€560m portfolio sale brings Vonovia near 2023 sales target

Vonovia, Germany’s largest real estate group, has sold a residential portfolio comprising a total of 1,350 units to CBRE Investment Management for around €560 million.

The portfolio, all newly built or delivered in the next few months, comprises five buildings of which two are located in Berlin, two in Munich, and one in Frankfurt.

[Image: Deborah Cortelazzi/Unsplash]

The sale is expected to close during the second and third quarter of 2023.

News of the deal comes soon after Vonovia announced what was the largest residential deal in Germany for some time with the sale of a minority stake in its Südewo portfolio to private equity firm Apollo Global Management for €1 billion.

Apollo is acquiring roughly 30% of the portfolio of 21,000 homes in the southwestern German state of Baden-Württemberg at a discount of 5% to its valuation at the end of last year. The Südewo portfolio is currently valued at €3.3 billion.

“A sale of this size to a renowned company like CBRE Investment Management once again underlines the intrinsic value of our portfolio” Vonovia CEO Rolf Buch said of the latest deal. “Following the joint venture partnership, this is the second success in a short period of time. Amounting to a total of more than €1.5 billion, we already have almost reached our sales target for this year.”

“Furthermore, we assess the results of our negotiations as a positive signal for the entire business: after a very difficult first quarter 2023 with little movement, the market is cautiously opening. Buyers and sellers can come to an agreement again. This in itself is a cause for optimism.”

As a result of the transactions, Vonovia is able to cover this year’s refinancing needs in full, as well as a main part of the refinancing due in 2024. The acquisition takes CBRE IM’s residential assets under management in EMEA to around €6.8 billion for its direct real estate strategies.

“With long-term structural drivers, the residential sector is proving attractive to investors, and we will continue to seek investment opportunities with the aim to invest €1.5 billion across Europe this year,” said CBRE Investment Management’s head of EMEA residential operator division Marius Schöner.

The firm’s head of transactions Germany commented that the firm remains focused on finding either standing investments or developments opportunities in the large metropolitan areas in Germany.

With this acquisition, CBRE IM’s residential assets under management in EMEA are circa €6.8 billion2 for Direct Real Estate Strategies.