Client story

All-round package for investment companies

From property selection and due diligence, asset management including tenancy agreements to communication with operators and tenants: The Asset Management team supports fund companies in managing funds and achieving growth targets. This also applies to the AVANA Health Care Real Estate Fund.

Industry

Health Care

People

Asset Management-, Project & Development Services- and Valuation &Transaction Advisory employees

Spotlight

Six object categories: nursing homes, assisted living, rehabilitation clinics, medical centers, medical care centers

Value

Transaction volume in the health care asset class totaled around EUR 3 billion in Germany in 2018

The idea of professional asset management for funds has emerged in light of JLL's extensive expertise in the popular health care asset category. The significant increase in transaction volumes since 2016 - around 3 billion euros in Germany alone in 2018 - and the expertise on these special properties have led to the search for a suitable joint venture partner.

We have found a partner for a strategically established, long-term cooperation: the Kapitalverwaltungsgesellschaft (KVG) AVANA Invest GmbH, Munich (AVANA). With JLL as an international Asset Manager, the advice and support in the particularly meticulous object selection is guaranteed. The JLL Asset Managers look after the health care real estate in a future-oriented manner and consider scenarios according to needs from both investors and users.

Six object categories for risk spreading

"We combine the extensive fund expertise of AVANA with our holistic Asset Management approach. Investors benefit from the competitive advantage that is necessary in this market segment."

Uwe Dieterich, Team Leader Asset Management Frankfurt a. M., JLL

JLL Asset Management supports professionally in the selection of potential investment objects and acts responsibly when it comes to the examination according to the investment criteria and the risk class of the fund.

A cross-divisional JLL Best Practice project team with designated health care specialists is available to KVG. This health care fund team brings together Asset Management, Project & Development Services (PDS) and Valuation expertise, providing the fund, and not least the fund's investors, with all-round service from a wide range of specialist areas of the JLL world. If the object meets the investment criteria, the PDS team performs technical due diligence and identifies capex capital requirements over the next few years.

Thanks to these successive services, the KVG can concentrate on its original core tasks to make a profit for the fund investors.

"The fungibility of health care real estate has developed dynamically in recent years. In addition, there is a small-scale operator and owner market, which we tap through local networks, contacts and creative management approaches."

Christian Muffel, Deputy Head of Asset Management Germany, JLL

The health care investment category has established itself with comparatively moderate yield compression as a sustainable investment and excellent asset diversification in addition to well-known investment categories in the real estate segment.

However, an Asset Manager capable of managing six health care asset categories is unique. Nursing homes, assisted living, rehabilitation clinics, medical centers, and medical care centers - the KVG can integrate all these diverse object categories into the fund for risk diversification within the health care asset category.

Often these asset classes offer different risk structures and contract terms to diversify the portfolio. The differences range from the different handling of operator and leasing contracts to the specific requirements of the building itself. It is also important to understand the complex revenue side of the operators, the cash flow (EBITDA / EBITDAR) as well as the total return for the fund always in view. The more complex management of these specialty properties with different characteristics is fully guaranteed by JLL Asset Management.

From a joint venture to a trusting cooperation

The cooperation with AVANA Invest GmbH has started quickly and simply: from initial contact to approval by the German Federal Institute for Financial Services Supervision, just three months have passed. The close coordination guarantees a smooth cooperation in the further search for objects. AVANA appreciates the special commitment of the employees at JLL and the quick availability of different expertises from the different specialist areas.

What began as a classic joint venture idea has become a trusting collaboration between AVANA and JLL Asset Management.