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Heimstaden’s €187m purchase widens German exposure

Sweden’s Heimstaden Bostad has acquired a portfolio of 1,732 homes in Northern and Eastern Germany for SEK 1.9 billion (c €187 million) and in the process has widened the coverage of its German portfolio, adding six new cities.

The portfolio consists of 107,469 sq m of residential space as well as a 7,574 sq m commercial element, spread across the cities of Halle (30%), Magdeburg (25%), Berlin (15%), Dresden (14%), Rostock (6%), Erfurt (5%) and Leipzig (3%).

Caroline Oelmann, country manager, Heimstaden Germany.

The properties are 100% regulated residential units. The portfolio has an estimated annual gross rental income of SEK 84 million and net operating income of SEK 59 million, with current residential occupancy of 89%.

Germany’s rental market is fully regulated and Malmö-headquartered Heimstaden said that maintaining a balanced exposure to regulated market rent provides stable cash flows with strong downside risk protection.

The company established local operations in Germany in 2020 following the acquisition of a large portfolio in Berlin, and has pursued opportunities to expand and diversify its German portfolio.

“We entered Germany with an evergreen perspective and this acquisition is a unique opportunity to strengthen our presence and provide quality homes throughout six new German cities,” said Caroline Oelmann, country manager, Heimstaden Germany.