Press release

 

TERRAGON and SAX announce joint venture for investments in serviced housing

Dr. Michael Held

Chairman of the
Executive Management Board of TERRAGON AG

Friedrichstr. 185 – 190
10117 Berlin
Tel.: +49 (0) 30 - 20 3799 0
E-Mail: d.tempel(at)terragon-gmbh.de

 

Jaroslaw Plewinski

PB3C GmbH
Rankestr. 17
10789 Berlin         
Tel.: +49 (0) 30 - 72 62 76 160
E-Mail: plewinski(at)pb3c.com 

 

SAX Gruppe

Wilhelmstrasse 60
72074 Tübingen
Tel.: 07071 68886-33
Karin.Holzaepfel(at)sax-gruppe.de

 

Berlin, 27 September 2018 – TERRAGON AG partnered with SAX Gruppe at the end of September 2018 to launch a joint venture that will invest between EUR 500 and EUR 600 million in premium segment, serviced accommodation for senior citizens over the next three to five years. The leased properties are then to be placed with institutional investors and family offices via a fund yet to be established, with both partners wishing to remain on board as long-term portfolio holders.

 

TERRAGON AG will provide project development and construction management services, as well as being responsible for commissioning care and operational service providers. SAX will handle the joint venture’s financial and commercial management aspects.

TERRAGON AG, together with its subsidiaries, is one of Germany’s leading property developers in the senior housing segment and has developed more than 2,000 serviced housing units across Germany since 2001.

SAX Gruppe, a real estate investor with strong links to family businesses and family offices, has not only financed large numbers of real estate developments, but also has extensive expertise in project implementation, especially in the micro-apartment and serviced apartment segments.

The joint venture’s unrivalled knowledge of the market knowledge is based on TERRAGON’s proprietary database of assisted living facilities in all German municipalities with more than 5,000 inhabitants, combined with the senior citizens’ income and wealth database created by empirica for TERRAGON. Currently, 94% of German municipalities are undersupplied with senior housing. In particular, Germany’s middle-class retirees, who have the means to pay for senior housing from their disposable incomes and assets, are unable to find suitable offers that correspond to their expectations and financial resources in the areas where they already live.

The joint venture will develop residential complexes in Germany’s large and medium-sized cities. Each complex will comprise 150 to 200 apartments and will offer a high level of comfort and first-class services in combination with out-patient, day and inpatient nursing care. For these developments, the joint venture will acquire building plots with gross floor areas of approximately 15,000 sq m in very good and good residential areas with well-established infrastructures and local amenities.

In six construction projects from Munich to Hamburg, TERRAGON currently has 650 apartments and more than 200 inpatient care places either under construction or in the pipeline. The largest of these projects is the REGATTASTRASSE development in Berlin-Grünau, which was launched in partnership with SAX Gruppe in 2017 and will create more than 200 age-appropriate apartments and provide a wide range of day-care nursing services. This project alone has an investment volume of almost EUR 90 million.

Bernd Ruck, SAX Gruppe: “Both SAX Gruppe and our partners have been convinced by TERRAGON’s strategy and the market segment’s immense growth potential. With our financial strength and expertise in project implementation, we are sure we can support the joint venture in achieving its objectives”.

Dr. Michael Held, TERRAGON AG: “This joint venture represents a key milestone in our strategy to reshape the housing market for Germany’s senior citizens. Other countries have already made greater progress than Germany, as a glance at the markets in France and the United States demonstrates. To begin with, our focus will be on the market segment that offers the greatest investment potential”.

On behalf of the SAX Group, PwC Legal AG advised on the discussions. TERRAGON was advised by Gehrke Zumbroich & Partner and advised strategically by M.M. Warburg & CO.

 

About TERRAGON

TERRAGON AG is based in Berlin and is a leading developer of barrier-free residential complexes, high-quality senior living facilities and modern nursing homes in all regions of Germany. TERRAGON was founded in 1994 by Dr. Michael Held, who continues to serve as the Chairman of the company’s Executive Management Board. TERRAGON specialises in project development, project management, residential construction and sales.

 

SAX Group

Founded in 1994, the SAX Group is an independent, family-run company co-investing in real estate projects in Germany. Together with renowned German entrepreneur families, SAX provides the necessary capital for real estate projects and supports its project partners with comprehensive expertise in the realisation of their projects. The project volume managed by SAX amounts to more than € 500 million.