Values Real Estate enters subsidized housing market

Values Real Estate has launched its new Values Impact Living fund, dedicated to subsidized housing, and has already acquired its first project in Heidenheim, Germany, through a forward deal. 

Values Real Estate project

This residential development, already under construction on Kleebühlweg, will feature 61 one-to-five-room apartments across 4,380 m2 of rental space, along with 61 parking spaces. Built to the KfW 40 energy efficiency standard and utilizing timber-hybrid construction, the project aims to provide affordable, barrier-free housing to middle-class tenants with housing permits who are struggling with the current housing shortage. Completion is anticipated in the second quarter of 2026, with Merz Objektbau as the seller and project development partner.
The Values Impact Living fund, a special AIF compliant with Article 9 and a Core risk profile, targets a total volume of €300 mln, including approximately €150 mln in equity. Currently in its placement phase, the fund projects an overall IRR of over 7 percent annually over a ten-year term, with an extension option.
Initial investors include cooperative banks and savings banks. With their equity, along with subsidies from state banks in Baden-Württemberg and Bavaria, and low-interest KfW loans, Values plans to acquire more projects in these southern German states. The company has an investment pipeline for about ten future developments, totaling around 600 apartments, representing around €200 mln in investment.
By combining various federal and state funding programs, Values can offer rents significantly below market rates. 
Thilo Wagner, managing partner of Values Real Estate, said: "Affordable housing is one of the greatest social challenges in Germany. We offer an economically attractive investment product for institutional investors. Furthermore, due to the predominantly serial construction method used in wood-hybrid construction, the use of renewable energies, and the high energy efficiency standard, it has a very strong ESG impact – both socially and ecologically. Values Impact Living is highly taxonomy-compliant." 
Georg Ritgen, head of Transaction at Values Real Estate, added: "We are actively seeking projects with a very high proportion of subsidized housing. For this purpose, we are focusing on locations in southern German cities with more than 30,000 inhabitants that experience a high excess demand for apartments. Well-connected districts of large cities or metropolitan areas are also possible."