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COLOGNE, GERMANY-Colonia Real Estate AG is acquiring 51% stakes in two residential real estate companies here that control a combined 10,100 apartment units. The owners of the companies are BGP Investment S.a r.l. and Babcock & Brown Residential Property 1 S.a r.l. & Co. KG.

Approximately 85% leased, the housing units are located in the cities of Aachen, Freiburg, Hamburg, Kiel, Koln, Osnabruck und Salzgitter. The total amount of rentable space is 6.7 million sf.

Both parties have agreed not to reveal the purchase price, which includes the assumption of an unknown amount of debt that carries a 3.87% interest rate. The annual net rental income from the properties is approximately euro 30 million (US $39.4 million).

Colonia has the right to acquire the remaining 49% of the companies until Nov. 30, 2008. After that, the sellers have the option to force the sale through June 30, 2009. The value of that transaction also was not released.

Colonia is a listed real estate and investment management group. Company CEO Stephan Rind says the transaction would more than double its portfolio to approximately 20,000 units, which is its goal for 2007. The transaction also will help diversify the company's portfolio, which has heretofore been concentrated in Hamburg and Lower Saxony.

BGP Investment S.a r.l. is a joint venture of GPT Group, one of Australia's largest listed property companies, and Babcock & Brown Australia. Babcock & Brown Residential Property 1 S.a r.l. & Co. KG is a fund sponsored by Babcock & Brown, a global investment advisory group.

Instant Insights /

Colonia Buying Majority Stake in 10,100 Apartments

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