Pricoa buys German residential real estate

Prudential’s European property private equity unit has advised on an investment in a portfolio of 200 units of residential real estate units across Germany.

Pricoa Property Private Equity (PPPE), the European real estate private equity arm of US-based Prudential Real Estate Investors (PREI), said it has advised Prudential Financial Inc, its parent, on a strategic investment in DeWag WohnAnlage, a Stuttgart-based residential real estate investment and consulting group.

DeWag has a portfolio of approximately 200 housing units in eight different locations across Germany. The firm, set up to benefit from Germany’s growing base of home owners, is to use the funding from Pricoa to acquire additional properties from industrial corporations and institutional investors. Under the terms of the deal, Prudential will take a 70 per cent stake in DeWag in return for an equity investment of circa E20m.  

Jonathan Short, chief executive officer of PPPE in London, commented: “We believe [DeWAG] is well-positioned to meet the growing demands for private home ownership in Germany. German corporations are unbundling their residential homes portfolios, and with interests being where they are, it is very affordable.”

The deal marks PPPE’s third investment in continental Europe. In June 2000, the unit invested $80m in the purchase of Banimmo Real Estate, a Belgian property manager. Prudential Financial Inc., PPPE’s parent, has since sold a 50 per cent stake in Banimmo to Artesia Banking Corporation. In November 2000, PPPE injected $80m of growth capital into Bauwert, a Berlin-based property developer.

PPPE closed European Property Partners, its first European real estate private equity fund in May 2001 at E227m, with external investors investing alongside Prudential Financial. According to Short, the fund is almost fully invested.