BERLIN-Colonia Real Estate AG of Cologne, Germany, is acquiring 2,199 residential units, 150,700 sf of office space in the Greater Berlin area for $95.15 million. The transaction is expected to close before the end of the year.
The portfolio was acquired for a multiple of 10.9 times the net rental income of around $8.67 million (euro 6.61 million) per year. Colonia says in a prepared statement that in recent years the portfolio has been substantially redeveloped and renovated at a cost of more than $97 million (euro 74 million). Vacancy in the portfolio is approximately 10%, according to Colonia.
The acquisition will increase Colonia's Berlin-area portfolio to more than 4,700 units and raises its overall total to approximately 9,000 units. All of Colonia's metro-area properties are managed by its asset management subsidiary, Resolution GmbH.
'We see further upside potential on residential real estate in Berlin and we are convinced about the value potential of the currently acquired portfolios," says Colonia CEO Stephan Rind in a prepared statement. "Cost reductions and an active management will reduce vacancy over time and enhance cash-flows substantially."
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