investments.
Value is created through proactive asset and portfolio management. Among others, this includes e. g. renegotiations and a modernisation of the rented spaces leading to an increase in rental income. Further factors in generating value are the expansion of the rentable spaces by a requalification of space reserves, extensions, utilisation of construction reserves and modification of building rights. The revenue side may be optimised by leasing the spaces to tenants with commercial utilization of higher standards, reducing the vacancy rate and performing an active receivables management. The expenditure side may be optimised by an optimisation and reduction of ancillary costs and maintenance costs while maintaining a consistent level of services.
Our investment strategies take into account specific legal requirements (e.g. Investment Management Act KAGB, Investment Tax Law), as well as investment-specific requirements for mixed-risk or risk diversification by diversifying investments in a portfolio with properties in different locations with several tenants or diversified use as well as different contract periods.
Renewables
Renewable energies are investments for our future. The path to ensure the long-term supply of renewable energies is irreversible. Therefore, the expansion and demand for solar parks and wind farms is growing.
According to the Federal Statistical Office, almost 30% of the electricity generated in 2016 was from renewable energies.
Renewable energies are ideal, in particular for investors who have a long-term investment horizon.
Our focus on renewable energies is on photovoltaics and wind-onshore. Perspectively, also other technologies such as water. We deliberately decided to invest only in Euro countries which offer stable legal conditions with regard to feed-in tariffs.
We only work with project partners, who have been reviewed by us through an intensive selection process and meet our high requirements.
The technical management of our parks is carried out jointly with our project partners. We are fully responsible for the commercial management, portfolio management and performance management.
Track record
Number of investments and portfolio structures
in the renewables asset class
14
Overall investment funds launched to date in the renewables asset class
922 million
LHI wind farms
14
LHI solar parks
22
Total investment volume of
EUR 922 million
Total rated output
431 MW/MWp
Aviation
Globally, the aircraft market is still viewed as a growth market. Although the growth in passenger kilometres is slower overall, the demand for passenger and transport equipment remains unbroken. Manufacturers are building their aircraft fleets based on this. This is particularly true for the so-called "narrow bodies"; these are aircraft falling in the size category of an A320/A321 or a Boeing 737 for which there is great demand. Closely linked to the development of the aviation industry is the need for aircraft engines. The forecast growth in the aerospace industry should therefore be reflected in the steadily growing demand for aircraft engines.
Investments in the aviation growth market offer long-term stable cash flows to investors. In addition, investors are taking advantage of the special focus on the growth in the Asian market.
The LHI aviation asset class consists mostly of investments in aircraft turbines, air planes and helicopters.
We have many years of experience in this asset class. We work with recognised aerospace contract partners and have extensive contacts with globally operating and renowned aerospace market players in the aviation industry. This allows us to quickly and sustainably implement investment products in the aviation sector.
Number of active investments in the aviation asset class
13
Overall investment funds launched to date
in the aviation asset class
approx. EUR 1 billion
With theGE 90 115 B,we have the
most powerful engine in the portfolio with a
thrust of 115,000 Newton.
FREQUENTLY ASKED QUESTIONS
FAQ
Base value is the economic base value. The expert's valuation in an open, unregulated and stable market environment with a balanced supply-demand ratio. The base value of an aircraft / turbine is defined by projected historical values.
The soft value is the future purchase price that can be achieved at a lower limit in a normal market. The market is characterised by a higher demand than the supply and therefore negatively affected. This can occur with reduced air traffic, lower transactions on the market or with new technologies.
Market value is the value of the market. The appraiser's assessment of a probable purchase price, adjusted to market conditions at the time of the request. It is assumed that the aircraft / turbine is in good condition, the hypothetical sales partners are willing and creditworthy and the sale takes place in an open and unregulated market.
TheCurrent Maintenance Adjusted Market Value is theprobable realisation value. The valuation takes into account current aircraft / turbine conditions, such as, for example, hours (flight hours) cycles (take-offs and landings) and maintenance as well as the current market.
Maintenance reserves are the maintenance reserves, also known as rental surcharge. These are the amounts collected during the lease term in order to cover the costs of maintenance.
Full life refers to the operating state of an aircraft or a turbine that corresponds to zero hours of flight. A contract with the return in full-life condition stipulates that in cases where worn parts are not replaced or fundamentally overhauled, financial compensation payments must be made.
The IATA "International Air Transport Association" is an international association of the aviation industry, which represents 240 airlines with over 84% of the total air-traffic volume.
ISTAT is the "International Society of Transport Aircraft Trading". This international association of transport aircraft trade with over 4,000 members of various airlines, aircraft/engine manufacturers, etc. is the central coordinator of certification requirements, issuing of guidelines and standards, and also provides a platform for information exchange.
LLP's "Life Limited Parts" are the wear parts of an aircraft or engine.
Narrow-bodies are small narrow-body aircraft, as a rule small-haul or medium-haul aircraft with a series of gears, e.g. A320 or Boeing 737.
Wide-bodies are wide-body aircraft, as a rule long-haul aircraft with more than one gear such as Boeing 777 or the A380.