A US investment firm is to spend nearly €1 billion buying up more than 22,000 apartments that are located across Germany. It’s been reported that the deal is worth around €900 million, and the properties are being bought from the bankrupt UK firm, Speymill. The deal which involves the investment company Cerberus and real estate management company, Corpus Sireo, has already received approval from Germany’s federal cartel office.
Morgan Stanley and a Goldman Sachs fund, Whitehall Blackstone, were initially reported to have been interested in the property portfolio, but Cerberus is renowned for being extremely aggressive. Even its name is a reference to Greek and Roman mythology, as Cerberus is supposed to be a multi-headed hound that guards the gates to hell. It’s not the company’s first foray into German property, as in 2004 Cerberus and a subsidiary of Goldman Sachs bought GSW, a housing management firm owned by the state of Berlin with a portfolio of more than 60,000 apartments. In 2011 the investors took part of the company public and sold the rest, removing the apartments from the public housing market.
In 2007 it became much harder to access credit in Germany, but recently it’s become much easier to obtain financing. This current interest in German property shows how much the real estate market has improved recently, as property prices in Germany have started increasing at an annual rate of 5.5% after remaining stagnant for nearly 20 years.
A report in Property EU shows Germany is currently the most active investment market in Europe, and attracted more than 30% of all real estate investment during the first quarter of this year, more than the UK and France. According to their analysis the total investment into European real estate was a €17.2 billion, with Germany accounting for €5.4 billion.