German real estate firm Deutsche Wohnen AG (DWHHF.PK) agreed Sunday to acquire Barclays Plc's (BCS: Quote,BARC.L) German real estate unit. The company will buy BauBeCon GmbH along with its about 23,500 residential units for about 1.235 billion euros. The company expects to complete the deal in the coming months.
About 82 percent of BauBeCon's residential units are situated in metropolitan areas, with about 40 percent of these in Hanover, Braunschweig, Magdeburg and 30 percent of these in Greater Berlin.
Deutsche Wohnen said it will finance the deal through a combination of equity and debt so as to maintain a mid-term LTV ratio of less than 60 percent, post the closure of the deal.
The deal will boost Deutsche Wohnen's holdings in the core region of Greater Berlin by about 6,500 residential units, while adding a new metropolitan area of Hanover/Braunschweig /Magdeburg, with about 9,000 residential units.
Following the completion of the deal, Deutsche Wohnen will expand its total portfolio of residential units to about 73,500 from the current about 50,000, while achieving its mid-term targeted size of 75,000 units.
BauBeCon's 23,500 units have a total annualized net rent contract of about 95 million euros, as of March 2012, with the average monthly net rent contracted in core regions being 5.40 euros per square meter, and vacancy rate being 2.7 percent.
The deal will also provide Deutsche Wohnen and its shareholder with further improvement of the funds from operations, while pursuing its consistent value-creating growth strategy.
Barclays had acquired BauBeCon from Prelios SpA and Deutsche Bank AG's RREEF Real Estate, when the two companies refused to pay back a 1.3 billion euro loan provided by Barclays to fund their 1.67 billion euro acquisition of BauBeCon in 2007.
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by RTT Staff Writer
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