The real estate investor X + Bricks has secured real estate worth around one billion euros.
(Photo: dpa)
Frankfurt The real estate company X + Bricks, which became famous through the purchase of the Metro supermarket chain Real, is planning an IPO, according to financial circles. The company is preparing a placement of new shares for around 500 million euros on the Frankfurt Stock Exchange, said several people familiar with the matter. The company’s equity could be valued at around one billion after the deal.
If the market environment is favorable, the IPO could take place from the first quarter, otherwise later. According to the insider, Goldman Sachs and Jefferies are organizing the transaction, and Rothschild is acting as what is known as an IPO advisor.
A spokesman for X + Bricks said that strategic options for financing the Real acquisition are currently being examined as part of its growth strategy. In this context, it is customary to mandate external consultants. However, no decision has yet been made. “We will continue to evaluate our options in the coming months.” The banks declined to comment.
Behind X + Bricks is the real estate manager Sascha Wilhelm, who headed the Corestate company from 2015 to 2018. Under his leadership, the company’s assets under management quadrupled to over 20 billion euros. Wilhelm already has experience with IPOs: In 2016 he listed Corestate on the stock exchange, at times the company was listed in the SDax.
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Last year, the Metro retail group sold its Real supermarket chain, including 80 properties it owns, to the Russian SCP Group, with X + Bricks acting as a partner. Behind SCP is the Russian Sistema PJSFC, which also secured the financing of the takeover.
A bad business development at Real had led to a loss of value and high depreciation, whereby the inflow of funds for Metro only amounted to 300 million euros, although the property value was already estimated at over 900 million euros.
Real transaction doubles the value of the real estate portfolio
Metro has been directing its business entirely towards wholesaling for several years, so Real no longer had a place under the umbrella of the Düsseldorf group. The group had also separated from the majority stake in the China business.
SCP sold the operation of the majority of the 275 Real stores to competitors such as Kaufland and Edeka and had declared that it would only continue to operate a small part of around 50 stores for a transition period of two years, restructuring hard in the process.
In the summer of this year, X + Bricks then acquired a portfolio of 34 former Real properties, mainly located in West Germany, from SCP for around one billion euros. According to July, the buildings with a total rental area of around 425,000 square meters have long-term leases for an average of 16 years with retail chains such as Kaufland, Edeka and Globus. With the transaction, X + Bricks doubled its real estate portfolio to a total value of over two billion euros.
If the market environment turns out to be unfavorable for an IPO, other options such as the inclusion of family investors could be realized, it said in the circles. IPOs in Europe had recently struggled.
At the beginning of the month, two real estate companies, the French Icade Santé and the British Responsible Housing REIT, canceled planned IPOs. Because of fears of rising interest rates in the US, some investors are cautious when it comes to investing in newcomers to the stock market, especially in the real estate sector.
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