US group buys 48,000 Dresden homes

The German city of Dresden has sold 48,000 city-owned homes to a US investment group for €1.7 billion ($2 billion).

The German city of Dresden has sold 48,000 city-owned homes to a US investment group for €1.7 billion ($2 billion).

In doing so, it became the first German city to sell all of its public housing in a move that will free it of debt.

A local unit of US investment group Fortress will acquire the city's municipal property unit Woba. The deal also included 1,300 commercial properties.

The sale is the latest in a series of purchases of large German residential holdings by US investment groups attracted by low prices in many German cities, many of which are struggling with their finances.

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Dresden, a city of some 500,000 in Germany's formerly communist east, expects to raise a net €982 million from the sale, enough to eliminate its debt of €741 million.

"Dresden has the incredible chance of becoming the first large German city to be free of debt," Mayor Ingolf Rossberg said after the deal was agreed by the city parliament.