TAG Immobilien AG
TAG Immobilie
As reported elsewhere in this issue, TLG Immobilien recently disposed of a portfolio of 29 small retail properties to the Irish group Greenman Investments for €118m. TLG says the assets had become too expensive to manage due to their widespread non-strategic locations.
Listed Hamburg-based residential property investor TAG Immobilien closed on a deal just before Christmas to buy a residential portfolio with about 2,860 apartments and 57 commercial units for about €70.5m.
The assets are in 12 eastern German cities, including Rostock, Dresden and Berlin, where TAG's main other holdings are concentrated, while the single biggest 'blocks' are in Cottbus (416 units) and Chemnitz (660 units), cities in which TAG also has a strong local presence. The total lettable space of the portfolio is 170,000 sqm, with the average rent roll about €8.6m annually.
According to TAG, the housing stock in the new portfolio is mainly of a refurbished standard, and with a vacancy rate of 12.6% and a somewhat complicated provenance, there is plenty of upward potential. The non-refurbished part of the portfolio will require about €3m capex over the coming years, but should ultimately yield a higher annual rent roll of well above €9m. The bulk of the assets will be transferred to TAG's books as early as the 1st January next month.
This latest deal brings TAG's holding up to over 70,000 apartment units and should give a sustainable boost to the operating cash flow and funds from operations, said CEO Rolf Elgeti in a statement. "This deal emphasizes one of TAG's strategic competitive advantages. With such wide geographic dispersion the number of potential competitors is limited, but it plays into our hands because of our existing network and infrastructure. We can leverage our local expertise for the acquisition, and at the same time use our regional network of banking contacts to arrange good financing, as well as benefiting from economies of scale in our administration, and all by using our own existing team of people."
