More resi deals on the cards in Germany

German real estate investment company Patrizia Immobilien has confirmed it is eyeing the GBW residential portfolio which German state owned bank BayernLB is expected to sell off in a slew of large sales due to hit the market in the coming months. BayernLB is believed to be seeking a price of around EUR1.5bn for its GBW Gruppe portfolio of more than 32,000 residential units.

A BayernLB spokesman told PropertyEU that the bank was mulling a possible sale of GBW to a consortium of Bavarian ‘Kommunen’ or counties, which could include granting them a temporary exclusivity period in which to make an offer. No deadline has been set for the sale, the spokesman said. According to someone else familiar with the matter, the counties, which would likely include Munich and Würzburg, are expected to meet this Friday.

Other deals that are also reportedly on the cards include the sale of bankrupt property group Speymill Deutsche Immobilien Company’s portfolio of 26,000 residential units. Receiver for the portfolio Ernst & Young is hoping to get around EUR950mln from the sale, according to those who track the market. An Ernst & Young spokesman told PropertyEU that the process was ‘ongoing’ but declined to provide further details. Matthias Moser, head of Patrizia’s alternative investments arm, told PropertyEU that Patrizia is eyeing the GBW portfolio but not the Speymill portfolio as it is less interested in distressed assets.

Also believed to be for sale - albeit off market - is the BauBeCon residential portfolio comprising around 23,000 units, once owned by Cerberus, but which was sold to Pirelli Real Estate - or Prelios - in 2007. Around 1,800 units in the portfolio were already sold to Conwert Immobilien Invest last March. The rest of the portfolio would likely sell for more than EUR1bn, according to those who track the market.

Earlier this week, Patrizia announced has acquired Landesbank Baden-Württemberg’s (LBBW) portfolio of 21,000 residential units in a joint venture for EUR1.43bn. The deal is expected to close by the end of this quarter.
Augsburg-based Patrizia beat off stiff competition from other would-be buyers, including one of Germany’s largest listed housing companies, Deutsche Wohnen, and Austrian residential property company Conwert Immobilien Invest. Private equity groups such as Blackstone are also believed to have eyed LBBW’s portfolio at an early stage in the process.

The consortium led by Patrizia consists of five German insurance companies, which represent about 40% of the equity, including LVM Insurance; two foreign pension funds with a 30% stake - the Swedish national pension fund AP3 and a Swiss pension fund; three German pension funds, which hold a 25% stake combined; a Baden-Württemberg-based savings bank, with 3%, and Patrizia with 2%. Patrizia will act as the investment and asset manager for its co-investors and now plans to invest EUR25 mln in repairs and maintenance to maintain the quality of the residential units, it said in a statement.