Immofinanz to Spin Off Homes Valued at Up to $5.9 Billion in IPO

Immofinanz AG (IIA) plans to spin off homes valued at as much as 4.5 billion euros ($5.9 billion) in an initial public offering, Eduard Zehetner, chief executive officer of the Austrian real estate company, said in an interview.

Immofinanz will buy more German apartments before the IPO. The Vienna-based company said in September it may sell Buwog, an Austrian unit, and some German properties in a 2014 offering, without giving a value for the assets. Immofinanz owns about 2.4 billion euros of homes in Austria and 127 million euros of German assets.

“Our plan is to grow our German residential segment to a similar size as the Austrian segment, combine the two elements and then take the whole unit to the market,” Zehetner said by phone.

Other residential landlords also plan to sell shares to the public to take advantage of demand from investors seeking a safe place for their money amid the European sovereign debt crisis. Terra Firma Capital Partners Ltd., which owns German landlord Deutsche Annington AG, and Goldman Sachs Group Inc., which holds LEG NRW GmbH, are planning to take their German residential units public in 2013.

In September, Zehetner said the spinoff of Buwog, its residential-property arm, would sharpen Immofinanz’s focus on commercial properties. Immofinanz has about 10.4 billion euros of real estate and development projects in eastern Europe, Austria and Germany. Most of its assets are offices, stores and warehouses.

To contact the reporter on this story: Dalia Fahmy in Berlin at dfahmy1@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.

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