Despite the extraordinary circumstances in 2020, TSC Real Estate continued to perform well over the last year.
“We were able to overcome the particular challenges faced in 2020 and achieve our principal objectives over the business year”, says Berthold Becker, Managing Director of TSC Real Estate.
Despite the restrictions imposed as a result of the crisis, TSC Real Estate was both active and successful in its acquisition and transaction business.
“Over the course of 2020, we analysed and reviewed some 300 assets with a total value of around EUR3.85 billion and in the end we purchased 14 properties with an aggregate volume of around EUR216 million, despite more difficult conditions relating to due diligence processing”, reports Kristoff Kunst, Vice President Investment Management at TSC Real Estate. “We also managed the sales of seven properties with a volume of around EUR80 million on behalf of two of our clients.
By its own account, TSC Real Estate’s revitalisation and project development programme was hardly impacted by the effects of the pandemic.
“During 2020, we completed a total of four comprehensive revitalisation and refurbishment projects with a total volume of around EUR28.5 million and made significant progress on a further project with a volume of around EUR9.6 million. In the second quarter we also purchased a developed site on the periphery of Leipzig with an area of approximately 7,500 sq m for redevelopment, and commenced the planning of a multi-generational residential campus with complementary healthcare facilities. Construction will not commence before early 2023 because of the unexpired leases relating to the existing uses,” explains Berthold Becker.
According to Becker, TSC Real Estate has managed, in some cases with considerable effort, to protect its approximately EUR1.5 billion of assets under management from risks and to develop the portfolio further with the net addition of around EUR 140 million worth of assets even taking into account the above sales. “Rent arrears in the case of the healthcare properties managed by us average just 0.3 per cent and in the residential properties arrears had risen by a maximum of 5 per cent at worst but then fell again over the course of the year. This speaks volumes about our expertise and specialism in the most crisis-resistant use classes and also the highly motivated and pro-active management team. This level of performance is dependent on highly intensive tenant liaison and close monitoring, which our team has mastered in all respects,” says Becker.
Not least, the company also managed to develop and extend its strategic initiatives. “We conceived a healthcare real estate fund with a focus on German institutional investors and implemented this strategy in partnership with a Hamburg-based investment management company (KVG). Initial capital commitments are already in place and we will commence our acquisition programme in the first quarter of 2021.”
“It is now of paramount importance that we had already digitalised our processes and achieved a highly mobile and flexible working approach well before the pandemic struck and this enabled us to be fully back in business as a company within two days of the start of the first lockdown. We have been able to avoid any possible inefficiencies caused by the effects of the pandemic and have been able to continue with our operational business almost without disruption to our activities. We closed the year 2020 with an increase in turnover of almost 60 per cent and have thus achieved a highly positive outcome.”
The company also has very ambitious plans for 2021, says Becker. “For example we have expanded both our expertise in the operational management of healthcare properties and care facilities and our palette of services. Since January 2021, we now operate an Advisory division to manage all matters relating to structural and procedural and also financial optimisations of the existing healthcare operations and care facilities. Our spectrum of services comprises recurring themes such as succession planning, sales and the provision of interim management services. These services are targeted first and foremost at the various operations and operators in the healthcare and care segment, but also at real estate project developers and investors in their concept development and analyses relating to locations, concepts and operations.”
“This specific and extended expertise in the operational business relating to healthcare and retirement properties enables us to deliver significant added value to our clients and further expand our existing market positioning as the leading asset and investment manager in this segment.”
Becker says that the company’s focus in 2021 is on further specialisation and market penetration, the optimisation of digital and data base-related efficiencies and not least continuing growth. “We are currently experiencing a noticeable increase in investor interest in healthcare and social properties. We believe the pandemic functions as a catalyst in the further establishment of the previously niche asset class ‘care properties’ into an institutional asset class ‘healthcare properties’. We are highly-equipped to leverage this momentum with our expertise and capabilities and to utilise this to seek out new investment products in this segment for the benefit of our clients.”
