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Blackstone signs €1.4bn German property deal

The latest in a series of German real estate deals has seen the US private equity firm acquire 30,000 rental properties from WCM AG, its third European transaction in a week.

New York-headquartered The Blackstone Group has acquired a portfolio of German residential properties from WCM Beteiligungs und Grundbesitz AG (WCM) for €1.39 billion ($1.9 billion).
 
The transaction is Blackstone’s first foray into residential property in Germany following previous commercial transactions in the country. The deal is expected to complete before the year-end.
 
Under the transaction, Blackstone will acquire the 31,000 apartments in northern and western Germany that comprise WCM’s entire residential property division.
 
Commenting on the transaction, Blackstone’s head of European real estate Chad Pike said in a statement: “The WCM residential portfolio has very stable cash flows…the transaction gives Blackstone an excellent platform for further acquisition opportunities in the German residential property market.”
 
Last year, Blackstone acquired a portfolio of German office properties from Deutsche Bank for approximately €1 billion.
 
This year, the German real estate market has attracted significant interest from private equity firms. In July, New York-headquartered Fortress Investment Group bought property management group Gagfah for €3.5 billion.
 
In May, the Berlin government agreed to sell property association GSW Group to a consortium of investors led by Goldman Sachs and Cerberus Group for €1.97 billion.
 
The WCM transaction is Blackstone’s third major European deal in a week, following the acquisitions of the UK assets of French cinema group UGC in a transaction worth around £200 million (€290 million; $385 million) and the £563.5 million takeover of London-listed Nursing Home Properties (NHP).