UPDATE 1-BayernLB launches sale of 33,000 flats
* BayernLB to kick off GBW sale in coming days
* Package of 33,000 flats could reap 2 bln euros - experts
* Patrizia Immobilien says is getting ready to bid
* Group of German municipalities also set to bid (Adds comments from BayernLB CEO)
By Peter Dinkloh and Christian Kraemer
MUNICH, Oct 10 (Reuters) - German public sector lender BayernLB will start the sale of 33,000 flats in the next few days, its Chief Executive said, in a deal that could easily top this year's biggest real estate transaction in Germany.
The bank, which has to sell the real estate unit GBW to meet European Commission demands, is seeking non-binding bids until year-end, CEO Gerd Haeusler said on Wednesday.
Experts have said the package could fetch about 2 billion euros ($2.6 billion).
BayernLB ran into trouble in 2008 after risky investments turned sour in the financial crisis, prompting the state of Bavaria to inject 10 billion euros in fresh capital.
To ensure the so-called Landesbank - a German state-owned regional bank - does not have an unfair advantage, Europe's competition watchdog demanded a revamp, which included the sale of assets like GBW.
Potential buyers will be able to access data rooms in early 2013, Haeusler said, adding the goal was to close the deal by April 2013.
German real estate company Patrizia is ready to participate in the auction, Patrizia's finance chief Arwed Fischer told Reuters. "We are ready to get going," he said.
Patrizia would make a bid for the flats - located in economically robust southern German cities such as Munich and Nuremberg - jointly with about a dozen co-investors, mostly pension funds and insurers.
"There is enough interest," Fischer said, saying it was relatively easy to get investments from individual investors of more than 100 million euros at the moment.
Separately, a group of southern German cities and municipalities, partnering with financial investors, have said they will place an offer.
A consortium led by Patrizia already made the biggest real estate acquisition earlier this year, buying the real estate assets of Germany's biggest public-sector bank LBBW for 1.44 billion euros.
($1=0.7754 euros) (Writing by Maria Sheahan and Arno Schuetze; Editing by Helen Massy-Beresford)
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