Deutsche Annington expected to swallow Vitus Immobilien by year-end

We’ve almost been expecting to get confirmation of a done deal before Christmas, but at the time of writing nothing has been signed, to the best of our knowledge. A number of reports including from Reuters and Bloomberg suggested earlier this month that listed German housing investor Deutsche Annington was on the cusp of signing an agreement to buy Vitus Immobilien S.a.r.l, a German residential landlord part-owned by private equity investors Blackstone Group and Round Hill Group. A deal is likely to value Vitus at about €1.3bn.

The Bochum-based Annington, which listed on the stock market in July after a stumbling start, has made clear that it plans further growth, both organically through a major upgrading programme of its existing holdings, but also through bolt-on acquisitions, for which it said it could now muster up about €4bn including financing for the right portfolios.

Round Hill, along with a consortium of co-investors including Deutsche Bank and insurer Aviva, bought a majority stake in Vitus Immobilien in 2007 from Blackstone for €1.6bn, leaving 25% in Blackstone’s hands. Blackstone, in turn, had itself paid about €1.39bn in 2004 to buy Vitus from an assortment of municipal housing companies in North Rhine Westphalia and northern Germany. Round Hill has been thought to be looking to exit its position for some time.

The Moenchengladbach-based Vitus owns about 30,000 formerly German railway- and government-owned apartments across western German cities including Bremen, Düsseldorf, Wuppertal and Kiel, and like Annington itself, manages a further 20,000 apartment. The company was in the news last year when it refinanced all its senior debt with a €745m CMBS securitisation, managed by Deutsche Bank London, in what was the first post-crisis continental European CMBS.