Deutsche Annington Said Nearing $1.8 Billion Vitus PurchaseKiel Porter, Dalia Fahmy and Aaron Kirchfeld
Deutsche Annington Immobilien SE is close to buying Vitus Immobilien Sarl, a German landlord partly owned by Blackstone Group LP, three people familiar with the matter said.
Deutsche Annington and Vitus’s owners plan to enter exclusive talks over a transaction that may value Vitus at about 1.3 billion euros ($1.8 billion), said the people, who asked not to be identified because the deal is yet to be signed.
Representatives of Deutsche Annington, its majority owner Terra Firma Capital Partners Ltd., Blackstone and Vitus declined to comment on the discussions.
Demand for German homes is being fueled by record-low borrowing costs, a strengthening economy and declining unemployment. Insurers, pension funds and private-equity firms will buy as much as 11.5 billion euros of German residential buildings in 2013, according to data compiled by broker Jones Lang LaSalle. Investors bought 11.1 billion euros of German homes last year, the most since 2007.
Vitus’s owners were considering selling stakes or adding new investors to profit from demand for German housing, Chief Executive Officer Ben Lehrecke said in August. The company was valued at 1.5 billion euros in a 2011 report by Jones Lang LaSalle, according to investor documents for a Vitus commercial-mortgage backed security issued last year.
Deutsche Annington, Germany’s biggest residential landlord by market value, sold shares to the public for the first time in July. Last month, the Bochum-based company said nine-month profit rose 41 percent after interest payments fell.
Vitus, founded in 1869, owns and manages homes in western German cities including Dusseldorf, Kiel and Bremen, according to its website. Blackstone bought the company in 2004 for 1.39 billion euros, and in 2007 sold a majority stake for 1.6 billion euros to funds managed by Round Hill Capital, Deutsche Bank AG and Aviva Plc.