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German Property Portfolio Transactions Set for a Big Year

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European Union  Barclays  Germany  Goldman Sachs  CBRE  Frankfurt  Stuttgart  BayernLB  Dresden  Bavaria  LBBW  German government  Konstantin Luttger 

German Property Portfolio Transactions Set for a Big Year

By - Tuesday 15 May 2012

Experts are predicting that German property investment volumes are set to return to pre-crash levels this year after a surge in first-quarter portfolio-transactions signalled buzzing investor-sentiment and appetite.

Some 3 billion Euros worth of portfolio-transactions went down in the first quarter, which is more than triple the amount of transactions in Q1 2011, showing that the current difficulties with financing are not enough to dim investor appetite for German property.

"This is definitely going to be the most active year since the crisis in terms of transaction volume," said Konstantin Lüttger, head of residential investment at CBRE in Frankfurt.

With such high demand it is expected that many portfolio owners will see now as the time to off load some of their assets. More than expected in fact, Gagfah the biggest listed residential landlord in Germany has confirmed that it is considering selling 38,000 flats in Dresden, while Barclays and BayernLB are thought to be considering offloading tens of thousands of flats across Germany.

Those with knowledge of the market report bidders like Goldman Sachs, Blackstone and Whitehall looking to snap up these portfolios, and those with knowledge of Barclays sales plans have lined up Whitehall as bidding for 20,000 of its properties.

Deals already done include 21,000 flats bought from Stuttgart bank LBBW by a consortium of pension funds and insurers and the purchase of 25,000 flats from BayernLB's DKB unit to listed property company's TAG for around 1 billion Euros.

The latter left bailed-out bank BayernLB with a further 32,000 flats in Bavaria to sell in order that it complies with EU competition rules, and the German government has 11,500 flats to sell also.

"There is a lot on the market but the big question for opportunistic investors is whether there is adequate financing. There are not many banks out there that are willing to lend big sums and consortium deals are more complex," Mr Lüttger said.

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*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.

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