Developer Gateway sells portfolio to pension fund for €242m

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German listed commercial and residential property developer Gateway Real Estate sold a portfolio of 21 commercial properties to a Spezialfonds of a German pension provider earlier this month for €242m. The assets are all situated in “good downtown locations in Germany”, according to Gateway.

CEO Manfred Hillebrand said in a statement that the sale of the properties served its strategy of concentrating on the development of office and center-city business properties in Germany’s top 7 cities.

Gateway, headquartered at Frankfurt Airport, has a broadly diversified portfolio and is currently developing 42 projects, worth about €5bn. These include the “Gateway Düsseldorf” tower, “One Cologne” in Cologne, and a prominent office building directly on the Spree river in Berlin Mitte. It also recently announced the development of the new IBM Technology Campus in Stuttgart, due for completion in 2021, with 42,000 sqm and capacity for 3,500 staff. The company targets a EBITDA margin of 25%.

After considerable management turbulence last year, which saw the hasty departure of recently-arrived top executives Andreas Segal and Holger Lüth, who had both worked together at developer BUWOG, the company seems to regained a steadier footing.

The hitherto relatively unknown Gateway took over Düsseldorf-based project developer Development Partner last year for an enterprise value of about €500m, catapulting it into the upper leagues. In April this year, in a form of “IPO through the back door”, the company, whose shareholders had been 90% the previous owners of Development Partner, placed 16.9m shares with new investors and sold further shares from its old shareholders, resulting in an increase of the free float to 25% and a listing on the Prime Standard on the Frankfurt Stock Exchange.