Citigroup has selected a short-list of final bidders for Citi Property Investors, according to sources. The unit owns commercial property in the US, Europe and Asia valued at $5 billion to $10 billion, one of the people said.
New York-based Citigroup valued the units capital and real-estate assets at $12.5 billion as of June, according to its website.
The bank, which is 27% owned by the US Treasury Department, faces pressure from regulators to sell assets to shore up its balance sheet. US commercial prices have dropped 43% and may fall as much as 55 per cent from the October 2007 peak, Moodys Investors Service said November 23.
This is clearly not a core business for Citigroup, said Gary B Townsend, president of Hill-Townsend Capital LLC in Chevy Chase, Maryland.