The Empira Group, a vertically integrated real estate investment manager and a Partners Group company, has reported the final closing of its first Transition-to-Green Strategy, T2G I. As part of this closing, equity commitments exceeding EUR 700 million were secured from a group of institutional investors. This milestone underlines the demand for investment strategies that combine value creation in the German residential property sector with the energy-efficient modernisation of existing stock.
The T2G I strategy focuses on acquiring fundamentally sound residential properties in Germany that offer significant potential for modernisation and energy efficiency improvements. Through targeted investments and active asset management, Empira aims to enhance the quality and energy efficiency of the properties. Concurrently, value creation potential from modernisation, rental growth, and repositioning of the properties for the institutional market is to be realised.
Portfolio Development and Operational Objectives
Since the strategy's inception, Empira has built up an extensive portfolio in Germany's largest residential property markets. The current portfolio and the secured T2G I pipeline comprise over 7,200 residential units, spread across 18 transactions, with a gross property value exceeding EUR 1.5 billion. The focus is on metropolitan regions such as Berlin, Hamburg, Cologne, Düsseldorf, Frankfurt, and Munich. Empira anticipates that the strategy will be largely invested by the end of 2026, supported by a secured acquisition pipeline in Germany.
T2G I currently projects a gross IRR of over 20.5% and a projected equity multiple of 1.85x. The business plans envisage an improvement in the portfolio's energy performance from energy efficiency class E to B, which is expected to correspond to an approximate 40% reduction in energy consumption. These objectives are achieved through targeted modernisation measures and active asset management. Modernisation programmes within the T2G I portfolio are already progressing. These include improvements to facades and roofs, the replacement of windows, insulation measures, the modernisation of heating systems, and the renovation of individual residential units.
Institutional Support and Outlook
The final closing includes capital commitments from a diversified group of sophisticated institutional investors from Europe and international markets. This broad investor base signals the growing institutional interest in strategies that address the capital needs for decarbonising and modernising Europe's building stock while also aiming for attractive risk-adjusted returns. Lahcen Knapp, Founder and President of the Board of Directors of the Empira Group, stated that the successful final closing represents an important milestone for Empira and confirms the conviction that a significant portion of the opportunities in the European residential property sector lies in improving the quality and energy efficiency of the existing housing stock. He emphasised that the support of leading institutional investors validates this assessment.
Jorge Veiga Juiz, Global Head of Client Solutions at Empira Group, highlighted that the final closing of T2G I is a confirmation of the strategy by experienced institutional investors. He explained that investors recognised from the outset both the scale of opportunities in Germany's existing housing stock and the potential to combine attractive risk-adjusted returns with a noticeable improvement in property quality and energy efficiency. Following the successful completion and capital allocation of T2G I, Empira is already preparing to scale the strategy through Transition-to-Green II (T2G II). T2G II will follow the same fundamental investment philosophy and target a larger German residential property portfolio.
