Kronberg Int’l sells €113m portfolio to listed Adler

Luxembourg-registered Kronberg International has sold a majority shareholding in three German residential and commercial property portfolios to the listed Hamburg-based Adler Real Estate for abut €113m, despite having only acquired the stakes earlier this year.

The sale involves Kronberg’s 52.8% stake in an Amsterdam vehicle, SIG. RE B.V, with the remaining shares being held by Prelios Netherlands, a subsidiary of the Italian property group. The three portfolios comprise 1,769 residential and 137 commercial units in Düsseldorf, Cologne, Dresden, Leipzig, Chemnitz, Lübeck, Kiel, Rostock and several cities in the Ruhr region.

Kronberg has traditionally been a joint venture partner for several Italian and Austrian companies, including Conwert Immobilien, ECO Business Immobilien and Prelios (previously Pirelli Real Estate) in smoothing those companies’ paths into the German market. Further partnerships exist with the Medical Association of Styria in Austria and Munich-based insurer ERGO, and Kronberg still has holdings of about 3,000 property units as a partner with a number of these investors.

According to Dr. Martin Hellweger, Kronberg’s founder and CEO, the short holding period of the just-sold assets came about opportunistically due to big investor demand, “which enabled us to realise our targeted increases in asset values earlier than expected.”

The deal is sizable for Adler Real Estate, which has been building up a residential real estate portfolio of undervalued housing requiring refurbishment, valued at just over €300m at the end of September.