Newly MDAX-listed Annington raises fresh €450m

Listed German housing group Deutsche Annington said it successfully raised €451m in a private equity placement aimed at the acquisition of 5,000 apartments from CitCor Residential Group, a joint venture of Citigroup Property Investors and manager Corpus Sireo, future acquisitions and debt repayment.


The Bochum-based Annington issued 19.6m new no-par value ordinary registered shares, which were placed in a private placement to institutions in an accelerated bookbuilding process. The shares were placed at €23 each, generating gross proceeds of €450.8m. Deutsche Annington announced the purchase of over 5,000 apartments and some 210 commercial units (mainly located in Dresden, Leipzig, Erfurt and Berlin) in September.

It gave no price but said average monthly net rents of the package are €5.52 per sqm, which would suggest a purchase price of around €300-320m. At end-September, the firm owned 184,000 units, and boosted nine months’ FFO by 26% to €205m. It forecasts €280m-€285m for the full-year, growing to €340m-€360m in 2015 through further portfolio growth and optimisation. The company also said it would maintain its dividend outlook of €0.78 per share for the 2014 fiscal year, which would include the newly-issued shares.

Meanwhile, the MDAX-listed Annington raised nine months’ funds from operations by 26% to €205m for the first three quarters, and forecasts €280m-€285m for the full-year, growing to €340m-€360m in 2015 through further portfolio growth and optimisation. 


“We have developed extremely positively over the last 18 months and are a reliable partner for our investors and for our customers,” said CEO Rolf Buch in a results statement. Record expenditures on investment and maintenance contributed to the improved results. It recently added 5,000 units in Berlin and other cities in eastern Germany for an undisclosed sum from a joint venture of Citigroup Property Investors and manager Corpus Sireo.

In April, it bought 11,400 apartments - mostly in Munich, Frankfurt and Hamburg - from DeWAG, a firm controlled by US housing group Archstone. Another 30,100 flats, mostly in northern Germany and North Rhine-Westphalia, came from Vitus, controlled by the UK's Round Hill Capital. DA also sold 9,600 units across North Rhine-Westphalia for €484m to listed peer LEG.

At end-September, the firm owned some 184,000 residential units worth €11.4bn.
 For third quarter, Annington posted a like-for-like rental increase of 2.3% on 3Q13, and a fall in vacancies by 0.3% to 3.6%. The firm will spent €160m on stock modernisation this year, mainly energy efficiency refurbishments and refits to meet the needs of older people.

“We pursue a sustainable investment strategy which corresponds to the long-term goals of our investors,” said Buch. For 2015, the firm plans an investment program of €200m.
Net asset value rose by 6.5% to €5.1bn on the end of 2013. The proposed 2014 dividend is set to rise by 11% to €0.78 per share, or 70% of FFO – a percentage it also plans to pay out in 2015.

Since 22nd September, the firm has been promoted to the MDAX, the second-highest stock exchange segment, mainly due to an increase in free float and trading volume. It currently has a market capitalisation of €5.5bn.