Estavis, Adler both expanding portfolios prior to planned merger

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Berlin property manager and privatisation specialist Estavis AG is both hunter and hunted at the moment, as it pursues its expansionary plans to boost its housing portfolio. The listed company is also the takeover target of smaller Adler Real Estate AG.

Estavis has just committed to buy a large real estate portfolio with property holdings throughout Germany, for €160m from an unnamed seller. The portfolio includes around 4,300 units in Bavaria, Berlin, North Rhine-Westphalia, Saxony, and Saxony-Anhalt. The combined floor area totals around 284,000 square metres, and the portfolio generates net annual rent of about € 13.65m.

Estavis said around 3,300 of the units are earmarked for long-term ownership and management, while the roughly 1,000 apartments remaining are to be retailed as condominiums via Estavis’s privatization subsidiary Accentro. CEO Jacopo Mingazzini said at the end of last year the goal is to build up the housing portfolio to 10,000 units over three years. The current total is 6,750 units.

Last month Estavis paid about €6.5m for a further 262 apartments, mainly located in the eastern regions of Chemnitz and Neubrandenburg but with 76 units in Berlin. The portfolio has a 9% vacancy rate and generates €622,600 annually. Typically for Estavis, it will keep the non-Berlin assets and sell those in the capital through Accentro.

Estavis is issuing up to 6,000,000 bearer shares in a convertible bond with a total nominal amount of up to €15m, with a €2.50 unit price, a five-year maturity and a 6.25% coupon, with interest paid quarterly. The bonds started trading in Frankfurt on 27th March.

Meanwhile, fellow-listed property company Adler Real Estate is now officially offering 14 new Adler shares for every 25 Estavis shares, and said it will finance the takeover with a capital increase, to be resolved at an extraordinary general meeting on 22nd April. Adler itself has been rapidly expanding its own housing portfolio, most recently a 2,400 unit portfolio located around Hanover and Braunschweig which it bought from Switzerland-based Corestate Capital. Just this week Adler placed a 5-year debenture paying a 6% coupon with private investors in Germany, raising €50m for investing in the expansion of its own residential holdings.