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Buyout firms set sights on Germany's commercial real estate- report

January 21
1:47 AM 2014

Private equity firms like the Blackstone Group LP are among the growing number of investors planning to look for investment opportunities in Germany's commercial real estate market where owners strapped for cash are being pressed to make deals, Bloomberg reported. Last year, Blackstone was able to cash in on its investments in the country's booming housing market, the report said.

Citing estimates from broker Savills Plc, the report said that last year investors spent the most on offices, stores and warehouses in Germany since 2007. The report said Blackstone and its peers want to grab their share of acquisitions even with rising values.

CBRE Group Inc Head of German Investments Fabian Klein told Bloomberg, "Residential is getting too expensive and they're using the peak to liquidate." He said opportunistic investors were clearly more interested in deals involving commercial properties.

Savills said private equity companies comprised 3% of the €30 billion or $41 billion that investors poured into commercial real estate in Germany last year. That figure could probably rise to 10% in 2014. There is growing demand as there are new properties set to become available when lenders and financially-strapped owners divest of distressed assets, the report said.

A source told Bloomberg in December that Blackstone agreed to purchase three warehouses located in Germany in a deal valued at €100 million. The source added that the property is being sold by a mutual fund of Credit Suisse Group AG that is in liquidation known as CS Euroreal.

Meanwhile, UK-based private equity real estate company Benson Elliot Capital Management LLP made its first purchase of commercial property in Germany in seven years, the report said.

The real estate business of Blackstone has ramped up its investments since it set up an $11 billion fund in 2008 which is intended for the acquisition of buildings worldwide, the report said.

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