ZBI swoops on 6,000 homes from Deutsche Wohnen for €615m

German housing specialist ZBI Group has inked a deal with listed residential giant Deutsche Wohnen to acquire 6,350 units across the country for €615 mln.

The properties are located primarily in Kiel, Lübeck, Erfurt and Chemnitz and are thus regarded as being outside Germany's metropolitan regions.

The deal marks the second major transaction for ZBI this year, after acquiring peer BGP Group last month from Morgan Stanley Real Estate Investing (MSREI), whose principal investor is China's sovereign wealth fund CIC. That deal, worth some €2 bn, comprised a portfolio of 16,000 German residential and commercial units.

The Deutsche Wohnen transaction brings ZBI's portfolio to some 65,000 units under management. Erlangen-based ZBI is 49.9% owned by German property giant Union Investment, which, according to media sources, plans to eventually transfer BGP's properties to its investment funds.

Deutsche Wohnen said that the sale 'reinforced its strategy of making sustainable improvements to the quality of its portfolio by streamlining non-strategic holdings and by making targeted acquisitions'.

The Frankfurt-listed property firm added that 'the fundamentals of the metropolitan regions in Germany remain positive', giving it confidence that 'these regions, and particularly Berlin, will continue to gain in both value and appeal'.

According to Deutsche Wohnen, the purchase price represents a multiplier of roughly 22x the current rental income and is around a third above book values. The anticipated net cashflow of approximately €500 mln will be used mainly to finance the acquisition of just under 3,000 units in metropolitan regions in western Germany.

The completion of the deal is subject to antitrust approval and is expected to take place by the end of 2019.


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