BERLIN, April 26 (Reuters) – Vonovia (VNAn.DE) has agreed to promote a minority stake in its Suedewo residential portfolio to U.S. investor Apollo for 1 billion euros ($1.10 billion), Germany’s largest actual property group mentioned on Thursday.
The transaction may have a sign impact on the struggling German actual property market, the place hardly any main gross sales have occurred in latest months within the face of excessive rates of interest and falling actual property costs.
The transaction values the Suedewo portfolio within the southwestern state of Baden-Wuerttemberg at 3.3 billion euros, which is a reduction of lower than 5% to Suedewo’s honest worth as of December 31, Vonovia mentioned.
The German group, which is able to proceed to handle the portfolio of greater than 21,000 residential items, has agreed to a long-term buy-back possibility with out an obligation to take action, at an inner charge of return (IRR) of 6.95%-8.30% together with dividends obtained, it mentioned.
With the proceeds, Vonovia will generate round half of the focused 2 billion euros in free money circulation from asset gross sales.
“Not the large bang, and bought 5% under latest honest worth, however ought to be seen as a primary step in the best path,” an area dealer commented following the announcement.
Vonovia’s inventory rose 2.6% at 0733 GMT to the highest of Germany’s blue chip index (.GDAXI).
To safe entry to capital amidst the property market disaster, the group earmarked properties price 13 billion euros on the market in the summertime.
($1 = 0.9108 euros)
Reporting by Tristan Veyet, Kirsti Knolle, Enhancing by Friederike Heine
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