TAG Immobilien AG today acquired a residential property portfolio with 3,985 residential units and 26 commercial units for around €120.5 million. The properties are located at various sites in former East Germany.
The regional focus is in Thuringia with about 3,000 units along the A4 autobahn and in the university towns of Jena, Erfurt and Weimar; the remaining units are mostly located in Saxony and Saxony-Anhalt.
The rentable area is approximately 236,000 m², at a current rent of around €12.4 million per annum. The portfolio, which was acquired in an asset deal, includes around 440 units that are slated for resale in the medium term. With a vacancy rate of 10.7% and because it was purchased from a complex ownership structure, the portfolio has interesting potential for future development. TAG's good local infrastructure puts it in a position to efficiently manage and develop the predominantly renovated inventory.
In sum, the acquisition increases TAG's residential holdings to over 74,000 units and will increase the Group's operating cash flow and FFO long-term.
TAG CEO Rolf Elgeti commented on the acquisition: “Like the acquisition of just under 3,000 units we announced in December 2013, this portfolio can be managed entirely using TAG's existing team. We expect the deal to close by mid-year 2014. The regional breakdown fits very nicely with our administrative structure, and the portfolio represents a very interesting extension of our existing inventory."
Source: TAG Immobilien