AIM-listed Summit Germany raises €120m in share placing

Summit Germany, the AIM-listed and Guernsey-headquartered specialist for German commercial real estate, has raised €120 million by issuing 171.4 million shares at 70 euro cents each in an oversubscribed placing with existing and new institutional investors.

The German commercial real estate company said it will use the money to finance property acquisitions, joint ventures and co-investments as it moves towards its target of building an internally-managed portfolio worth more than €1 billion.

"The company is currently exploring a range of attractive acquisition opportunities and will seek to complete a number of them using the proceeds of the placing," it said.

"Demand for the properties of the company and its subsidiaries continue to be strong and are increasing with the increase in rental income and occupancy. The board is confident that the company is well positioned to benefit from the market trends by executing on new acquisition opportunities; by continuing to enhance the rental income from its properties and by realising value from its substantial portfolio," it added.

The company also said in a statement that it has signed a binding term sheet with a German bank for the financing of nine of the 11 properties the company bought back in April 2014.

The company said the deal is for a €33 million, seven-year facility, at an interest rate of 2.1% a year and an amortisation rate of 3% a year. It said the loan will bear "customary covenants". Of the total loan, €2.5 million is subject to the extension of some leases.

Summit regained full control of the portfolio of mainly office buildings last April when it bought a loan facility on the 11 properties for about €45.5 million. The properties covered by the refinancing have a lettable area of 58,000 square metres, have multiple tenants, an occupancy rate of 91% and an annual rent income of €5.6 million. It said it expects to complete the refinancing by the end of February.