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DENVER-The German multifamily market remains very attractive to apartment REIT Archstone-Smith. The Englewood, CO-based firm closed on its deal to acquire Deutsche WohnAnlage GmbH for approximately $649 million (euro 518 million).
Archstone acquired DeWAG through its wholly owned subsidiary Archstone Europe Trading BV. The deal brings Archstone's German portfolio to 7,604 units. Thisdeals follows Archstone's acquisition of an 822-unit portfolio in Mannheim, Germany in the fourth quarter of 2005 and its acquisition of a 657-unit portfolio in Berlin in May.
Officials from Archstone were not available for comment, but in an official release, R. Scot Sellers, chairman and CEO of Archstone says the firm continues "to see opportunity in the German residential real estate market." Sellers says the country's low home ownership rate, low rental rates and strong rental affordability rate, factor into Archstone's bullishness on the region.
Sellers says with the addition of DeWAG, Archstone adds a strong management team as well as a "pipeline of new acquisitions." DeWAG specializes in the acquisition, long-term ownership and re-sale or privatization of upscale residential properties in the major metropolitan areas of Southern and Western Germany. Its portfolio has grown from approximately 200 housing units in December 2001 to more than 6,100 housing units in more than 35 different locations across Germany.
The properties in the portfolio are located close to transportation outlets, near employment centers in German metropolitan areas, including Rhein-Main (Frankfurt/Wiesbaden), Dsseldorf, Munich, Nuremberg and Aachen. The individual units have an average floor space of 710 sf, which is considered above average in size, in the German multifamily market.
Archstone-Smith has a current market value of $19.3 billion with properties in major US cities as well as Europe. According to second quarter results, the firm is a net buyer so far this year, having acquired $968.7 million of apartment communities, while selling $688.1 million of its portfolio. Archstone also has $1.5 billion of apartment communities under construction, totaling 9,879 units.
The company's stock closed at $52.47 yesterday. That was down 1.34% from the day's opening number.
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