Since leaving the legal profession back in 2008, Marcus Schulz has worked in various part of the real estate industry, but he was always headquartered in Prague. That changed last summer, when he was recruited by the German real estate investment fund manager DLE to become CEO of its new Polish venture. Schulz says it was a difficult decision to leave his position at the time (he was working on Karel Komarek’s portfolio), but ultimately DLE’s offer proved too attractive to refuse. All of which meant he was suddenly in charge of setting up the structures necessary for the company to replicate its successful German business model in CEE’s largest and most dynamic market.
DLE’s approach isn’t complicated: it buys zoned land without building permits for cash, then sells it to developers with permits in appropriately sized plots. “We make the plots bankable for developers,” says Schulz. “Our business is essentially an interest arbitrage from pure mezzanine capital, which is the only capital you could get for such an acquisition to bankable. It used to be an even larger difference between the two, but it’s still quite a big difference.
DLE’s first fund was set up in 2016 but it focused mostly on Berlin, Schulz says it quickly became clear that developers around the country needed the product. Today, the company has more than €3 billion in land under management. “It was a small-scale idea in the beginning focused on Berlin which then gained a lot of momentum,” he says.
The company’s ambitions are what brought Schulz into the picture. DLE noticed that developers like CA Immo were able to issue agency-rated bonds for Polish office buildings. A plan to try the DLE business in Poland emerged and the company eventually reached out to Schulz to run a new business.
It wasn’t an accidental choice. Schulz was one of the original team members at Accolade when that fund was basically just five guys in a small Prague office and less than €10 million in AUM. “When I left it was around €250 million. It was the greatest work experience for me, I’d recommend it to anyone.”
In Poland, he says DLE isn’t exactly welcomed by some of the larger developers. They’re happy with the existing set-up. Thanks to their size and reputation, they can sign options for land today but pay out years later when they’re ready to build. “Many landowners are not happy with the option system anymore,” he says. “They want cash. We’re catering to that need, so we’re kind of attacking the existing system which is in place here.”
He claims this benefits smaller developers. “We can give them wings because we can provide them with land. So, they can do three projects instead of just one.” The fund traditionally focuses on residential land, but in part thanks to his own expertise, Schulz says he can target a certain amount of industrial land as well.
What’s changed in recent weeks for him is that in addition to running the Polish operations, he’s taken on the additional challenge of leading the group’s capital raising efforts in EMEA. It’s a remarkable promotion for Schulz, having joined the company so recently. But he says that his responsibilities for the Polish market remain unchanged.
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