Whitehall Real Estate Funds has acquired LEG-Verkauf, a German residential company that owns 93,000 properties in cities such as Cologne, Essen and Bonn.
In a statement today, German state North Rhine-Westphalia said the purchase price corresponded to a value of €3.4 billion ($5.2 billion) being placed on the company.
As part of the deal, Whitehall has agreed to a “social charter” which places restrictions on strategies based on increasing rents or adding value. The charter also necessitates Whitehall to make certain periodic investment in the properties.
The German state revealed its intention to sell in November 2007. More than 30 bidders expressed an interest, 23 of which were invited to take part in the formal sale process. At the end of January, 10 parties made indicative offers before a due diligence stage was finally entered into in May.
The government said the inclusion of the Social Charter was a substantial component of the sales contract which protects the interests of tenants and employees of the company.
The timing of the sale is noteworthy, coming as it does amid a severe downturn in transaction volumes across Europe.
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