Net Zero Properties S.à r.l. (NZP), a portfolio company of ZAGA Capital Partners, reports the successful completion of a comprehensive acquisition of residential properties in North Germany. This transaction, which includes the acquisition of approximately 5,600 residential units, is part of a series of strategic steps that underscore the expansion of NZP's platform. Concurrently, a refinancing and a strengthening of the management team have been completed.
The newly acquired residential property portfolio comprises approximately 5,600 units with a lettable area of 333,000 square metres. The properties are distributed across five clusters in the federal states of Schleswig-Holstein and Lower Saxony. With this acquisition, NZP's total portfolio now reaches over 21,000 residential units in Germany. The gross asset value of the overall portfolio amounts to approximately EUR 2.1 billion, with annual rental income of around EUR 106 million. NZP was advised on this transaction by POELLATH for legal matters, PwC for financial and tax matters, TA Europe for technical matters, and JLL for commercial matters.
This acquisition follows the purchase of an additional 1,010 residential units announced in June. ZAGA Capital Partners is thus pursuing the strategy of utilising market dislocations in the German real estate market to acquire high-quality residential properties in regions with persistent undersupply. ZAGA is currently evaluating further acquisitions from a pipeline with a volume of approximately EUR 3.0 billion. The company aims to expand the platform to over 30,000 residential units by the end of next year.
Strategic Further Development and Portfolio Optimisation
In addition to the acquisitions, NZP has successfully refinanced its private credit financing. The existing mezzanine financing was substituted by unsecured debt at company level. Following this refinancing, the average Loan-to-Value (LTV) across the entire portfolio is approximately 55 percent, implying a strengthening of the balance sheet and a positive impact on cash flow.
As part of organisational development, Mr. Rob Jones, CFA, has been appointed Chief Financial Officer. He joined from CTP N.V., where he served as Head of Investor Relations and PR. Previously, Mr. Jones spent over 15 years as an equity research analyst for various financial institutions, specialising in the European real estate sector, including the German residential property market. His appointment is intended to strengthen NZP's leadership team with additional expertise in finance, capital markets, accounting, and investor relations. The company continues to recruit specialists across the value chain for German residential properties and is increasingly consolidating activities such as asset management, lettings, and property management internally.
Sustainability and Asset Management
The development in asset management of the overall portfolio is positive. Vacancy has been reduced by approximately 160 basis points to around 6.4 percent over the past twelve months. Individual portfolios that have been part of NZP's holdings for more than two years show vacancy rates of 3 percent or less. This reflects the effectiveness of NZP's asset management approach, which supports robust rental growth through targeted investments and upgrade programmes.
As part of NZP's "Manage-to-Green" programme, nearly 10,000 residential units have undergone comprehensive modernisation by September 2026. Measures include, among other things, the installation of heat pumps and AI-driven technologies to reduce CO2 emissions. For 70 percent of the energy upgrades already completed, the newly issued energy performance certificates achieved efficiency class A or B. This strategy aims to develop good quality properties with below-average energy efficiency into future-proof, high-performing buildings in a capital-efficient manner.
Mr. Martin Hofmann, CEO of Net Zero Properties, commented that the acquired portfolio ideally fits the company's strategy, as it involves established North German markets with robust demand and significant potential for energetic transformation. He further emphasised that Mr. Jones' appointment strengthens the leadership team and that the company continues to acquire top talent to achieve its goal of over 30,000 residential units.
