Report: German properties on the block

Oaktree Capital has been granted exclusivity in the €1bn sale of 21,000 homes from HSH Nordbank, while four bidders vie for a €6bn Viterra portfolio.

Hamburg-headquartered Landesbank HSH Nordbank has granted exclusivity to US private equity firm Oaktree Capital for the sale of its Gehag portfolio for approximately €1 billion ($1.3 billion), according to a report in the Financial Times.

Oaktree, a distressed debt and real estate specialist, is seeking to acquire the 21,000 home portfolio that HSH Nordbank acquired as a guarantee on a loan to real estate investment group WCM Beteiligungs- und Grundbesitz-Aktiengesellschaft (WCM).

In December, WCM sold a portfolio of German residential properties to New York-headquartered The Blackstone Group for €1.39 billion.

The sale of Gehag is the latest in a series of German real estate transactions and also presages the largest ever disposal of European residential property – the sale of a €6 billion property portfolio by German property group Viterra.

According to the Financial Times, Viterra has produced a shortlist of four bidders for the portfolio comprising Terra Firma Capital Partners, Fortress Investment Group, Cerberus Capital Management and German fund Corpus Immobilien.

Each of the groups is reported to have submitted bids of between €5 billion and €6 billion and are engaged in due diligence before a second round of bidding in the coming weeks.

The deal is not the first time that Terra Firma, led by Guy Hands, and Fortress,  led by Matthias Moser, a former Terra Firma employee, have clashed in acquiring German properties.

In July last year, Fortress beat off interest from Terra Firma to acquire property management group Gafgah for €3.5 billion but in December German utility company RWE sold 4,500 German apartment units to Terra Firma for €225 million.

In a third forthcoming German property deal, Hanover-based Landesbank NordLB will look to sell its 30,000 home Nileg portfolio next month according to the report.

The German residential property market attracted significant interest in 2004 including the €1.97 billion sale of property association GSW Group to a consortium of investors led by Goldman Sachs and Cerberus Group by the German government.