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Lone Star delivers deal in Germany

The US private equity firm has agreed to buy a €1bn portfolio from the logistics subsidiary of German mailing company Deutsche Post.

Lone Star has scooped a €1 billion ($1.5 billion) deal with Deutsche Post World Net to acquire 1,300 properties, mainly in Germany.

Deutsche Post revealed the transaction in a statement today, adding that the cash payment will be made in several tranches with the largest of them expected to be made by the end of the year.

The sale is mostly structured as a sale and leaseback transaction of logistics properties located within Germany and is part of a pledge by the Deutsche Post to raise at least €1 billion from its real estate by 2009. The company has sold €350 million of property since last November.

Dallas-based Lone Star has been an active investor in German real estate to date, mostly investing in large non-performing loan portfolios in the first half of the decade when it took advantage of Germany’s efforts to restructure its banking base. At the end of 2005, Lone Star took over ailing bank Allgemeine Hypothekenbank Rheinboden, which it is currently turning into a specialist commercial property lender.

It has not all been smooth for Lone Star in Germany, however. It suffered the ignominy of being branded a ‘locust’ by the then German vice chancellor Franz Müntefering when he attacked private equity firms acquiring national businesses.

In South Korea the firm has also suffered. In February, Lone Star’s South Korean representative Paul Yoo was sentenced by a court to five years imprisonment and the firm fined KRW25 billion ($26 million; €18 million) after being found guilty of stock manipulation during the 2003 acquisition of a 51 percent stake in the credit card division of the Korea Exchange Bank.