AUSTRIA - Constantia private bank is giving up its real estate business and selling to its sister firms, Immofinanz and Immoeast, for €440m.

Immoeast, with currently €11.3bn in assets, will more than double the value of its managed property portfolio as the firm is acquiring 60% of Constantia's real estate business and taking on almost €20bn worth of European property in Europe

The rest will go to the €18.7bn arm of Immofinanz, which is already among the largest real estate companies in Austria.

"The purchase opens new fields of business for Immoeast and Immofinanz," the companies said in a joint statement.

"In future, we will also focus on launching real estate funds for institutional investors," said the parties.

Both Immofinanz and Immoeast will cut personel ties with Constantia group after the purchase, so Karl Petrikovics, director-general of Constantia, will transfer to become director-general at Immoeast and Immofinanz.

Immofinanz was founded in Austria in 1990 and in turn founded Immoeast for its CEE activities in 1999 which is listed on both the Vienna and the Warsaw stock exchange. (See earlier IPE Real story: Austrian Immoeast lists in Warsaw)

The deal, which still has to be approved by both real estate companies' general meetings at the end of July, comprises the following arms of Constantia private bank operating in Austria and the rest of Central Europe:

Real estate asset management with property worth €19.5bn CPB Immobilien KAG: open real estate fund "Constantia Real estate" IMV property management Constantia real estate development: 2007 the project volume was €300m CREDO Real Estate AG: asset manager for institutional real estate funds and developers: 2007 the project volume was €400m CPB Real Estate Trust: broker

Constantia will pool its real estate activities in I&I Real Estate Asset Management AG prior to the sale and this will then be run by Immoeast and Immofinanz as manager for their portfolios.

Approximately 600 employees will move to Immofinanz and Immoeast