A Deutsche Bank AG (DBK) fund and Prelios SpA (PRS) are in talks to sell about 18,000 homes in northern Germany to Immofinanz AG (IIA)’s Buwog unit. The properties are valued at about 942 million euros ($1.3 billion).
The acquisition would boost Buwog’s assets before an initial public offering planned for next year, Immofinanz said in a statement today. A deal may be reached by the end of next month, the Vienna-based property company said.
Immofinanz has been adding German apartments as it prepares to sell Buwog. Deutsche Bank and Prelios are seeking to profit from demand for German homes as investors seek alternatives to lower yielding fixed-income assets.
Asking prices for existing German apartments have gained about 10 percent since 2007, according to data compiled by Berlin-based online broker ImmobilienScout24.
The homes Buwog might buy are managed by DGAG Wohnimmobilien GmbH. Prelios bought DGAG with 22,000 apartments in 2007 for about 1.4 billion euros. The Deutsche Bank fund then invested in the company and became a co-owner.
The valuation of DGAG’s apartments, made at the end of June, was disclosed in Prelios’s second-half financial report. They were financed with 683 million euros in debt and had a 2.2 percent vacancy rate. Prelios said the debt was due to mature at the end of this year.
Prelios in December said it planned to gradually divest its real estate holdings with the goal of focusing on property servicing. That month, the company was one of a group of owners that sold Berlin’s KaDeWe department store as part of a deal valued at 1.1 billion euros.
Institutions including insurers, pension funds and private-equity firms may buy about 10 billion euros of German residential buildings in 2013, according to data compiled by broker Jones Lang LaSalle Inc. (JLL) In 2012, they bought 11.1 billion euros of homes, the most since 2007.
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