German IPO raises more than €1.3bn Real estate group LEG Immobilien has raised more than €1.3bn in the second-largest German initial public offering in five years, after its shares were priced in the middle of the expected range at €44. The deal comes amid hopes of a revival in the European IPO market following 2012, which was the second-worst year for deal activity since the financial crisis. There are 14 deals planned in Europe this year already, according to Dealogic. LEG Immobilien owns 91,000 homes in North Rhine-Westphalia, Germany's most populous state, and is being sold by Goldman Sach's Whitehall property funds at a time of strong investor interest in German housing. A combination of low vacancy rates along with stable rents and income streams has attracted pension funds, insurers and other long-term investors to the German sector. The deal was about four times subscribed, according to bankers involved, with 70 per cent of the demand coming from UK and US investors. The initial range was €41 to €47, later narrowed to €43 to €45. "This deal attracted significant demand from both euro and US funds, with investors focused both on the strong cash flow of the company and potential for future growth," said Jim Garman, global co-head of real estate investing at Goldman Sachs. Almost €100bn of private funds flowed back into the eurozone's periphery late last year, according to ING, after action by the European Central Bank encouraged reinvestment in crisis-hit countries. LEG is the largest European real estate offering since Russia's $1.9bn PIK Group in May 2007 and the largest real estate IPO globally since China's Global Logistic Properties $3.0bn IPO in October 2010, according to Dealogic. It is also the largest in Germany since Telefónica's German unit raised €1.45bn in October. A number of other property-based initial public offerings have been proposed this month, with housebuilder Crest Nicholson announcing plans last week for a £500m offering. Goldman's Whitehall property funds own 89 per cent of LEG, with the rest held by Perry Corp, the hedge fund. The partial exit from LEG for Goldman comes after its Whitehall unit in December said it would divest part of its German commercial property portfolio, agreeing a €1.1bn deal to sell 17 department stores to an Austrian investor. Last year, Terra Firma, the private equity group controlled by veteran investor Guy Hands, announced plans to refinance the €4.3bn of loans secured against its portfolio of 180,000 apartments. The refinancing paves the way for what is likely to be the largest stock market flotation of a German residential property business.