Patrizia inks purchase of Hesse portfolio

Listed German property investor Patrizia Immobilien has signed an agreement to acquire the €800 mln Hesse portfolio from Austrian group CA Immobilien Anlagen.

CA Immo acquired the package, comprising 36 properties at 19 locations, in 2006 from the German state of Hesse in a sale-and-leaseback deal worth €770 mln. The acquisition marked the entry of the Austrian group into the German property market.

The assets, offering a total of 450,000 m2, are currently valued at around €800 mln and are fully let on 20-year rental agreements.

Patrizia is undertaking the acquisition on behalf of a German-speaking consortium of investors via a special real estate fund.

In a statement, CA Immo said the sale is in line with the company's strategy to streamline the portfolio with a view to raising the profitability of the group.

Bruno Ettenauer, CEO of CA Immo, noted that the past few weeks have been decisive for CA Immo. 'We have finalised the biggest single transaction of 2013 with the proportional sale of Tower 185 in Frankfurt, and now the biggest portfolio deal of the year with the sale of the Hesse portfolio. Thanks to these large-scale deals, we have sold 20% of our portfolio above the book value.'

CA Immo has been active in Germany since 2006. Five years ago the company took over Vivico Real Estate, a German company specialising in urban development. The CA Immo Group currently has a development pipeline valued at €660 mln in the country.

The sale also enables CA Immo to strengthen its balance sheet and cut financing costs. 'The transactions confirm that the strong discount in the share price to NAV is much too high. All in all, we are well on the way to achieving a strongly positive annual result for 2013 - and to making CA Immo more profitable in the long run,' added Ettenauer. In total, CA Immo owns €5.3 bn of assets.