KKR (NYSE: KKR) announced it wants to increase its share of the growing German property market to the tune of ($5.9 billion) in the next five years. The U.S.-based private equity firm intends to partner with real estate developer Deutsch Immoblien Chancen to create a new subsidiary. It will be called the German Estate Group AG (GEG), and it will focus on commercial real estate.  Initially KKR will own about 25% of GEG but will eventually increase its stake to 50%.

Said KKR’s Global Head Real Estate, Ralph F. Rosenberg: “With this new platform, we will be able to accelerate our access to investments in Germany.”  

KKR is a holding in Global Income Edge’s Aggressive Portfolio. 

Although Germany is Europe’s largest economy, its real estate sector has lagged other euro zone countries for years. After five consecutive years of steady growth, this year may be its breakout year. Just last year, about $59 billion worth of property was exchanged in Germany.

Roughly $47.2 billion or 80% of this activity involved commercial real estate space which saw an increase of 33% last year. KKR is betting on even more growth in 2015 as the German market benefits from continued record-low interest rates and increasing foreign interest—especially institutional investors in Asia and America.

KKR first entered the German market in 1999 and the company has invested over $4.4 billion into 15 German companies over the years. KKR launched its real estate segment in 2011 and has since invested about $1.6 billion into 26 transactions in Asia, Europe and the U.S.