Citigroup in talks to sell real-estate investment unit

Under pressure from regulators to unload assets, Citigroup is in negotiations to sell Citi Property

Apollo Global Management and Australia-based Macquarie Group are said to be the front-runners in the bidding.

According to the bank's web site, the global real-estate investment unit's capital and real-estate assets were $12.5bn as of June 2009. The unit reportedly owns commercial property worth approximately $10bn in the US, Europe and Asia.

Moody's Investors Service predicted that the US commercial prices, which have already plunged 43 per cent, would further fall from the October 2007 peak. Against this backdrop, the New York-based bank, which is 27 per cent owned by the US Treasury Department, is facing pressure from regulators to sell assets and reduce debt.

Douglas Ciocca, MD of Kansas-based Renaissance Financial, said: "It's a difficult time to get a reasonable price for that division."

Gary Townsend, president of Hill-Townsend Capital, a US-based private investment group, said: "This is clearly not a core business for them. To the extent they sell something for more than what's on their books, that raises capital."