Real Estate Strategies

Each strategy created by Stoneweg is based on our ability to detect and take advantage of market conditions; first mover advantage within early stage real estate cycles is an important part of how we conduct business.

Ours is a dynamic bottom-up approach to asset selection, leveraging on experienced local Stoneweg teams, with deep networks, who are responsible for sourcing and securing assets as well as managing the entire investment lifecycle through disposal.

Spanish
Developments
 

Sector
Residential (2/3)
Opportunistic (1/3)

Return Strategy
Capital Gain

Target IRR
10-20 %

US Value–add
Residential
Income

Sector
Residential
 

Return Strategy
Value-Add, Income

Target IRR
10-15 %

Real Estate
Bridge
Financing

Sector
Short Term Loans
 

Return Strategy
Income

Target IRR
11-13 %

Swiss RealTech
Commercial
Income

Sector
Commercial

Return Strategy
Value-Add, Income

Target IRR
10-12 %

Italian
Distressed
Situations

Sector
Opportunistic

Return Strategy
Capital Gain

Target IRR
15-25 %

European
Diversified
Opportunities

Sector
Diversified

Return Strategy
Capital Gain, Income

Target IRR
10-15 %

Ireland
Residential
Property

Sector
Residential
 

Return Strategy
Value-Add, Opportunistic

Target IRR
+20 %

Stoneweg
Hospitality
 

Sector
Hospitality
 

Return Strategy
Value-Add

Target IRR
15-20 %

Last-mile
On-demand
Logistics

Sector
Food-Retail
Last-mile Logistics

Return Strategy
Value Add, Income

Target IRR
+15 %

Many Strategies,

One Philosophy

Core Strategies

Italian Distressed Situations

Stoneweg targets portfolios of non-performing loans or assets where seller is in an urgent need of capital restructuring, on a 1st lien basis, focusing on quality assets in distressed situations. Our local team manages judicial and extra-judicial process, restructuring the assets in order to execute pre-defined exit strategies.

  • Sector: Opportunistic
  • Subsector: Direct acquisitions, Non-performing loans
  • Return Strategy: Capital gain
  • Target IRR: 15% – 25%

Since the launch of this strategy in 2015, as at 30 June 2020, Stoneweg has participated into 57 assets, with a total investment of € 1.03 billion. The allocation into distressed assets encompasses income generating assets, residential developments, NPL, bridge financing, as well as the break-up and sale of a substantial real estate complex in the center of Milan.

An example of this strategy: Porta Vittoria

 

Swiss Realtech Commercial Income

Digitalization of the economy is changing consumption patterns in the private and professional spheres, impacting the demand and pricing of for real estate assets. The Realtech strategy focuses on commercial assets at the forefront of these changes.

  • Sector: Commercial
  • Primary Focus: Logistics, Industrial, Healthcare
  • Secondary Focus: Co-working spaces, Sport & Wellness, New Hospitality Format, Entertainment
  • Return Strategy: Income
  • Target IRR: 10% – 12%

Since the launch of the strategy in 2017, as at 30 June 2020, Stoneweg had invested a total of CHF 220 million into several commercial value-add and income opportunities including a healthcare asset. The principal mandate, Varia Swiss Realtech Properties AG, is anticipated to be listed on a Swiss Stock Exchange.

An example of this strategy: The Clock – Satigny (Geneva)

 

Real Estate Bridge Financing

Investment in senior secured short-term loans backed by Real Estate Assets with the largest portfolio in Spain and active in other European countries mainly where Stoneweg has a dedicated presence. Loans have been granted in Spain, Switzerland, France, Italy and Germany.

  • Sector: Short Terms Loans (1 – 3 years)
  • Regions: Barcelona, Madrid, Milan and secondary cities
  • Return Strategy: Income
  • Target IRR: 10% – 13%

Stoneweg has provided bridge financing, backed by real estate assets, across a diverse and wide range of assets in Europe. The original, core, market for this strategy was created through demand from local partners within the Spanish market, where approximately two-thirds of our loans have been granted. Since the launch of this strategy in 2017, as at 30 June 2020, Stoneweg had deployed over seventy loans across Europe to include Italy, France, Germany, Spain and Switzerland, for a total value of € 489.76 million.

An example of this strategy: Byblos

 

US Value–add Residential Income

Multifamily, value-add, residential income strategy, targeting low-to-medium income occupiers. Focusing on Metropolitan Statistical Areas (MSA) and in suburban areas with constrained offer of apartments. The strategy is focused on providing a steady long-term income profile (cash on cash), combined with the opportunity to increase the capital value of the underlying asset through pre-defined improvements works. The asset class benefits from strong tenant demand through the economic cycle based on the needs of upwardly mobile individuals during expansionary phases and the desire to down-size / control costs through economic contractions.

  • Sector: Residential
  • Subsector: Multifamily, Low-to-Medium income
  • Return Strategy: Value-Add, Income
  • Targeted IRR: 10% – 15%, Yield of 6% – 8% pa

As at 30 June 2020, a total of $ 962 million invested over 72 deals, encompassing 10,000 units acquired. The largest mandate, Varia US Properties AG, is listed on the Swiss Stock Exchange (SIX: VARN) since December 2016

An example of this strategy: Rolling Hills

 

Spanish Residential & Opportunistic Developments

Stoneweg leverages local networks to source and secure attractive, unfinished, off-market products. Focus is within key economic centers of Madrid, Barcelona, secondary cities and a complementary interest in the Mediterranean Coast.

