Australian group BGP to exit German resi through IPO

The Australian group BGP is planning to list its German residential holdings on the stock market in an IPO planned for later this year, a recent Reuters report said, citing two people familiar with the deal. The group could sell shares worth up to €500m in the flotation, which is being organised by JP Morgan, said the report.

BGP owns apartments worth €1.1 billion, mainly in Berlin and North Rhine-Westphalia, and is one of the few large portfolios still remaining in private hands that are ready to be divested. It also has additional assets worth €200m. The group was formed in 2005 as a joint venture between Australian investment group Babcock & Brown and Australian property group GPT, and at one stage had a valuation of €4 billion before embarking on a programme of disposals.

Babcock & Brown was liquidated in 2009, with GPT shareholders receiving shares in BGP. Holders of these securities, mainly funds and more than 50,000 primarily Australian retail investors, have so far been unable to trade them publicly.

BGP, whose equity value is estimated to be €600-700m, mandated bankers Lazard in mid-2014 to advise it on its options for an exit. “The main scenario is a stock market listing, but you can never rule out a trade buyer making an attractive offer,” a person familiar with the company told Reuters.

Earlier this year BGP refinanced a 4,000-unit portfolio with €160m granted by Berlin Hyp as part of the overall refinancing of its assets. Following a sale of a 6,750-unit portfolio in Wilhelmshaven to Adler Real Estate in January this year, BGP still holds around 15,000 apartments in Berlin, Cologne, Kiel, and neighbouring Rendsburg.