RREEF, the real estate arm of Deutsche Bank, and Italian company Pirelli have bought German residential property company BauBeCon for around €1.7bn (£1.1bn) from US private equity fund Cerberus.
The deal will be financed with debt and €350m (£235m) of equity. RREEF has a 60% interest in the deal. BauBeCon has a property portfolio which comprises around 27,000 apartments mainly in Berlin, Hanover and Magdeburg.
Pirelli will also buy 100% of the operating part of the company which has around 260 employees and manages around 52,000 apartments, including the apartments that are now owned by RREEF and Pirelli.
RREEF and Pirelli said their joint strategy would be to ‘enhance value in the medium-long term through the integration of other residential portfolios’.
Chris Papachristophorou, co-chief executive officer for RREEF Europe, said: ‘This acquisition represents a continued expansion process as part of our strategy to build a large and diversified real estate portfolio in Germany supported by a strong asset management platform.’
The deal has been approved by Germany’s antitrust authorities and will complete at the end of the month.
Deutsche Bank advised the joint venture.