REAL ESTATE – DekaBank, a German provider of open-ended property funds, has declined to comment on a news report that its core German fund will soon sell 50 properties for €1bn to either Whitehall, a Goldman Sachs venture or Cerebus, a US private equity firm.
“I can’t and won’t comment on market rumours,” DekaBank spokesman Markus Rosenberg told IPE.
Citing financial sources, Germany’s Börsen-Zeitung said Cerebus would likely emerge as the buyer of the DekaBank properties, codenamed ‘Herkules’. Cerebus also did not comment on the news report.
Whitehall, the other named bidder for Herkules, is a joint venture between US investment bank Goldman Sachs and Rockpoint, a US asset manager.
The Herkules transaction is part of DekaBank’s ongoing restructuring of its core German fund. That restructuring began in earnest last December after the fund was hit by €2bn in investor outflows in the previous two years. These outflows were caused both by a dismal performance of the fund and a scandal that engulfed the former management of DekaBank’s property fund arm.
Once the Herkules deal is sealed, total assets for DekaBank’s core German fund should fall to €3bn from as much as €6bn in 2004. The fund’s last biggest sale was in early June, when it properties in East Germany and Spain were handed over for €690m.
“The current high prices on international real estate, which are largely due to low interest rates, provide us with an excellent opportunity to gradually reduce our exposure to foreign objects and to generate added value for our shareholders,” Reinhardt Gennies, head of DekaBank’s property fund arm, said of the deal.
The revamp of the fund, known as Deka Immobilienfonds, is to be completed by 2009 at the latest. It has cost DekaBank €260m so far.