Deutsche Annington

Terra Firma created Deutsche Annington, the largest private residential landlord in Germany


Deutsche Annington was created in 2001 when Terra Firma acquired 64,000 residential properties from the German Federal Railways. The company was set up to own, maintain and rent the properties and sell individual units to tenants and third parties. Through add-on acquisitions, Terra Firma tripled the size of the company, building the largest private residential landlord in Germany with nearly 180,000 owned units.

Investment strategy 

Asset-Backed: German residential real estate is an intrinsically low-risk asset class. The original transaction was made up of approximately 64,000 residential properties geographically spread across Germany. The portfolio generated a steady and reliable rental stream.

Requiring Fundamental Change: The housing had been owned and managed on a not-for-profit basis by ten separate companies. As a result, there was enormous scope for integration and efficiency savings and the professionalisation of an under-managed sector. It also provided the opportunity for people to buy their own homes through socially-responsible privatisation.

Creating value 

  1. Transforming strategy

    • A platform was created to support the ten separate portfolios of assets and Deutsche Annington became an industry-leading platform for the management of its properties. It offered its customers a competitive range of properties with excellent service and strived to further improve service quality, customer focus and efficiency.
    • The owner occupancy rate in Germany was one of the lowest in Europe and Terra Firma believed that there was significant latent demand for home ownership in Germany. Deutsche Annington offered a tenant privatisation programme, giving tenants and third parties the opportunity to buy their own homes at affordable prices. Since 2002, more than 48,000 units were sold.
    • Further portfolio acquisitions enabled Deutsche Annington to replenish its portfolio and build a rental asset base that provided stable, recurring cash flows.
  2. Strengthening management

    • A senior management team was installed shortly after acquisition that was made up of experienced local hires and was able to draw on Terra Firma resources and experience gained from its investment in Annington Homes.
  3. Developing through capital expenditure

    • Deutsche Annington invested heavily in enhancing the attractiveness of its properties to tenants. From 2008 to 2012, the business spent €900m on maintenance and modernisation to improve overall asset quality, increase rents and reduce vacancy rates. It also undertook a comprehensive strategic initiative to increase customer satisfaction across its operations and to enhance operational efficiencies. 
  4. Building through mergers and acquisitions

    • Through add-on acquisitions, Deutsche Annington almost tripled its asset-base and became the largest private residential landlord in Germany, with almost 225,000 owned and managed units nationwide. The €5.4bn acquisition of Viterra in 2005 added nearly 138,000 properties under ownership or management, bringing with it significant efficiency savings through synergies. The added geographic diversity that this brought helped to further de-risk an already low-risk portfolio.
  5. Lowering the cost of capital to create extra upside

    • In August 2006, Deutsche Annington successfully completed a refinancing involving the securitisation of 180,284 residential housing units in the largest-ever European Multifamily Commercial Mortgage-Backed Securitisation (GRAND).
    • In July 2013, Deutsche Annington completed the full refinancing of GRAND through unsecured bonds and loans. Deutsche Annington's debt structure of investment grade bonds, traditional and alternative secured financings was one of the most flexible and cost effective in the European real estate sector.

Status of Investment: The Deutsche Annington investment has been fully realised. In 2006, Terra Firma raised €2.1 billion‎ through TFDA in order to buy 82.5% of Deutsche Annington, along with a minority investor, from TFCPI. TFDA acquired 82.5%, with the balance being acquired by CPI. In 2013, Deutsche Annington completed an IPO and began trading on the Frankfurt Stock Exchange with a free float of 15.6%. In May 2014, with Terra Firma’s ownership of Deutsche Annington at 67.3%, TFDA distributed its Deutsche Annington shares on a pro rata basis to the TFDA investors.

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residential units owned across Germany


invested in increasing customer satisfaction and enhancing operational efficiencies