REAL ESTATE – Austrian real estate firm CA Immo has confirmed that it is close to purchasing €770m worth of properties owned by the German state of Hesse.

"We are in the final stages of the bidding process," CA Immo said on its website, confirming German press reports to this effect. The reports said Deka, a German real estate fund provider, had also expressed an interest in Hesse’s properties.

The more than 30 properties include police stations as well as office buildings used by tax authorities and other state officials. Hesse is selling the properties as part of a rationalisation effort by its government.

"The public sector has better things to do than invest in and then operate real estate," said Karlheinz Weimar, Hesse’s finance minister. Weimar plans to use the €770m in proceeds for the state’s budget.

The current sale comes a year after Hesse sold 18 properties worth €1bn to a leasing unit of Commerzbank, Germany’s second-largest bank.

Based in Vienna, CA Immo currently owns 166 properties worth €1.27bn, some of which are in central and eastern Europe. CA Immo aims to raise its assets to €5bn in part by making German acquisitions.

Separately, Gagfah, the real estate firm tied to US private equity house Fortress, said it would acquire GBH, a firm based in the city of Heidenheim that owns 9,000 flats in Germany.

Gagfah said it would pay €355m to acquire GBH, which was partially owned by Heidenheim’s government as well as two local savings banks (Sparkassen). Prior to the deal, Gagfah owned and operated 160,000 flats in Germany.

The GBH acquisition is Gagfah’s first since it was floated on the German stock exchange last month by Fortress. Fortress sold a 25% stake in Gagfah, netting between €765m and €855m in proceeds in the process.