Germany’s residential property sector continues to attract capital, with Foncière des Régions looking to take control of Danish firm, Berlin IV.

The move by the French REIT’s German Immeo subsidiary for the Copenhagen-listed housing specialist is the latest example of the hunt for units – and, crucially, rental income.

Berlin-based Deutsche Wohnen recently dropped its bid to acquire residential property rival LEG Immobilien in a deal that would have created a €17bn ($18.6bn) real estate portfolio.

LEG had recommended the merger to shareholders last month

Rival Vonovia, formerly Deutsche Annington, is now expected to make an offer for LEG, which owns 110,000 rented residential assets.

Earlier this yearPatrizia Immobilien took over a real estate fund with €900m of residential assets – of which 5,000 units were in Berlin.

At the end of March, 5,750 residential units in Berlin changed hands when Deutsche Wohnen sold a portfolio to ADO for €375m.

Deutsche Annington’s takeover of Gagfah late last year created a €21bn portfolio of around 350,000 residential units.

For Foncière des Régions, its ongoing move for Berlin IV could add 2,735 central Berlin units and €16m in rental income to its portfolio.

Foncière des Régions, active in Germany’s increasingly popular residential sector since 2005, said the Berlin IV portfolio, worth €348m, held “great value-creating potential” in one of the “most dynamic German cities in terms of demographic prospects and purchasing power”.

If Foncière des Régions’s Immeo gets further than Deutsche Wohnen in its respective move, then a gradual sale of some assets is likely. 

More than 30% of the Berlin IV portfolio would be gradually sold from 2017. 

The move follows Immeo’s €240m deal last year to buy a portfolio of 3,400 residential units in Berlin and Dresden that generates €15m in annual rents.