240: Munich Re Sells 1 Bln Eur Worth of German Property
Navigation trail: / latestnews / archive / 240 - published: 30-11-06
FRANKFURT (Reuters) - Munich Re (MUVGn.DE: Quote, Profile, Research) said on Wednesday it was selling German real estate worth more than 1 billion euros ($1.3 billion) to Goldman Sachs' (GS.N: Quote, Profile, Research) Whitehall fund and property company Patrizia Immobilien (P1ZGn.DE: Quote, Profile, Research).
Munich Re's asset management unit MEAG said the sale was part of the unit's strategy to diversify its real estate portfolio, which after the sale was still valued at around 14 billion euros.
"Even after the sale, German real estate will remain an important part of our portfolio. We are looking carefully at buying select properties," said MEAG head Knut Riesmeier in a statement, adding that it may also buy individual properties in Asia and the United States.
The companies said they had agreed not to release financial details of the transaction.
Patrizia said separately it was buying 6,805 mainly residential properties in western Germany in the largest single transaction in its company history, using proceeds from its March initial public offering to fund the purchase.
JP Morgan analysts estimated the value of the transaction at around 850 million euros and said the purchase was positive for Patrizia's outlook.
Patrizia normally finances 90 percent of such transactions with debt, and just 10 percent with its own cash.
Patrizia's shares rose by as much as 5.7 percent to 19.37 euros but pared gains to trade up 1.4 percent at 18.57 euros by 1522 GMT. The mid-cap MDAX <.MDAXI> index rose 1.7 percent.
Munich Re shares rose 0.8 percent to 122.71 euros.
Earlier this month, residential-focused Patrizia said more and more investors were interested in buying real estate in Germany, a factor that helped its third-quarter net profit rise by 75 percent to just over 9 million euros.
Goldman Sachs' Whitehall funds purchased 97 different properties from MEAG, almost all of them commercial real estate.
"Goldman Sachs plans to hold on to the properties and work down vacancies," a spokesman for the company said.
The U.S. investment bank already has invested about 11 billion euros in the German property market.
Earlier this week, Whitehall was reported to have been one of the unsuccessful bidders for 2 billion euros worth of property sold by Deutsche Bank (DBKGn.DE: Quote, Profile, Research) property unit DB real estate.
That sale was won by private equity investor Fortress, a source told Reuters.
Source:
Reuters.co.uk