Westend Real Assets: Niche assets and regional data centres

CRE Media Europe caught up at EXPO REAL with Patrick Brinker, chairman of the Management Board at Westend Real Assets, who shared a frank assessment of the German market, the structural shift toward non-cyclical niche assets, and why regional data centres represent the next major investment frontier.

Patrick Brinker

Brinker pointed out that transaction activity on the CRE market in Germany has ground to a near-complete halt. "There are no major transactions—only small pieces. Buyers right now are mostly family offices; institutional capital is largely sitting on the sidelines."

A valuation gap remains between reported fund values and actual market prices—a gap he expects to widen in the coming months.

As short-term refinancing extensions reach maturity over the next year, distressed owners will be forced to sell, finally establishing realistic market clearing prices.

German institutional investors continue to avoid contrarian strategies. As Brinker noted: "German institutional clients don't seem to know the word 'anti-cyclical."

Traditional sectors face severe headwinds. Upgrading a 30- to 40-year-old office asset to meet modern ESG requirements demands massive capital expenditure compared to lighter-spec asset classes. Meanwhile, sectors like logistics have seen multipliers collapse from peak levels of 30x down to ~17x.

Focus on non-cyclical essentials

To navigate current volatility, Westend Real Assets focuses strictly on stable, resilient real estate strategies backed by essential human and economic needs.

Food retail has stable footfall and low volatility, with consistent cash flows.

Healthcare and medical centres stand out for fully inflation-linked leases, highly creditworthy tenants and secure long-term income, while social infrastructure is governed by long-term public/municipal demand and is insulated from general economic downturns.

Surging local demand for regional data centres is driven by data sovereignty, and Brinker sees the strongest risk-adjusted returns in regional co-location data centres (typically 2 to 10 MW).

Strict focus on Germany

Unlike managers expanding across borders, Westend Real Assets remains 100% dedicated to Germany.

Following its departure from ABN AMRO, Westend Real Assets operates under Westend Bank, backed by the Dietmar Hopp family office/foundation structure. This backing provides access to a corporate portfolio of over 200 companies and extensive real estate synergy.

Looking ahead toward 2027, the firm is considering expanding into residential real estate.

Branislav Pekic