Ado Properties succeeds with IPO on second attempt
We wrote in last month's issue of REFIRE that the Berlin-based Ado Properties had postponed their planned June IPO given the volatility on stock markets caused by the Greek crisis. Within three weeks the company returned to the market and succeeded in getting its flotation away, albeit at the very lowest end of its price spectrum. Ado issued shares for €465m, of which a gross €200m will accrue to the company. Trading in the shares started on 23rd July.
The company had indicated a previous targeted range of €20-25, but ultimately placed 22.8 million shares at €20.00, putting an effective market capitalisation on the company of about €700m. The shares have since slid to just below their launch price.
By listing, ADO Properties gets fast track inclusion in FTSE EPRA/NAREIT Global Real Estate Index Series. The company will be included effective from 30th July 2015 in the FTSE EPRA/NAREIT Global Index, FTSE EPRA/NAREIT Developed Europe Index, FTSE EPRA/NAREIT Germany Index as well as further sub-indices.
Ado Properties CEO Rabin Savion said he was well pleased with the flotation. "We believe that Ado Properties is very well positioned to take advantage of the opportunities on the very strong Berlin housing market. The IPO will certainly help us to continue on our growth course."
Ado currently owns and manages 14,000 residential units, and says it has been able to achieve recent rent rises of 8% annually. Market rents on new leases are considerably higher, it said, so there is strong upward potential. As recently as April, Ado bought 5,750 Berlin apartments for €375m from listed Deutsche Wohnen, along with a further 1,300 apartments from another unidentified fund.
The Tel Aviv-listed Ado Group will continue to own 35% of the Frankfurt-listed Ado Properties after the IPO, for which Arbireo Capital acted as process manager and sole financial adviser.