FRANKFURT Oct 23 German real estate group TAG
Immobilien and private equity investor Lone Star are
likely to buy a portfolio of properties that the German
government is selling, two people familiar with the matter said.
TAG looks set to pay around 500 million euros ($653 million)
to acquire the 12,000 flats of state-owned TLG Immobilien, while
Lone Star is likely to scoop up 300 commercial properties for
slightly over 1 billion euros, they added.
The two groups outbid trade rivals like KWG Kommunale Wohnen
and investors like Blackstone and Cerberus
The transaction will likely be the country's largest real
estate deal this year, surpassing the 1.4 billion euro
acquisition of 22,000 flats that a group led by Patrizia
Immobilien bought from public-sector bank LBBW
International investors are vying for property in Germany,
which has avoided the boom-and-bust prices of Spain or Ireland
and which has seen stable increases in property values in the
last couple of years.
The flats the German government is putting up for sale are
all located in eastern Germany, have stable rental income and a
low vacancy rate of only 3 percent.
TLG, TAG, Lone Star and Barclays, which is managing
the sale, declined to comment.
A spokeswoman for Germany's Finance Ministry said that talks
were ongoing and that the ultimate buyer and price were still