The regional focus of the apartments sold by the Adler Group is in northern Germany.
(Photo: imago images / Hoch Zwei Stock / Angerer)
Dusseldorf The real estate investor Adler Group, burdened by high debts, is gaining air by selling a large apartment package to competitor LEG Immobilien.
The Düsseldorf-based company is taking over around 15,400 apartments with a regional focus in northern Germany from Adler for almost 1.3 billion euros, thereby significantly expanding their presence outside the home market of North Rhine-Westphalia, as they announced on Wednesday.
LEG was able to lower the originally expected valuation of the package of around 1.5 billion euros by around 200 million euros, said its boss Lars von Lackum. In addition, by taking over the Adler stake and other shares, it secures access to the Dutch housing company BCP. Adler announced plans to reduce debt, as investors had asked.
“With the acquisition of around 15,400 apartments, mainly in northern Germany, LEG has finally established itself as one of the largest German portfolio holders,” said LEG boss Lars von Lackum. The real estate is supposed to drive the earnings of the Düsseldorf company – LEG increased the forecast for operating earnings (FFO 1) for 2022 to 475 to 490 million euros instead of the previously expected 450 to 460 million euros.
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The board of directors assured that the goal of taking over around 7,000 apartments a year will remain in place. Further apartments could be added via the BCP, which has around 12,000 units, mainly in North Rhine-Westphalia and Leipzig. LEG secured 6.8 percent of BCP shares from Adler, with 24.1 percent from other shareholders. Until September 2022, LEG also has an option to access 63 percent that the Adler Group still holds.
The Adler Group’s indebtedness continued to rise
This announced an “accelerated reduction in the leverage ratio”. The LTV leverage ratio at Adler last increased further at the end of September and was 57 percent. It should drop below 50 percent. Adler had recently come under pressure from the British short seller Fraser Perring. With a view to the accounting methods, the latter had raised allegations against the Adler Group, which had depressed the share price.
Adler had “commissioned external, independent auditors to carry out a comprehensive audit (…)”, the company announced on Tuesday, but did not address the allegations in detail when the quarterly figures were presented. According to the board of directors, auditors from KPMG were involved. When these results would be delivered, however, remained open.
Driven by the multi-billion dollar sale of apartments to LEG, the recently battered Adler shares rose by almost 25 percent to EUR 10.72. The LEG titles were almost unchanged at 123 euros.
More: Adler Group benefits from rising rents – KPMG forensic experts examine transactions