Germany’s biggest residential property owner, Deutsche Annington Immobilien, on Tuesday said it would spend €320 million ($420 million) to buy a rival in a deal that underlined the emerging strength of the Continent’s largest real estate market.
The company said it will acquire more than 5,000 apartments and 210 commercial units in Berlin and key east German cities from CitCor Residential Group, a venture involving Citigroup, which like Annington is also based in Düsseldorf.
About half the properties Deutsche Annington brought are in Berlin and the rest are in eastern German cities including Dresden, Jena, Leipzig and Erfurt.
The deal was worth €320 million ($420 million), the Deutsche Annington investor relations manager, Michael Tegeder, told Handelsblatt Global Edition.
Emanuele Boni, a real estate expert and investor who is based in Berlin, said Deutsche Annington’s acquisition should be taken as a sign of faith in the German property market.
“This is the largest owner of real estate in Germany. If anyone knows how the real estate market is going in Germany, it is Deutsche Annington,” he told Handelsblatt Global Edition.
Demand for property is soaring across Europe as the low-interest rate environment frees capital in search of solid investment returns unavailable on the financial markets.