Aiming to address the shortfall in the supply of new residential units within Germany, a series of funds will be launched at the end of June 2025 by Standard Land to catalyze construction activity.
The target is to raise up to EUR10 billion (US$11.39 billion) in the next four years via five separate funds focusing on different real estate segments. While the base funds will be conventional, there will be Shariah feeder funds to be offered in the Middle East and Southeast Asia.
“The Abu Dhabi Global Market is assisting us in this venture, especially with Shariah feeder funds. Another important advising partner is the Abu Dhabi office of the Apex Group,” Co-Founder Georges Bou Jaoude shared with IFN Investor.
Georges explained the housing shortfall in Germany was due to a confluence of fiscal factors that began with the COVID-19 pandemic – which forced many property projects to be suspended or shelved altogether.
While interest rates were initially slashed to spur economic recovery, inflationary pressures led to rate hikes later – resulting in many property developers falling insolvent from the extra pressure of a drastic, rapid rise in financing costs. A lot of government funding already got redirected to retiring nuclear plants and concerns over the possible spread of the Russia-Ukraine conflict dampened real estate activity.
This economic storm resulted in only about 200,000 homes becoming available from 2001 – including renovated residences. Noting that the national estimate was for around 400,000 new keys annually, Georges calculated that the housing shortfall had reached over a million units currently.
Standard Land has so far secured EUR5.2 billion (US$5.99 billion) in gross development value seed portfolio and has over EUR10 billion acquisition identified in the pipeline. Targeting at least 30% internal rate of return on development and 20% on yielding assets, dual IPOs are planned next year for Standard Land in Frankfurt and Abu Dhabi to unlock liquidity and global visibility.
