REAL ESTATE – DIFA, a German provider of open-ended real estate funds, has announced plans to sell more than €1bn worth of German commercial properties held by its funds.
DIFA said it had already hired Atisreal, the real estate consultancy arm of France’s BNP Paribas, to advise it on the sale of the properties.
"Even after the 40 properties are sold, our funds will still have more than 80 German properties worth €5.3bn. This means that the German market will remain the most important for our funds," a spokesman for DIFA said.
At last count, DIFA was Germany’s leading provider of open-ended real estate funds, with €12.7bn invested in the products. Like its peers – including Deka, Deutsche Bank’s DB Real Estate and Commerzbank’s CGI – DIFA has been cutting the German exposure of it funds while raising their European exposure.
The motivation for the restructuring has been twofold. On the one hand, the fund providers want to offload non-performing commercial properties in Germany. On the other, they hope to boost fund returns by investing more heavily in European commercial property.
The restructuring has been facilitated by the huge appetite for German properties among foreign investors, in particular private equity houses, including Fortress, Cerebus and Terra Firma.
In DIFA’s case, the planned divestment of the 40 properties comes just a few months after it sold €670m worth of German properties to US real estate firm Tishman Speyer. Meanwhile, it earlier this month paid €72m to acquire a commercial property in the Netherlands.
In other transaction news, Gagfah, the quoted German real estate firm tied to Fortress, said last week that it had acquired almost 6000 flats in Berlin for €370m. The deal means that Gagfah now owns around 165,000 flats across Germany.
Separately, a new study from DEGI, another German property fund provider, reflects that in terms of real estate transaction volume, 2006 was a record year for the German market.
According to the DEGI study, €46.1bn worth of German properties were bought and sold last year, with retail properties accounting for the largest share of this volume (33%). Office properties came in second (25.9% of volume), followed by mixed use units (21.3%) and flats (10.9%).
DEGI, a unit of Allianz Global Investors, also said that of the €46.1bn in transaction volume, 37% came from German investors, 25.5% from other European investors almost 23% from North American ones.