TLG IMMOBILIEN GmbH, a wholly-owned Federal Government company, has been sold for € 1.1 billion to US private equity fund Lone Star. The deal is the largest real estate transaction in Germany this year and the Federal Government’s biggest privatisation in five years.
TLG IMMOBILIEN is the leading real estate company in eastern Germany. Its portfolio comprises about 780 commercial properties across different segments, ranging from office buildings, shopping centres and industrial parks to hotels and retirement homes.
“LONE STAR invests globally in distressed assets. Since the establishment of its first fund in 1995, Lone Star has organized ten private equity funds with aggregate capital commitments totaling over $33 billion.
Federal Minister of Finance Wolfgang Schäuble commented: “Following the privatisation of TLG WOHNEN, the sale of TLG IMMOBILIEN has now been successfully concluded as well. From the Federal Government’s point of view, current market conditions meant that it was an ideal time to sell the TLG Group and get a good price for taxpayers. The outcome has confirmed this assessment. The deal will open up new scope for investment and strengthen regional economic structures in eastern Germany.”
LONE STAR Star emerged as the winner of an open, transparent and non-discriminatory bidding process. The competition was intense until the very end. Lone Star plans to continue the business and strategically develop its portfolio. It sees TLG IMMOBILIEN as a platform for its property activities in Germany.
The buyer was able to secure full financing – a feat that has not been accomplished in years for a commercial property portfolio of this size in Germany. The Federal Government bears no financing risk, so the BMF.
With this deal, both parts of TLG have now been successfully privatised. Early this year, TLG was split into two units for commercial and residential real estate to facilitate a sale to different buyers. This strategy has proven to be effective, and it is clear that the timing of the transaction was right. TLG IMMOBILIEN was set up in 1991 as a subsidiary of the government agency created to privatise GDR assets.
After completing these tasks, TLG IMMOBILIEN was able to build a new and attractive portfolio in eastern Germany from 2000 onwards. As an active portfolio manager, it focuses on high-growth regions in eastern Germany. It has been recording profits for ten years and concluded the past financial year with its best operating results since it was established more than two decades ago.”
Die TLG IMMOBILIEN ist auf Ostdeutschland spezialisiert mit Niederlassungen in Berlin, Brandenburg und Mecklenburg-Vorpommern, Sachsen, Sachsen-Anhalt und Thüringen.(Quellen:lonestarfunds.com./ tlg/BMF)