Barclays sells German property

City A.M. Reporter
GERMAN real estate group Deutsche Wohnen said yesterday it has agreed to buy a real estate portfolio valued at about €1.24bn (£992m) from Barclays.

The deal comprises about 23,500 apartments with a low average vacancy rate of 2.7 per cent, most of which are located in or near cities including Hanover, Berlin and Magdeburg, Deutsche Wohnen said.

Investors are flocking to the German property market, attracted by a steady rise in values in the last couple of years, which contrasts with the boom-and-bust of the Spanish and Irish real estate markets.

Sources had said earlier this month that other parties interested in Barclays’ apartments included Deutsche Wohnen’s peer GSW and former owner Whitehall Funds.

Deutsche Wohnen said it will use equity and debt to finance the deal, in which it is paying about 13 times annualised net rent to boost its stock of apartments by almost half to 73,500.

Last week Barclays sold its 20 per cent stake in asset manager Blackrock at a discount to the company’s closing price, after new Basel III regulations governing the amount of capital that banks must hold against minority stakes in asset managers and other firms made it less profitable.