German residential landlord LEG has inked a €776 mln transaction to expand significantly beyond its home region of North Rhine-Westphalia, after concluding two asset deals, including a major buy from Deutsche Wohnen.
The two transactions for 7,500 residential units reflect an average price of 21.9 times the properties' annual rent. Around 2,000 of the apartments are subsidised housing.
'We are pleased to be able to significantly extend our expansion beyond our home state of North Rhine-Westphalia with the planned transactions,' said CEO Lars von Lackum.
LEG started to buy beyond its home region last year as part of a diversification strategy.
The largest portfolio involves a deal with Deutsche Wohnen for 6,380 units covering some 420,000 m2. These apartments are spread across the Rhine-Neckar region (1,964 units), concentrated in Ludwigshafen and Mannheim; in Braunschweig (1,533 units), Koblenz (1,504 units) and Hanover / Laatzen (1,215 units). Only one property is located in North Rhine-Westphalia, in the city of Cologne (164 units).
According to Deutsche Wohnen, the portfolio is almost 98% occupied, with an average monthly rent of €5.95/m2, which equated to an annual rent of €35 mln last year.
The second, smaller portfolio, which LEG acquired from a private seller, comprises 1,075 units across 70,000 m2 of space in Flensburg. The portfolio is 97% occupied at €5.79/m2 per month, generating annual rents of €4.9 mln last year.
Both deals are subject to agreement from the German antitrust authorities.
