LEG raises fresh capital to fund new €225m portfolio

Still expanding and still looking for new portfolios to bolt on to its huge North Rhine-Westphalian stock of residential housing is Düsseldorf-based LEG Immobilien AG.

LEG has just issued a further 1.196 million shares which it placed with international institutional investors at a price of €61.54 per share (the current share price is about €64.60). The placement brought in total gross proceeds of €73.6m for the company.

The placement, managed by Commerzbank and Kempen, represented a 2% dilution for existing shareholders. New shareholders will be entitled to a dividend from full-year 2015, but not for the year 2014, which amount to €1.96 per share

The proceeds will be partially used to pay for the company's latest acquisition, of about 3,500 residential units for €225m from an unidentified seller.

The portfolio is located about 60% in Düsseldorf and Cologne, the two largest cities in LEG's North Rhine Westphalian heartland. The average rental income on the properties is €5.22 per sqm/month, generating an annual income of €14.2m. The vacancy rate is 3.6%.

LEG's CEO Thomas Hegel commented, "Looking at our current pipeline, I think we can safely say that we will again exceed our stated target of at least 5,000 units for 2015." LEG currently owns and manages about 110,000 housing units.