Berlin Hyp provides 46% of Buwog's €892m resi deal

German lender Berlin Hyp has provided €414 mln of financing to Austrian-German residential investor Buwog for its €892 mln acquisition of the DGAG portfolio in Germany.

Buwog announced the closing of the DGAG acquisition following antitrust clearance by the German Cartel Office and completion of other condition. The signing of the transaction had already been announced on 12 February 2014.

The seller is Solaia RE, a joint venture between Prelios and an investment fund managed by Deutsche Asset & Wealth Management – Real Estate. Aside from the acquisition of the residential portfolio Buwog will in the short term complete the takeover of the residential asset and property management business of Prelios Germany with approximately 300 employees.

FINANCING
The DGAG portfolio comprises residential 18,000 units spread over 561 properties located in Schleswig-Holstein as well as in the German Federal states of Berlin, Mecklenburg-Western Pomerania and Lower Saxony.

The transaction is being financed through mortgage bank loans provided by Berlin Hyp, the transfer of subsidised loans and the proceeds from Buwog's €260 mln convertible bond issued in April 2014. This maintains Buwog's LTV within its target range of 50% - 55%.

Buwog, the residential property firm spun off by listed Austrian group Immofinanz, listed on the Frankfurt and Vienna stock exchanges in April 2014 with a market capitalisation of €1.3 bn. 'With the successful completion of the takeover of the DGAG portfolio we have taken a significant step towards growth in Germany,' said Buwog CEO Daniel Riedl.