FRANKFURT German real estate group GSW GIBG.DE and its former owner Whitehall Funds are bidding just over 1 billion euros (803 million pounds) for a German real estate portfolio owned by Barclays (BARC.L), two people with knowledge of the matter said.
Real estate group Deutsche Wohnen (DWNG.DE) is also bidding for the 21,000 flats in the portfolio which is known as Baubecon, said the people, confirming a report in German newspaper Financial Times Deutschland.
GSW is interested in 7,000 flats in Berlin, while Whitehall wants the rest of the apartments, which are located in cities like Hanover, Magdeburg and Braunschweig, said the people, who declined to be identified as the process is confidential.
Baubecon fell into Barclays' hands at the end of 2011 when its former owners were unable to pay back loans.
The sale is one of several divestments of large German property portfolios.
Gagfah (GFJG.DE), majority owned by Fortress (FIG.N), said on Thursday it was considering selling all its apartments in Dresden, more than 35,000 flats, a quarter of its total portfolio.
Gagfah values the flats at 1.8 billion euros.
International investors, including private equity, are flocking to the German property market, attracted by a steady rise in values in the last couple of years, which contrasts with the boom-and-bust of Spanish and Irish real estate markets. (nL6E8F59CH) ($1 = 0.7733 euros)
(Reporting by Arno Schuetze, Kathrin Jones and Alexander Huebner,; Editing by Edwina Gibbs)