The first of an anticipated many major real estate transactions involving banks selling off German portfolios has been completed, as Barclays sells 23,500 apartments to German real estate group Deutsche Wohnen for 1.24 billion Euros.
In the last few weeks there have been several articles on the desires of Barclays and other owners of German portfolios to sell up as there is currently incredibly strong investor interest in Germany, and now the deals are apparently starting to roll out as it were.
The investor sentiment, as you'd expect is not based on clairvoyance, dowsing or any other such mumbo jumbo but cold hard facts. For example, the portfolio Deutsche Wohnen has purchased this week has an average vacancy rate of just 2.7% across the 23,500 apartments. Investors are also impressed by the steady capital growth of German residential property over the past few years, especially against the backdrop of more volatile countries such as Spain and Ireland.
When we reported on Barclays plans to sell around 20,000 apartments on May 15th Whitehall was thought to be the main bidder and Deutsche Wohnen wasn't even mentioned, but the firm eventually came through to beat Whitehall and rival company GSW for the portfolio.
Deutsche Wohnen said it will use equity and debt to finance the deal, in which it is paying about 13 times annualised net rent to boost its stock of apartments by almost half to 73,500.
Last week Barclays sold its 20 per cent stake in asset manager Blackrock at a discount to the company’s closing price, after new Basel III regulations governing the amount of capital that banks must hold against minority stakes in asset managers and other firms made it less profitable.
- Thursday 31 May 2012