UBS Asset Management (UBS-AM) Real Estate & Private Markets (REPM) today announced the acquisition of 100% of the shares in Lünecom Kommunikationslösungen GmbH, a fiber-to-the-home (FTTH) provider in rural Northern Germany.

Business Plan – UBS Asset Management, Lünecom

UBS Asset Management’s investment will accelerate the build-out of Lünecom’s fiber optic network to homes and businesses in Germany. Specifically, UBS Asset Management, through Lünecom, will initially invest €160m in order to supply 100k+ additional households with fiber broadband services in rural Germany. Indeed, this equates to an investment of €1.6k per passing.

Additionally, UBS Asset Management notes the potential for an incremental 50k household passings, should the partnership progress as planned. Applying the same €1.6k per passing build cost, would imply a further investment of €80m by UBS-AM into Lünecom. Therefore, UBS Asset Management’s total business plan for Lünecom could reach 150k household passings and €240m of investment.

Target Locations

Geographically, Lünecom highlights Northern Germany as a particular area of focus for its rural fiber roll-out. To this end, Lünecom is headquartered in Lüneburg, Germany, a city located ~27.5 miles (~44 kilometers) southeast of Hamburg, Germany.

Presently, Lünecom is active in the towns of Lüneburg and Uelzen, Germany as well as the state of Schleswig-Holstein, on the North Frisian Islands and Halligen. Furthermore, Lünecom highlights pre-marketing and fiber expansions commencing in the towns of Brechtorf, Eischott, and Nebel (island of Amrum), Germany.

Fiber-to-the-Home (FTTH) Build-Out in Germany – Comparison

As a point of reference, Tele Columbus and Morgan Stanley Infrastructure Partners (MSIP) intend to pass 2.4 million homes in Germany with a €2.0bn fiber network upgrade, equating to €833 per passing. However, Tele Columbus’ premises having the following distinguishing characteristics:

  • Over-Building: Tele Columbus is replacing cable with fiber, which is less expensive than a greenfield build-out
  • Location: passings are in Tele Columbus’ dense urban multi-family footprint, which is less costly than Lünecom’s rural fiber build-out

UBS Asset Management – Fiber-to-the-Home (FTTH) in Germany

In March 2021, UBS Asset Management Real Estate & Private Markets (REPM), through its Infrastructure Debt funds, participated in €73m of debt financing, alongside Kommunalkredit and NIBC, for TNG, a portfolio company of Intermediate Capital Group (ICG).

Notably, TNG is a fiber-to-the-home (FTTH) provider in rural, semi-rural, and urban areas of Germany. Also, similar to Lünecom, TNG’s business plan involves connecting 200k+ homes and businesses with fiber in Germany.

Jonathan Kim covers Fiber for Dgtl Infra, including Zayo Group (private), Cogent Communications (NASDAQ: CCOI), Uniti Group (NASDAQ: UNIT), and Lumen Technologies (NYSE: LUMN). Within Fiber, Jonathan focuses on the sub-sectors of wholesale / dark fiber, enterprise fiber, fiber-to-the-home (FTTH), and subsea cables.

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