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The German residential property market is not overheating despite record transaction volumes in 2011 and several large portfolios on the market, according to listed Berlin apartment owner GSW.

'The market is not overheating,' GSW CEO Thomas Zinnocker told PropertyEU at Mipim in Cannes.

'We don't have the situation of 5-6 years ago when some very high prices were paid by some international investors. The demand is there but the limited availability of finance is a moderating factor,' he said.

GSW, Zinnocker said, is sitting 'like a hunter' eyeing opportunities but it is under no pressure to make a big acquisition at the moment. Its last big deal was in November 2011 when it completed the purchase of 4,800 apartments for EUR 330 mln from Gagfah, the largest listed residential property owner in Germany. GSW paid 34% of the investment volume in cash and the remainder in bank debt.

Large portfolio deals propelled German residential volumes to more than EUR 4 bn in 2011, over 60% up on the 2010 level as international and domestic investors sought exposure to the market.

This year has already seen listed company Patrizia acquire Landesbank Baden-Württemberg’s (LBBW) portfolio of 21,000 residential units in a joint venture for EUR 1.4 bn.

Patrizia confirmed it was eyeing the GBW residential portfolio which German state-owned bank BayernLB is expected to sell off in a slew of large sales due to hit the market in the coming months.

BayernLB is believed to be seeking a price of around EUR1.5 bn for its GBW Gruppe portfolio of more than 32,000 residential units.

Other deals that are also reportedly on the cards include the sale of bankrupt property group Speymill Deutsche Immobilien Company’s portfolio of 26,000 residential units. Receiver for the portfolio Ernst & Young is hoping to get around EUR950mln from the sale, according to those who track the market. An Ernst & Young spokesman told PropertyEU that the process was ‘ongoing’ but declined to provide further details. Matthias Moser, head of Patrizia’s alternative investments arm, told PropertyEU that Patrizia is eyeing the GBW portfolio but not the Speymill portfolio as it is less interested in distressed assets.

Also believed to be for sale - albeit off market - is the BauBeCon residential portfolio comprising around 23,000 units, once owned by Cerberus, but which was sold to Pirelli Real Estate - or Prelios - in 2007. Around 1,800 units in the portfolio were already sold to Conwert Immobilien Invest in March 2011.