DGAP-News: ADLER Real Estate AG: EUR 141.1m Retail Asset Disposal

ADLER Real Estate AG: EUR 141.1m Retail Asset Disposal

- ADLER's subsidiary Brack Capital Properties N.V. sells a further EUR 141.1m gross asset value (GAV) / (29%) of its retail assets. To date, retail disposals total EUR 321.7m, 67% of the retail assets held by BCP.

- The remaining EUR 158.2m of retail assets will be sold opportunistically during 2019/2020

- Debt of EUR 73m to be repaid resulting in a reduction of ADLER's LTV by c.30bps

Berlin, 1 July 2019 - Brack Capital Properties N.V. (BCP), a c.70% subsidiary of ADLER Real Estate AG, has entered into a binding sale and purchase agreement with REDOS acting on behalf of Union Investment Institutional Property GmbH to dispose of 11 retail assets. These assets are located in Bad Aibling, Vilshofen, Dreieich, Kassel, Laatzen, Leverkusen, Dusseldorf, Koln, Bad Segeberg, Emden and Witten. Closing remains subject to customary closing conditions.

The disposal of these 11 retail assets is in line with ADLER's strategy to remain a pure play German residential real estate company.

Including the first sale of BCP's retail portfolio, announced on 25 March 2019, ADLER has sold 67% of BCP's total retail portfolio. The first portfolio sale was carried out at a premium of 7.6% to ADLER's equity book value (+2.7% on GAV adjusted for DTL savings), while the second disposal is being sold at a discount of 8.8% to GAV. This represents GAV of EUR 321.7m, sold at 2.3% discount to ADLER's book value.

The remaining retail assets currently valued at GAV of EUR 158.2m will be sold opportunistically in 2019/2020.

The proceeds will be used to repay EUR 73m of bank debt to further strengthen the balance sheet with LTV of ADLER being positively impacted by c.30 bps.

Kempen acted as sole financial advisor on the sale.

Berlin rent freeze

Following the announcement by Berlin senate to freeze rents in Berlin a couple of weeks ago, ADLER would like to highlight that it only has a very limited exposure to Berlin and this potential effect on rental income would therefore be minor.

Overall, ADLER has 1,699 units in Berlin which contribute EUR 7.7m to net rental income (NRI) and account for GAV of EUR 229.8m. This represents exposure of 3.2% based on NRI and 4.6% on GAV. Riverside development with EUR 451.8m is exempt from the rental freeze.
 

Tomas de Vargas Machuca, ADLER's Co-CEO, commented: "When we acquired BCP our intention was to dispose of its retail portfolio, so as to remain a pure play German residential real estate company. This latest sale demonstrates our discipline in executing this strategy. The two disposals to date have been achieved at a small discount to ADLER's current book value, but represent a premium to BCP's historic book value. Importantly the sale demonstrates the progress we are making to reduce our debt and achieve ADLER's LTV target."

Maximilian Rienecker, ADLER's Co-CEO added: "BCP intends to continue to dispose of the remaining parts of its retail portfolio amounting to EUR 158.2m. These assets have already received significant interest from institutional, private equity and private investors."

For enquiries:

Tina Kladnik
Head of Investor Relations
ADLER Real Estate AG
Tel: +49 162 424 6833
t.kladnik@adler-ag.com