Tomkin loses out on €3bn German deal to US bank
A low-profile, century-old Dublin property company headed up by Dublin City University lecturer David Tomkin has lost out to investment bank Goldman Sachs in a €3bn-plus bid to buy a portfolio of 93,000 apartments in Germany. But the company is understood to be circling other property assets in Europe's largest economy as its federal states look to balance their budgets.
The auction of apartments by the western state of North Rhine-Westphalia is believed to have initially attracted 85 expressions of interests, but only resulted in 13 firm bids.
Tomkin Estates, which was set up in 1900 as a series of family trusts but is now controlled and chaired by Dr David Tomkin, a law lecturer in Dublin City University, was among three suitors to make it to the short list. Tomkin Estates' managing director Peter Mahon is also a shareholder.
Goldman Sachs won the race, agreeing to pay €3.4bn for the apartments -- understood to be some €200m above what Tomkin Estates had pitched. Tomkin's offer was financed by the Royal Bank of Canada.
Deutsche Annington, a property company controlled by UK investor Terra Firma, was the remaining final bidder for the portfolio, which included apartments in cities such as Cologne, Essen and Bonn.
Landesentwicklungsgesellschaft Nordrhein-Westfalen, the holding company for the property and the structure being sold, earned €16.8m in 2006 on rental revenue of €553m, according to reports.
"We have come across more attractive opportunities over the last few months in Germany, which we will be pursuing in the months ahead," Dr Tomkin said yesterday.
The German property market offers investors "stable returns with little risk", according to Lars Dierkes, an analyst at Investment Property Databank. "As long as rents increase faster than interest on loans, we'll see bidders queue up for these properties."