US private equity firm KKR is understood to be the buyer of a €1 bn+ portfolio of apartments being sold by German group Adler as part of plans to deleverage the business.
Adler said in a statement that it has signed a letter of intent to divest the package to ‘one of the largest providers of alternative asset management’ but did not disclose the name of the buyer.
Bloomberg first reported that KKR together with local partner Velero is buying the properties, which consist of 14,300 units in eastern Germany.
The partners are working towards a signing of the deal in December.
While Adler is trying to focus its portfolio on Germany’s top 7 cities, the assets being sold are mainly located in mid-sized cities and are no longer strategic to the company’s business.
The transaction valuation of more than €1 bn is at a premium to the book value appraised by CBRE as of end of June 2021, Adler said.
After the repayment of secured loans on the assets, the net proceeds of the deal are expected to be at around €600 mln, it added, with the deal expected to reduce the firm’s LTV below 50%.
Closing of the transaction is planned to take place in Q1 2022.
The transaction follows Adler's €1.5 bn sale earlier this month of 15,000 apartments in northwest Germany to rival LEG.
KKR declined to comment.
