Germany joins the fibre network investment frenzy

Primevest Capital Partners has acquired a municipal fibre network in the German town of Leichlingen, attracted by the potential for a solid return on investment.

The European investment group revealed that it has bought the fibre-to-the-curb network rolled out by the Leichlingen municipality via its Primevest Communication Infrastructure Fund (PCIF). The fund did not disclose the value of the deal.

It plans to upgrade the network to fibre-to-the-home (FTTH), albeit with the caveat that this depends “upon sufficient consumer’s demand.”

It’s clearly not a huge deal. Although PCIF did not share figures as such, it noted that the inclusion of the Leichlingen network takes its total investments to €75 million. But it serves as a further indication of just how attractive telecoms infrastructure assets are to the investment community.

Indeed, as Klaus Leckelt, project manager at Primevest Capital Partners, pointed out: “We are a Dutch-German company, backed by responsible institutional investors such as pension funds, which focus on sustainable long-term returns and partnerships.”

The fund focuses on passive infrastructure, such as fibre access networks, mobile towers and data centres. It was founded in 2017, making it still early days. It has a target investment volume of €600 million and is open to new investors until the second quarter of next year.

With demand for infrastructure investments not looking like abating any time soon, that doesn’t seem like an overly ambitious target. But in the meantime, back to Leichlingen.

PCIF said it will lease the new FTTH connections, to be rolled out by GFS, to its telco operating partners, including Novanetz and NetCologne.

The FTTH upgrade is already under way in the small town of Witzhelden, to the east of  Leichlingen, where the first customers have already been connected, as well as in various others districts, with more to follow before the end of the year, and later, the inner city areas of Leichlingen.

“By selling the existing network, we are facilitating the expansion of future-proof broadband connections without burdening the city’s own financial resources. This deal makes us one of the pioneers in the delivery of the latest generation of fibre-optic cables in North Rhine-Westphalia,” said Frank Steffes, Mayor of Leichlingen.

So there you have it. If FTTH rollout is proving a bit too costly, get an investment group to do it for you. They are champing at the bit to put money into infrastructure assets.