German real estate companies raised the most from stock and bond sales since 2006 this year as investors including Fortress Investment Group LLC (FIG:US) and Goldman Sachs Group Inc. (GS:US) took advantage of the country’s housing boom to sell stakes and refinance debt.
Deutsche Annington Immobilien SE (ANN), Gagfah SA (GFJ) and LEG Immobilien AG (LEG) led deals that have raised 10.7 billion euros ($14.4 billion) this year through October, more than triple the total for 2012, according to data compiled by Akselrod Consulting and Barkow Consulting GmbH. In 2006, German property companies raised 19.8 billion euros on capital markets, the firms said in a report today.
“German real estate, especially residential, is attractive to all investor groups this year,” Peter Barkow, co-author of the study and chief executive officer of the Dusseldorf-based firm, said by phone. “It’s the hunt for yield with reasonable risk.”
Investors who bought German buildings during the credit-fueled boom that preceded the 2008 financial crisis are cashing out as Europe’s largest economy recovers. Germany’s benchmark DAX Index has rallied 19 percent this year as the Federal Reserve maintained its bond-buying program and the European Central Bank cut its key interest rate to an all-time low. Demand for German residential assets jumped this year as investors sought safe investments and rents rose.
Gagfah, the residential landlord 48 percent owned by Fortress, issued the largest European commercial mortgage-backed security this year, raising 2.1 billion euros to pay off a previous asset-backed security. Deutsche Annington, a Bochum-based landlord majority-owned by Guy Hands’ Terra Firma Capital Partners Ltd., issued 2.5 billion euros of bonds, according to the report.
While the report said most of the capital was raised in fixed-income markets, Goldman Sachs and Terra Firma raised a combined 1.7 billion euros through the initial public offerings of LEG Immobilien and Deutsche Annington, respectively.
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