Grove Int’l rumoured to be priming Aurelis for IPO

A report by Bloomberg suggested that Grove International Partners, owner of German developer Aurelis Real Estate, is considering floating Aurelis on the stock market, in a move which could take place as early as this year. Neither Grove nor Aurelis have confirmed the story so far.

Grove is a property investment firm backed by hedge fund manager George Soros, and founded by Richard Georgi in 2004 after its earlier incarnation as Soros Real Estate.

The Frankfurt-based Aurelis was valued at about €500m in November 2013 based on a valuationpublished by previous co-owner Hochtief AG. After a chequered history since its foundation in 2002 as a subsidiary of railway operator Deutsche Bahn in 2002, during which it was 50%-owned by WestLB and Hochtief AG at different times, Aurelis manages and develops offices and logistics properties in cities from Cologne to Frankfurt and Munich.

Grove is, not surprisingly, among companies looking to take advantage of demand for German real estate stocks as values increase and rents rise. Property share sales reached a record €4.8 billion last year, 29% more than in 2013, according to data compiled by Dusseldorf-based Barkow Consulting. In 2014, the FTSE/EPRA NAREIT index of German real estate stocks gained fully 40%.

Another company reported by Bloomberg as lining up an IPO is the Berlin-based Ado Properties, a residential investor with a focus on the German capital. Ado, whose parent company is listed in Tel Aviv, may be planning to announce a secondary share sale by the end of the first half, insiders close to the deal were quoted as saying.

A flotation could raise €300-400m based on the company’s ownership of about 235 properties with 9.000 apartment units in Berlin, with total market capitalisation of just below €800m, although the size of the potential placement is not known. Investment banks UBS and Kempen are said to be preparing the flotation, with Freshfields as the advising lawyers.