IMMOFINANZ-Owned BUWOG to Buy 18K-Unit Portfolio in Germany for $1B
- Feb 19, 2014
BUWOG, the subsidiary of IMMOFINANZ Group, one of the largest entities of its kind in Europe, is giving the German multi-family market a boost by acquiring an 18,000-unit portfolio for $1.2 billion.
The acquisition also includes the takeover of seller Solaia RE’s residential asset and property management business of Prelios Deutschland. Solaia RE is a joint venture between the aforementioned Prelios and an investment fund managed by Deutsche Asset & Wealth Management – Real Estate.
The 18,000 residential units included in the transaction total a leasable area of approximately 11.7 million square feet. According to a press release issued by IMMOFINANZ Group, the gross yield of the newly-acquired portfolio equals 7.6 percent, while the occupancy rate of the portfolio stands at 97.7 percent.
After the completion of the transaction, which, according to the buyer will take place during this year’s Q2, BUWOG’s portfolio will rise to around 54,000 residential units, totaling an excess of 40 million square feet of leasable area. The total value of the entity’s assets will rise to around $4.7 billion. Overall, the portfolio will have a gross rental yield of 5.5 percent based on a vacancy rate of 4.5 percent.
The transaction will also mean BUWOG will reach its strategic goal to amass a portfolio focusing on the core markets of Austria and Germany, with the units almost evenly divided between the two national markets. Now the Executive Board and Supervisory Board of IMMOFINANZ AG have given the green light on a proposal that would offer shareholders the opportunity to be part of the spin-off of BUWOG, and its forthcoming listing on the stock exchange.
IMMOFINANZ shareholders will be given the option of exchanging 20 IMMOFINANZ shares for one BUWOG share, with the goal being that 51 percent of the entity be owned by free float investors, the press statement indicated. Parent company IMMOFINANZ AG will no longer control the BUWOG Group once this deal is finalized, and to that effect, has come up with a de-domination agreement with BUWOG AG, to be concluded in the upcoming quarter.