Vonovia to sell stake in a residential portfolio to Apollo
Real Estate

Vonovia to sell stake in a residential portfolio to Apollo

The largest real estate company in Germany announced on Thursday that Vonovia had reached an agreement to sell a small portion of its Suedewo residential property to American investor Apollo for 1 billion euros ($1.10 billion).

The deal could send a message to the faltering German real estate market, where there haven't been many significant sales in recent months due to high interest rates and declining home values. The deal values the Suedewo portfolio in Baden-Wuerttemberg in the southwest at 3.3 billion euros, which is less than 5% less than Suedewo's fair value as of December 31, according to Vonovia.

The German company, which will continue to manage the portfolio of more than 21,000 residential units, acknowledged that it was under no duty to exercise the long-term buy-back option, which has an internal rate of return (IRR) of 6.95% to 8.30%, including dividends.

With the money received, Vonovia will produce around half of the 2 billion euros in free cash flow from asset sales that were anticipated.

"Not the big bang, and sold 5% below recent fair value, but should be viewed as a first step in the right direction," a local dealer said in response to the news.

At 07:33 GMT, Vonovia's shares climbed 2.6% to the top of Germany's blue chip index. The group planned to sell 13 billion euro worth of properties during the summer in order to ensure access to finance in the middle of the real estate market turmoil.

The largest real estate company in Germany announced on Thursday that Vonovia had reached an agreement to sell a small portion of its Suedewo residential property to American investor Apollo for 1 billion euros ($1.10 billion). The deal could send a message to the faltering German real estate market, where there haven't been many significant sales in recent months due to high interest rates and declining home values. The deal values the Suedewo portfolio in Baden-Wuerttemberg in the southwest at 3.3 billion euros, which is less than 5% less than Suedewo's fair value as of December 31, according to Vonovia. The German company, which will continue to manage the portfolio of more than 21,000 residential units, acknowledged that it was under no duty to exercise the long-term buy-back option, which has an internal rate of return (IRR) of 6.95% to 8.30%, including dividends. With the money received, Vonovia will produce around half of the 2 billion euros in free cash flow from asset sales that were anticipated. Not the big bang, and sold 5% below recent fair value, but should be viewed as a first step in the right direction, a local dealer said in response to the news. At 07:33 GMT, Vonovia's shares climbed 2.6% to the top of Germany's blue chip index. The group planned to sell 13 billion euro worth of properties during the summer in order to ensure access to finance in the middle of the real estate market turmoil.

Next Story
Real Estate

The Only Way is Up!

In 2025, India’s real-estate market will be driven by a confluence of economic, demographic and policy-driven factors. Among these, Boman Irani, President, CREDAI National, counts rapid urbanisation, the rise of the middle class, policy reforms like RERA and GST rationalisation, and the Government’s decision to allow 100 per cent FDI in construction development projects (including townships, housing, built-up infrastructure, and real-estate broking services).In the top metros, especially Bengaluru, followed by Hyderabad and Pune, the key drivers will continue to be job creation a..

Next Story
Building Material

Organisations valuing gender diversity achieve higher profitability

The building materials industry is projected to grow by 8-12 per cent over the next five years. How is Aparna Enterprises positioning itself to leverage this momentum and solidify its market presence?The Indian construction and building materials industry is projected to witness significant expansion, with estimates suggesting an 8-12 per cent compound annual growth rate (CAGR) over the next five years. This growth is fuelled by rapid urbanisation, increased infrastructure investments and sustainability-focused policies. With India's real-estate market expected to reach $ 1 trillion by 2030, t..

Next Story
Real Estate

Dealing with Delays

Delays have beleaguered many a construction project in India, hampering the country from building to its ability and potential, and leading to additional costs incurred by the contractor. The reasons for delayIn India, delays mainly occur owing to obtaining statutory approvals, non-provisioning of right of way, utility diversion and approval of drawings and design. Delays are broadly classified based on responsibility and effect. Excusable delays arise from factors beyond the contractor’s control, such as force majeure events or employer-induced delays. These delays generally entitle th..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?