Real estate that creates the future

Interview with Lars Krakat, Managing Director of KRE AssetManagement GmbH & Co. KG

Lars Krakat, Managing Director of KRE AssetManagement GmbH & Co. KG
Lars Krakat, Managing Director of KRE AssetManagement GmbH & Co. KG

After years of uninterrupted growth, the real estate market is currently experiencing a significant downturn, especially in residential construction. The first price reductions are becoming apparent. At the same time, downward interest rate steps are expected. KRE AssetManagement GmbH & Co. KG, based in Bamberg, has been acting counter-cyclically since its foundation in 2002. Specialized in the purchase and revitalization of existing grocery markets, company founder and managing director Lars Krakat looks confidently to the future.

"Our core business is the acquisition of food retail markets from existing stock," he explains. "We focus on markets with short residual terms, mostly less than five years. We maintain close communication with the tenants regarding refurbishment, responding to their wishes and needs. After revitalization, we then extend the terms again to 10 or 15 years. Some of the properties we incorporate into our own stock, others we sell."

Sustainable Locations

In addition to the term, KRE pays attention to the sustainability of the location when selecting properties, carefully evaluating the market's potential. "Each project is individual, and each refurbishment has its own challenges," says Lars Krakat. "For a while, it was about deposit systems, then baking stations were the trend. The size of the premises is always an important issue. Currently, operators are dealing with ESG issues."

Sustainability is also at the top of KRE's agenda. All renovations are carried out with the highest possible energy efficiency. The company itself is on the path to becoming a paperless office and is implementing photovoltaics. Its own hotel in Bad Sassendorf is sustainably certified.

"Beyond the food markets, we are also engaged as project developers in hotel and office projects," the managing director explains. "We recently demolished an old brewery in Lohr am Main. The ground floor is occupied by retail, specifically REWE and DM, above which are assisted living apartments. In Bamberg, we developed a property with a B&B hotel, office spaces, and also assisted living."

Portfolio Expansion

KRE is currently planning various new acquisitions. "We are not under purchase pressure, but simply take advantage of the opportunities that come our way," says Lars Krakat. "In the last two years, we have sold large parts of our portfolio, as the market had reached a peak. Now we are rebuilding it – so we are moving counter-cyclically to the market again."

In the long term, Lars Krakat wants to continue developing the company on the current basis solidly and grow organically. "We have always thought and planned for the long term," he explains. "Our core segment, the food markets, for instance, was not affected by the coronavirus pandemic. The markets were open. However, in project development, there were exorbitant price increases and problems with the supply chains. We saw this coming early on and scaled back our project business. The war further exacerbated the situation. Now that market prices are low, it is a good time for acquisitions again."