Goldman Plans IPO of German Homes Unit With $6.1 Billion
Goldman Sachs Group Inc. (GS), the bank that sold its stake in Germany’s largest department store last month, plans to sell shares in a unit that owns homes valued at 4.7 billion euros ($6.1 billion) in the country.
An initial public offering of LEG Immobilien GmbH is planned for the first half, LEG said in a statement today. The sale may raise as much as 1 billion euros, said two people with knowledge of the plan. Another person familiar with the IPO said it will probably take place in early February. Both people asked not to be identified because the matter is private.
LEG would be Germany’s biggest property IPO if it raises 1 billion euros. The Dusseldorf-based landlord owns 91,000 apartments in North Rhine Westphalia, Germany’s most populous state. Goldman Sachs’ Whitehall Street Real Estate fund holds about 95 percent of the company.
“The fundamentals for the segment are very good,” said Thomas Martin, an analyst at HSBC Trinkaus & Burkhardt AG. (TUB) “Because some of their competitors are trading expensively, this could be an interesting way for stock investors to get in.”
Goldman Sachs is one of the most active foreign investors in German property. In April 2011, Whitehall Street and Cerberus Capital Management LP raised 468 million euros in an IPO of Berlin-based residential landlord GSW Immobilien AG. Whitehall Street also made an unsuccessful bid to buy Baubecon, the residential property portfolio that Barclays Plc (BARC) agreed to sell to Deutsche Wohnen AG in May in a deal valued at 1.24 billion euros.
Goldman Sachs and LEG co-owner Perry Capital, which bought the company from the state government for about 3.5 billion euros in 2008, are seeking to profit from a boom in German residential real estate. The FTSE EPRA/Nareit index of German property stocks has gained 42 percent in the past 12 months.
Goldman Sachs and Deutsche Bank AG (DBK) will be lead managers and bookrunners for the IPO.
Deutsche Annington Immobilien GmbH, Germany’s largest owner of apartments, also plans an IPO this year. Annington, which has 186,000 apartments, is controlled by Guy Hands’ Terra Firma Capital Partners Ltd.
Whitehall Street agreed to sell its stake in 17 German department stores, including Kaufhaus des Westens, the country’s largest, in December.
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