Goldman, Cerberus to pay €1.97bn for GSW

The two firms will lead a consortium to privatise the Berlin-owned real estate association, giving it a 4 percent share of the city’s housing market.

The Berlin government has agreed to sell property association GSW Group to a consortium of investors led by Goldman Sachs and Cerberus Group for €1.97 billion ($2.4 billion), which includes €1.57 billion ($1.89 billion) worth of debt.

The acquisition is being done through the Goldman Sachs Whitehall Street Real Estate Fund and Cerberus European Investors, a fund managed by Cerberus’s German arm. Goldman will take 50 percent of the property firm, Cerberus 40 percent, while the remaining 10 percent share is being purchased by German real estate investment firm Contest Beteiligungs GmnH. The two firms are reported to have beaten off competition from George Soros’s Apellas Property Management.

The deal, which is being reported as one of the largest privatisations ever of Germany’s publicly owned real estate portfolios, gives the consortium control of GSW’s housing construction association, and property management and development businesses. GSW owns 65,700 apartments, approximately 4 percent of the German capital’s housing market.

Berlin’s government has been selling assets as of late to raise cash. The Financial Times reports that another state-owned real estate operator, Essen-based Gagfah, with about 80,000 properties, is due to be sold. Terra Firma and Fortress last week began final negotiations.

Goldman Sachs’s Whitehall real estate funds manage $66 billion of properties. Past investments include New York's Rockefeller Center and Westin Hotels & Resorts. The firm joined with a group of investors led by Morgan Stanley in a $3 billion winning bid last week for the purchase of Canary Wharf in London.

Cerberus in Germany has invested in real estate funds with about 5,000 apartments.