ADO Properties doubles residential holdings in run-up to IPO

Ado Properties, a German subsidiary of Tel Aviv-listed company Ado, has continued its recent buying spree, most recently buying 43 apartment buildings in its target market of Berlin for €130m. The properties, totalling 1,300 apartments, were acquired from an international investment fund, in a deal which closed in the first quarter.

More than 60% of the residential units were built between 1900 and 1930, with the remainder built in the 1990s. The bulk of the buildings (around 72%) are located in the upcoming districts of Neukölln, Pankow, Tempelhof/Schöneberg and Wedding. The remainder is located in the more established districts of Charlottenburg/Wilmersdorf, Köpenick, Steglitz and Tiergarten. The average rent is €5.96 per sqm/month.

Ado said it will draw up an individual modernisation and letting strategy for each building. According to CEO Rabin Savion, “The transaction proves our ability and strategy to acquire smaller or larger portfolios as well as single buildings throughout Berlin. This transaction enables Ado to continue to build a very balanced portfolio with property in inner city and outskirt locations with rent and value potential.” Ado now owns and manages 14,600 residential units in Berlin.

The deal follows the acquisition at end-March of 5,750 residential units (ex-GSW Immobilien AG assets) in the Spandau and Reinickendorf districts in Berlin for €375m from listed company Deutsche Wohnen, a transaction which Ado said had nearly doubled its portfolio. Financing of €280m was provided by pbb Deutsche Pfandbriefbank (€155m) and the Investitionsbank Berlin (IBB) which provided €125m.

At the time, CEO Savion said, “We see great value potential and high demand for apartments in the outskirts of Berlin, since rent levels have been continually rising in inner-city locations over the past years, along with a decline in available residential units…We are convinced demand will grow in the outskirts to benefit from more affordable rents.”

Ado Properties' principal shareholder is Shikun & Binui - an Israeli listed real estate and infrastructure group, which itself belongs to fellow-Israeli Arison Group, which has operations in 20 countries. Ado’s recent buying surge in Berlin comes after it said earlier this year it plans to list on the German stock exchange by the second half of this year, raising €300m to €400m in its IPO. Moshe Lahmani, the chairman of Shikun and Binui in Israel, announced the flotation plans which is aimed at raising funds for the company’s drive into infrastructure projects. The Israeli building group is part of a consortium which has just secured a €755m project to build toll roads in Texas.