  • Sector: Residential (> 2/3) Opportunistic (< 1/3)
  • Regions: Barcelona and Madrid (2/3), Mediterranean Coast (1/3)
  • Return Strategy: Capital gain
  • Targeted IRR: 10% – 20%

Since the launch of the strategy in 2015, as at 31 March 2021, Stoneweg in Spain had invested over € 1.4 billion into development projects. The aim is to target residential developments (2/3) and other opportunistic transactions (1/3).

Example of a mixed asset (BTR & BTS) see Skyline project

Residential Built to Rent (BTR)

Spanish market opportunity to develop a portfolio in the private rental sector (“PRS”) in Spain focusing mainly on Madrid and Barcelona.

Stoneweg is leveraging its track record, knowledge and contact networks to source and secure attractive opportunities for rental purposes mostly via development.

The rental sector is a secular trend across Europe. In Spain there is a strong deficit of appropriate product for rent while demand is dynamic, significant, and increasing. This imbalance creates a very positive outlook for the rental market. Stoneweg will focus on major cities regions: Barcelona, Madrid, and certain secondary cities.

Return strategy: development, stabilization and exit of a sizeable portfolio targeting a gross IRR of 12%-15%.

As an example of our seed portfolio see Mataró

Residential Build to Sell (BTS)

Capital gain strategy aiming at residential build to sell assets. Stoneweg leverages on a local network to source attractive, unfinished, off-market products and build proprietary deal flow. This is a capital gain-oriented strategy, targeting a gross IRR of 15% – 20% per underlying project within 4 to 5 years.

See our residential dedicated website, Stoneweg Living

An example of this strategy: Sagrera

Opportunistic Transactions

Other investment opportunities in Spain commercial real estate market like industrial, hospitality, and office.

Capital gain opportunities targeting gross IRR of 15%-25% per project within a 3-4 year horizon.

An example of this strategy: Pamplona

European Diversified Opportunities

The European real estate market is characterized by considerable diversity in economic, legal, demand and supply drivers, with structural changes in Italy and Spain providing considerable opportunities for investors looking to capitalize in unique buying opportunities. This strategy is based on a diversified portfolio of real estate and real estate backed opportunities across capital gain and income strategies in the Spanish and Italian markets.

  • Sector: Diversified
  • Regions: Initially Spain and Italy
  • Return Strategy: Capital Gain, Income
  • Targeted IRR: 10% – 12%

The principal mandate, Varia Europe Properties AG, was listed on the Bern Exchange (SIX: VARE) in 2018 having invested an initial € 17.1 million into fourteen projects across all Stoneweg strategies. As at 30 June 2020, Varia Europe Properties AG had invest € 41.5 million across selected Stoneweg strategies.

An example of this strategy: Project V

 

Ireland Residential Property

There is significant shortfall of residential property in Republic of Ireland, with supply currently at 46% of the required levels of demand.

The country has seen robust economic growth since 2014, following the collapse of the so-called “Celtic Tiger” with the global financial crisis of 2008. The economic recovery has been driven by strong population increases and significant employment growth in industries such as IT, Pharma and MedTech. This trend is expected to continue for foreseeable future, which augments the current shortage of good quality homes at an affordable price.

Stoneweg’s strategy takes advantage of the structural shortage of residential properties, as well a lack of investors capital for developments in the country. At the same time the Irish Government policies continue to be strong supporters of land development and home building.

  • Sector: Residential
  • Subsectors: Multifamily, Affordable, Land Development
  • Return Strategy: Value-Add, Opportunistic
  • Targeted IRR: +20%

Since the launch of the strategy in 2019, as at 30 June 2020, Stoneweg had invested €10,3 million of equity capital supporting €175,9 million of Gross Development Value. Stoneweg has an office in central Dublin.

An example of this strategy: Cork Street – Dublin

 

Stoneweg Hospitality

Due to the COVID-19 restrictions, the lodging industry is experiencing a significant decline in asset values and in the economic downturn due to constrained availability of debt, yield softening (risk premium) and lower profitability. As a result, Stoneweg anticipates a tremendous and rare opportunity to invest in the hospitality sector with enormous discounts.

Stoneweg’s strategy focuses on large single assets and portfolios with room for business improvement and value proposition through outstanding acquisition, asset management and capex capabilities. It aims at creating a unique portfolio of prime hotel assets in Southern Europe to be upgraded and market repositioned. Typical types of assets are within both Leisure and Corporate, both existing hotels and developments.

  • Sector: Hospitality
  • Subsectors: Leisure, Corporate, Developments
  • Regions: Southern Europe (Spain, Italy, Greece, South of France and Portugal)
  • Return Strategy: Value Add
  • Targeted IRR: 15% – 20%


An example of this strategy: Project Minor (Menorca)

 

Last-mile On-demand Logistics

Digitalization has had a tremendous effect on many aspects of our lives. The Covid-19 crisis further accelerated these changes, generating investment opportunities that didn’t exist only a year ago.

Currently among the fastest growing subclass within the Real Estate industry, last-mile logistics is registering an astonishing growth which is expected to continue in the following years (+78% deliveries’ growth expected through 2030).

Stoneweg is seizing a unique opportunity to invest in the retail and logistics sectors, specifically dark stores, dark kitchens, last-mile on-demand logistics and Q-commerce.

  • Sector: Food-Retail, Last-mile Logistics
  • Subsectors: Dark Stores, Dark Kitchens, Fulfillment Centers
  • Regions: Spain, Italy and Portugal (70%), Eastern Europe (30%)
  • Return Strategy: Value Add with Income Approach
  • Targeted IRR: +15%

As a first step of this strategy, Stoneweg will invest in a unique portfolio of properties in various jurisdictions to be leased out to Glovo for 5 fixed years.

An example of this strategy: Glovo Partnership
You may also have a look at this short documentary about Q-commerce