Cerberus firming up on plans for German retail flotation

Speculation is mounting in German financial circles that private equity group Cerberus is now really firming up on its plans to float its German retail property holdings before the end of this year, as we reported in a recent issue of REFIRE.

The group’s retail holdings consist primarily of about 100 Woolworth stores and about 45 large Metro stores, including 42 Cash & Carry centres, all located in large urban areas across German and collectively valued at about €2bn. To date they have not been grouped together, but held in different parts of the huge Cerberus structure.  The properties total about 900,000 sqm, and are all managed by the Berlin-based Acrest Property Group.

Cerberus has engaged Goldman Sachs, JP Morgan Chase and Bank of America Merrill Lynch to work on preparing the stock market listing, either as a tax-efficient REIT to join Germany’s very modest REIT sector, or for an IPO as a normal listed real estate company.

The REIT option would enable Cerberus to avoid paying corporate level taxes by distributing at least 90% of its taxable income to shareholders as dividends.

If the flotation in some form does go ahead, it would follow on the heels of the housing listing of LEG in Düsseldorf in January, which raised about €1.3bn for Goldman Sachs, and the proposed listing of giant housing landlord Deutsche Annington by parent company Terra Firma, scheduled for June or July this year.