Real Estate

Investing in substance is the best protection against inflation and wealth deterioration

Key Beliefs

Real estate investments offering still attractive opportunities despite increasing interest rates.

1

Real estate as asset class still one of the best protection against inflation and wealth deterioration.

2

Key driver for real estate value creation still in tact, e.g. demand for living space per capita, number of single households growing.

3

The higher the inflation, the more the residual debt is devalued. Repayment and interest payments are not adjusted for inflation.

4

Significant positive tax benefits as the financing costs are deductible. This means tax base is reduced by the interest payments.

5

Real estate as asset class are less dependent on economic cycles than shares, or many other asset classes – only investments in valuable and tangible asset class.

6

Easy to pass on wealth – it can be passed on easily to the next generation. This is a key benefit for many investors.

Investment Strategy

PANDAI Capital has developed a transparent investment strategy for its investments.

1

Regional Focus

PANDAI Capital focuses on few selective, and relatively undervalued markets.

Primary Focus: Germany (Cologne, Munich, incl. Bavarian Pre-Alpes/leisure)

Opportunistically: France (Paris, Southern France/Leisure), Italy (Milan, Lake Como)

2

Type of Assets
PANDAI Capital focuses only on existing properties, no new construction projects.
Primary Focus: ‘Jugendstil’ properties, Art Nouveau, Liberty Style, Traditional style
Specific characteristics: Buildings that require modernization & refurbishment, ‘undermanaged’ properties with good potential to increase rent, in need for energetic upgrade

3

Microlocation
AAA, City Center/ Downtown, on a street-by-street pick

4

Real Estate type
Residential, Retail, Office, Hybrid

5

Risk Classes
Core+, Value Add and Opportunistic

6

Transaction volume
€5-15m, up to €30m for co-investments

Value add approach

PANDAI Capital shares a specific value creation investment approach. We are focusing on small to mid-sized assets where operational expertise is needed to accelerate impact and drive earnings. We apply two approaches:

Core + Strategy
Our Core + strategy focuses on well stabilized real estate with a long investment horizon and moderate leverage. We aim to unlock additional value through focused asset management. The Core + strategy is a long term conservative wealth preservation strategy tailored for investors or those who prioritize income stability and preservation of capital.
Value add and opportunistic strategy
Our value add and opportunistic strategy means to acquire undermanaged, top-located assets in undervalued markets. Post-acquisition, we invest in the properties to improve the quality and improve the energy efficiency of the building. In parallel we start to proactively manage the underlying properties and ultimately maximize their value by instituting best-in-class management. After these measures we can sell the assets and returning capital and interest to our limited partners. Value add and opportunistic investments are typically made with as much debt as a bank will allow. The opportunistic strategy is tends to be a good fit for investors with a higher risk/return appetite and those who seek both cash flow and growth. 
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