Luxembourg-based real estate group BGP Investment has put a €1.1 bn German residential property portfolio on the market, its managing director, Mark Dunstan has told PropertyEU.

Luxembourg-based real estate group BGP Investment has put a €1.1 bn German residential property portfolio on the market, its managing director, Mark Dunstan has told PropertyEU.

BGP Investment is pursuing a ‘dual-track’ process whereby it is considering a sale or an IPO, Dunstan said.

‘It’s very fortuitous that we’re selling a German resi portfolio at this time because interest in the sector is very strong,’ said Dunstan. ‘We have seen interest from a wide-range of investors, including private equity groups.’

The portfolio comprises 1.16 million m2 - or around 16,000 units - of which around 40% are located in Berlin, with the remaining properties mainly located in the north of the country, in cities such as Cologne and Kiel.

‘It has a reported property book value of €1.1 bn but I think it will sell for a premium due to the strong interest in Germany’s residential sector,’ said Konstantin Kortmann, head of residential investment at JLL in Germany. JLL is not advising on the disposal process.

According to Dunstan, BGP is selling its German residential assets because shareholders inherited them following the firm’s restructuring in 2009 and the plan was always to sell them eventually. Dunstan is hoping to offload the portfolio by the year-end. If the portfolio is sold, BGP Investment will be sold with it, Dunstan said, along with the asset management platform. ‘We would then wind up the Maltese companies. If the company is listed, BGP Investment will remain as the listed entity and the Maltese companies would eventually be liquidated,’ Dunstan added.

BGP started out as a joint venture between failed Australian investment and advisory firm Babcock & Brown and listed real estate firm GPT Group before being restructured in 2009 as an independent company in Luxembourg. The restructuring followed Babcock & Brown’s collapse into bankruptcy in the same year.

BGP Investment held a €3 bn pan-European real estate portfolio five years ago, according to Dunstan. After the disposal of its German residential portfolio, the group will not hold any other real estate assets.