In a multibillion-dollar deal, Frankfurt's Patrizia has agreed to buy London's Tamar Capital Group.

Patrizia Immobilien AG (FRA: P1Z), headquartered in Frankfurt, will become one of Europe's largest commercial real estate operators as a result of the transaction. Tamar Capital Group, a London-based real estate investment and asset management firm, has agreed to be purchased by the German firm.

The purchase price was not revealed in a statement from publicly traded Patrizia, but global real estate analysts believe it would be in the nine-figure range. doha property finder

Patrizia said in a prepared statement that the transaction would add around £560 million ($904 million US) in industrial, office, and retail real estate assets to its portfolio.

In January 2013, Tamar, based in London, will become a fully owned subsidiary of the German firm. Financial regulators in the United Kingdom must also accept the contract.

Tamar specializes in commercial real estate, with an emphasis on office, retail, and industrial properties. Tamar Capital claims to handle approximately £570 million ($921 million) in real estate. One British pound is worth $1.62 in the United States.

Wolfgang Egger, Patrizia's CEO, claims that the company's growth in Europe is on track. The acquisition would give Patrizia access to the Irish, French, German, Belgian, and Scandinavian real estate markets, in addition to the United Kingdom.

Patrizia's expansion plans include a partnership with a Frankfurt-based firm that began operations in Germany in February of this year. Patrizia has agreed to purchase LBBW Immobilien GmbH, the real estate arm of Landesbank Baden-Württemberg, which owns 21,000 apartments across Germany.

The deal was worth €1.44 billion (£1.17 billion or $1.89 billion in US dollars). As a result, the purchase will be Germany's largest real estate transaction since 2008.

Property in the United Kingdom continues to attract international investors, owing to a weak pound, a reputation as a safe haven, and returns that outperform financing costs.

 

Ireland's first real estate investment trust (REIT) is launched.

The first real estate investment trust in Ireland is about to be launched.

Green REIT Plc intends to raise €200 million via an IPO to concentrate on commercial real estate in Dublin.

The legislature formally approved real estate investment trusts earlier this year, in a step that many hope would aid the country's property market recovery.

Ireland was one of the worst-affected markets after the global financial crisis, with property prices falling by more than 60% from their peak. More than four years later, the market appears to make a comeback.

The National Asset Management Agency (NAMA) in Ireland recently announced promising signs of market recovery. NAMA was founded in 2009 with the aim of removing bad loans from Irish banks. Several foreign funds expressed interest in a portfolio of loans backed by Irish real estate, according to the agency.

The sector has a long way to go until it reaches full recovery, but many hope that the launch of REITs will hasten the process. REITs, a popular investment instrument in the United States, the United Kingdom, and other global markets, are appealing to foreign investors, private equity firms, and pension funds because they include tax benefits and exposure to a variety of property. It will also provide an incentive for smaller investors to invest in prime real estate.

According to Bloomberg, the Green REIT is targeting annual returns of 10% to 15%. On the London and Irish stock exchanges, the shares will be traded.

Green REIT chairman Gary Kennedy said in the announcement, "The establishment of Ireland's first REIT is positive for the Irish commercial-property market, providing stability with long-term resources, and reflects a major contribution to Ireland by a proven team."

Bloomberg announced that Green Property REIT Ventures Ltd. would be the sole investment manager. On July 18, the Green REIT will begin trading.