Terra Firma

Deutsche Annington

Description

The Deutsche Annington Immobilien Group (DAIG) is one of the leading German residential property companies with 230,000 leased and managed units nationwide. Its main areas of business are the letting of residential property, active asset management, the acquisition of new residential portfolios as well as the sale of flats to tenants, owner-occupiers or local investors.

Strategy

The rental income and sales proceeds from the DAIG estate represented a strong and predictable source of cash flow. There were few serious contenders for the entire portfolio and no other bidders used securitisation-based analysis techniques or undertook asset-by-asset due diligence to understand the true potential of the properties.

The regional housing companies had originally been run on a "not-for-profit" basis and therefore there was significant scope to improve the efficiency of the housing management operations. DAIG also established a successful tenant privatisation programme and has sold a total of more than 30,000 units since 2002 (including Viterra).

DAIG's acquisition of Viterra in 2005 made DAIG the leading German residential real estate company and generated significant benefits through synergies. DAIG is well positioned to build on its stable core rental cash flow, its cash-generative privatisation programme and its acquisition platform.

Outcome

In 2006, the 82.5% share of DAIG that was owned and managed by Terra Firma entities was transferred to the Terra Firma German property fund, Terra Firma Deutsche Annington (TFDA).

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