November 8, 2012 / 10:56 PM / 5 years ago

German TLG property sale seen wrapped up only in 2013

BERLIN (Reuters) - The German government expects to book the proceeds of its sale of state-owned real estate company TLG Immobilien only in 2013, not this year as originally envisaged, coalition sources said on Thursday.

Earlier the sources had suggested the sale itself, covering 12,000 flats in former East Germany and some commercial properties, would stretch into next year due to lengthy legal proceedings.

“The process is going ahead as planned,” one source told Reuters, denying a delay in the actual sale but adding that the proceeds of the privatization would only flow into federal government coffers in the new year.

The deal is expected to raise at least 1.7 billion euros ($2.16 billion), making it one of the country’s largest real estate deals of the past year.

German real estate group TAG Immobilien (TEGG.DE) and private equity investor Lone Star are the favorites to buy the portfolio of properties, financial sources have said.

    The Finance Ministry has said both the ultimate buyer and the price are still open.

    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.

    ($1 = 0.7857 euros)

    Reporting by Matthias Sobolewski, writing by Gareth Jones; Editing by Elaine Hardcastle

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