Investment fund volume of LEADING CITIES INVEST exceeds 1 billion euros

  • Constant growth confirms investment fund concept, sustainably positive performance, strength of innovation and trust of investors 
  • Locations, types of use and sustainability strategy are key elements of the investment policy

KanAm Grund Group reports an investment fund volume of EUR 1.004 billion1 for the LEADING CITIES INVEST (ISIN: DE0006791825). The open-ended retail real estate fund has exceeded the one billion euro mark. Since its inception on July 15, 2013, the investment fund has achieved an aggregate performance of 29 percent and shown a low level of volatility of 0.8 percent.¹  The one-year performance until August 31, 2022 is 2.2 percent p.a.²  Since the beginning of August, the LEADING CITIES INVEST also meets the requirements of the Markets in Financial Instruments Directive II (MiFID II) regarding client sustainability preferences. Target group are retail investors with a medium to long investment horizon. 

Olivier Catusse, Managing Partner at KanAm Grund Group said: “The positive fund volume development of the LEADING CITIES INVEST confirms our investment policy and the trust our investors place in our strategy. The properties included in the portfolio – with a focus on office and logistics real estate – are spread across Europe and the United States. The proportion of crisis-proof public-sector tenants with a very low rental default risk currently exceeds 36 percent. Moreover, graduated contracts and index-linked rental agreements provide a certain level of inflation protection.“    

Hans-Joachim Kleinert, founding partner of KanAm Grund Group, added: “Since our establishment 22 years ago we have played a pioneering role in many aspects. We were, for instance, the first private – and thus independent – real estate asset management company in Germany. And we have developed the Cash Call Strategy in order to manage capital inflows to a large extent in such a way that funds are available when there is a property to be acquired. The LEADING CITIES INVEST was the first open-ended retail real estate fund to be launched under the regulatory provisions of the German Investment Code (Kapitalanlagegesetzbuch – KAGB). 
The LEADING CITIES INVEST’s fund volume of more than EUR 1 billion, achieved via cash call steering, is another proof of the success of our strategy and our innovative strength.”

Locations, usage types, tenants and rental contracts are key elements of the investment policy     
In line with its name, the LEADING CITIES INVEST invests in commercial real estate in leading cities and thus in properties located in promising and economically strong cities, such as Hamburg, Paris, London and Barcelona. The real estate portfolio of the open-ended retail real estate fund currently includes 41 properties at 27 locations in eleven countries. The focus is on office real estate (approx. 76 percent). Other usage types are added for the purpose of diversification, as for example logistics properties (approx. 8 percent) and retail and catering buildings (approx. 6 percent). Besides the location and type of use, the financial standing of tenants and the duration of contractual agreements are major points of relevance for the fund’s investment policy. The properties included in the portfolio are almost all rented to creditworthy tenants and on a long-term rental basis. 

The LEADING CITIES INVEST was awarded an ‘aAIF’ rating by the well-known rating agency Scope in June 2022. With this rating the investment fund remains within the highest grade of commercial funds for retail investors and is one of the highest-rated real estate portfolios. In addition, KanAm Grund Group won the award as best asset manager in the Retail Real Estate Europe category in 2021. In particular the strengths of the LEADING CITIES INVEST fund during the Covid-19 crisis were emphasized. 

Investment funds pursue high sustainability standards    
The LEADING CITIES INVEST fund fulfills the requirements of Article 8 of the EU Sustainable Finance Disclosure Regulation (SFDR) in order to support the targets of the Paris Agreement on Climate Change. The focus is on the ESG (Environmental, Social and Governance) characteristics ‘Environmental’ and ‘Governance’. As of August 2022, the strategic approach has also taken account of a possible adverse impact of investment decisions on specific sustainability factors (Principal Adverse Impacts – PAI), and thus meets the requirements of the Markets in Financial Instruments Directive II (MiFID II) regarding client sustainability preferences. Measurements and assessments in relation to the LEADING CITIES INVEST are based on the sustainability indicators ‘fossil fuel’, ‘energy-inefficient real estate assets’ and ‘intensity of energy consumption.’ Currently, there are 22 properties in the portfolio of the LEADING CITIES INVEST, worth around EUR 937 million, that are certified or in the process of certification. 
This corresponds to a certification rate of around 78 percent of the investment fund’s total real estate assets.

In-house research, portofolio and ESG models ensure a high level of data quality for the selection of locations, properties and sustainability aspects      
To select promising real estate markets and individual properties, the KanAm Grund Group applies its in-house research and portfolio models C-Score and PropertySelectionModel (PSM). Both models are based on one another, and ensure central delivery of reliable data for the selection of leading cities and core and core plus properties in these places. 

In order to comply with the high sustainability requirements on real estate, in 2021, the Sustainability & Analysis team of KanAm Grund Group furthermore developed an ESG scoring model. It enables a quantitative assessment of properties from a sustainability viewpoint. The tool can be used to compare existing and purchased properties, and to plan their environmental development. The ESG score of a property is calculated on the basis of eight parameters and various associated sub-parameters (CO2 emissions and decarbonization pathway, availability of energy data, energy certificate, energy audit, smart metering systems, environmental risks, site assessment and building certification).



¹Situation as at August 31, 2022
² Data for period 31.08.2021 to 31.08.2022
Calculation according to the method of the German investment funds association BVI: calculation basis: unit value; distribution is reinvested. Costs borne by the investor, such as loading charge, transaction costs, securities account and other custody fees, commissions, other charges and fees are not taken into account. Note: this media release does not provide any investment, tax or legal advice. The estimates and forecasts contained in this email are based on meticulous research. However, KanAm Grund Kapitalverwaltungsgesellschaft mbH cannot provide any guarantee as to their correctness. Tax-related information is based on the current legal situation. Taxation depends on the personal situation of the investor and may change in future. Past performance of the fund assets is no guarantee for future growth. For the purchase of LEADING CITIES INVEST units only the current annual and half-yearly reports, the sales prospectus with the contractual terms and the key investor document (KID) are relevant. These documents can be obtained free of charge from KanAm Grund Kapitalverwaltungsgesellschaft mbH, the depositary M.M.Warburg & CO (AG & Co.) KGaA in Hamburg, Germany, or any of our distribution partners.

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