Degi offloads assets for more than EUR 2.9 bn

Degi, the real estate investment arm of German insurer Allianz, has announced that its Grundwert open-ended fund is selling a commercial portfolio with a current market value of around EUR 2.45 bn to affiliates of the Whitehall Funds, real estate funds sponsored and managed by Goldman Sachs. Although the financial details of this transaction have not been disclosed, Degi said that the portfolio was sold 'for a price above market value.'

The package comprises 37 office and retail properties of different sizes spread across Germany. The transaction reduces the portfolio of the Degi fund by more than half, to 25 assets valued at some EUR 2.3bn. Degi told PropertyEU that the transaction is independent from the EUR 3.5 bn disposal of assets announced last Friday by Dirk Grosse-Wordemann, head of Allianz's property business.

Separately, Degi has also sold the Eurotower skyscraper in Frankfurt to New York-based company RFR Holding for its current market value of EUR 430 mln. Purchased by DEGI in 1994, the 148-metre 39-storey Eurotower is entirely leased to the European Central Bank (ECB) until 2011.

'This measure will not only benefit the fund's performance; thanks to its leaner portfolio, the fund will also become substantially more flexible and responsive to manage,' said Degi's Bärbel Schomberg. Completion is expected in the coming few months. Some 60% of the properties currently owned by Grundwert fund are located in Germany, while the European assets account for 40% of the fund's total portfolio. Schomberg told a conference call that she could not say whether Degi would go on a shopping spree with the proceeds of the sales. But she did say the company did not necessarily intend to increase the European portion of its business.