US private equity firm Lone Star has bought a mixed-asset portfolio from German state-owned property company TLG Immobilien for EUR 1.1 bn, the finance ministry announced on Wednesday.
US private equity firm Lone Star has bought a mixed-asset portfolio from German state-owned property company TLG Immobilien for EUR 1.1 bn, the finance ministry announced on Wednesday.
The deal is the largest commercial real estate transaction in Germany this year and the country’s biggest privatisation in five years, the ministry noted.
Excluding debt, the German state will receive net proceeds of EUR 594 mln in 2013.
The portfolio comprises around 780 assets ranging from offices and shopping centres to hotels and retirement homes. 'The current market situation posed an ideal opportunity for the German government to sell TLG Group ... and to realise a good price for taxpayers,’ German finance minister Wolfgang Schaeuble said. Barclays Bank advised the government on the transaction.
The deal comes a month after the acquisition by German listed property group TAG Immobilien of TLG’s residential portfolio for EUR 471 mln, including debt. Net proceeds from that deal - involving 11,350 residential units - totalled EUR 218 mln.
Together, the two deals complete the privatisation of TLG, which was set up in 1991 to manage government-owned real estate assets in East Germany following reunification. Early this year the agency was split into two units for commercial (TLG Immobilien) and residential real estate (TLG Wohnen) to facilitate a sale to separate buyers.
Lone Star already owns German commercial real estate lender Corealcredit Bank. The US investor aims to use the TLG portfolio as a platform for its German real estate operations. Rival private equity funds Cerberus and Blackstone are also understood to have been in the running for the TLG portfolio.
Click on the link below to read TAG wins TLG resi portfolio with EUR 471m bid
