The German government has made a whopping 1.1 billion euros ($1.4 billion) from selling off TLG commercial property group. The deal closes one of the last chapters of privatizing former communist East German industries.
TLG's commercial properties worth 1.1 billion euros had been sold to US private equity investor Lone Star, the German Finance Ministry said Wednesday, in what was the biggest privatization in Germany in half a decade.
The approximate 780 properties include office buildings, shopping centers and restaurants, which had once belonged to the former East German communist state before ownership changed to the German state after unification in 1990. The privatization had originally been scheduled to take place in 2008, but was called off due to weak property markets in the wake of the financial crisis.
Speaking of a good profit for taxpayers, German Finance Minister Wolfgang Schäuble noted that the current market situation had been ideal for selling off TLG group - a reference to rising prices in Germany's commercial and private property markets.
Under the deal, the German state will receive about half of the purchasing price, while the other half will be used by Lone Star for cancelling old debt at TLG.
Lone Star didn't comment on the deal, but the German Finance Ministry said the investor would seek to keep TLG in business to further develop the company's portfolio. However, analysts said they were expecting Lone Star to sell off the properties individually.
The TLG sell-off follows the privatization of about 11,000 East German state-owned apartments in November, which were bought by Hamburg-based property group TAG and brought the government 471 million euros.
uhe/kms (Reuters, dapd)