Real estate developer GTC Group has acquired a large residential portfolio in Germany from Zurich-based real estate investor Peach Property Group.
While the sale price was not disclosed, Peach Property Group confirmed it met expectations. GTC reported a portfolio value of approximately €448 mln, adjusted for full ownership.
GTC's acquisition involves purchasing up to 89.9% of the portfolio partnerships and related companies, with an option to acquire the remaining 10.1% later. The purchase will be funded through a combination of existing bank loans of approximately €185.4 mln, bonds, and secured debt. The transaction is expected to be closed in December 2024.
Located across Kaiserslautern, Helmstedt, and Heidenheim, the portfolio includes over 5,165 residential units, 47 commercial units, 71 other units, and 2,108 parking spaces, totaling approximately 324,167 m2 of leasable space. With an average apartment size of 61 m2, the portfolio offers strong demand and stable rental income. Most units were built between 1950 and 1984, while the occupancy rate of the properties is 87.4%.
Peach Property Group will get around €120 mln from the sale and will use the proceeds to finance investments in its core portfolio and to repay financial debt. It sold roughly 19% of its residential portfolio, primarily opportunistic and non-strategic assets. This divestiture aligns with the company's revised strategy focusing on core regions, high-quality buildings, and strong earning potential, and will proportionally decrease both projected rental income and total asset value.
Gerald Klinck, CEO of Peach Property Group, said: ‘We were able to achieve a good and fair purchase price for the portfolio in difficult market conditions, which was in line with our expectations. The additional cash inflow provides us with considerable financial flexibility. Together with the capital increase of around €120 mln planned for this year, for which we have approached major shareholders to obtain advance commitments, this portfolio transaction will contribute significantly to the upcoming refinancing tasks.’
Post-acquisition, GTC's portfolio will be diversified across asset classes, consisting of 53% office, 28% retail, and 19% residential. Following the purchase, GTC's portfolio distribution by asset value will be approximately: Poland (31%), Hungary (25%), Germany (19%), Bulgaria (8%), Serbia (6%), Romania (6%), and Croatia (5%).
