German listed residential property landlords Vonovia and Deusche Wohnen confirmed on Friday that they have concluded the sale of a portfolio of 14,740 residential units in Berlin to the municipal housing companies berlinovo, degewo and Howoge for a price of €2.45 bn.
In a statement, the two companies - which are working to merge their businesses - said that they are selling the stock in order 'to contribute to the expansion of municipal housing stock in Berlin and to alleviate strain on the rental market in the German capital'. The sale agreement also includes around 450 commercial units.
Under the sale, which was reported by PropertyEU last week, Vonovia is divesting around 4,250 residential and commercial units for €811 mln. The apartments shall be transferred to the municipal housing companies in January and July of next year.
Deutsche Wohnen is selling 10,700 residential units and more than 200 commercial units in Berlin for a price of €1.65 bn.
Rolf Buch, CEO of Vonovia, said: 'With this sale of housing stock in Berlin to the municipal housing companies, we are fulfilling a central promise to the Berlin Senate from the Future and Social Pact for Housing. We are selling the apartments at a fair price. As a reliable political and social partner, we contribute sustainably to solutions for the Berlin housing market.'
'As well as contributing to the expansion of municipal housing stock, we continue to stand by our commitments to limit regular rent increases across our combined Berlin portfolio until 2026 and to build 13,000 new flats in Berlin. In this way, we will create more affordable, needs-based and climate-friendly housing - especially for young families. Only by working with political and social partners in the city will we succeed in tackling the challenges facing Berlin's housing market,' Buch added.
Michael Zahn, CEO of Deutsche Wohnen, commented: 'With the sale, we are reaffirming our role as a trustworthy partner for the State of Berlin. The current transaction continues the constructive cooperation, following the sale of several portfolios to state-owned housing companies in the past.'
The sale was first announced in May with the announcement of a potential business combination between the companies. It is part of the “Future and Social Housing Pact” („Zukunfts- und Sozialpakt Wohnen“) for Berlin presented by the companies and the Senate. In this context, a total of around 20,000 apartments have been offered for sale to the state of Berlin by Deutsche Wohnen and Vonovia. An agreement was reached for 14,750 residential and 450 commercial units.
Michael Zahn: 'The negotiations were characterized by constructive and respectful interaction. Once again, we have seen what can be achieved when everyone pulls together - the housing industry, politics and administration. I am convinced that together, we will also better overcome all the other challenges.'
Last week Vonovia announced it is waiving all offer conditions in its voluntary public takeover bid for the shares of Deutsche Wohnen. The landlord said that the measure was being taken in accordance with its offer dated 23 August and in consultation with Deutsche Wohnen, whose board has approved the merger.
The step eliminates the need to reach a minimum acceptance threshold, which Vonovia said would ensure the success of the transaction, 'in the interest of both companies' stakeholders'.
Vonovia currently holds just short of 30% of the Deutsche Wohnen share capital. In addition, the landlord has signed contracts with investors regarding the purchase of approximately 6% of the outstanding shares.
Together with the already tendered shares of approximately 4%, as of 13 September, Vonovia has currently secured more than 40% of Deutsche Wohnen's share capital. It will also be able to obtain an additional 4% of Deutsche Wohnen shares following the completion of the takeover offer.
