Ado Properties agrees to sell €920m Berlin resi portfolio to Gewobag

German residential group Ado Properties announced on Friday that it has entered into an agreement with local group Gewobag Wohnungsbau Aktiengesellschaft Berlin to sell 100% of the shares of its subsidiaries owning23 residential properties in Berlin.

The portfolio includes a total of 5,800 apartments in the Spandau and Reinickendorf districts in the West and the North of Berlin, and is being sold for €920 mln, including the assumption of €340 mln of debt.

The agreement is subject to a number of customary conditions, including merger control approvals.

Since purchasing the units in 2015, Ado Properties has made significant investments in the portfolio and substantially improved the quality of living. 'When we acquired the portfolios, some of the properties and outdoor facilities were no longer up-to-date and in need of renovation. We have spent significant time and effort in renovation of residential units and green spaces and bringing them up to modern tenant needs,' said Ran Laufer, CEO of Ado Properties.

As a result, the occupancy rate of the portfolio has increased to approximately 98%. The portfolio also has excellent potential for further residential development on undeveloped plots next to the existing buildings. Ran Laufer added: 'Berlin is one of the largest and most dynamic residential property markets in Europe. Demand for modern living space remains high and we see considerable growth potential here. We will continue to examine possibilities to recycle capital by selling buildings which we have improved and by acquiring buildings and portfolios that have more upside.'

Ado's loan to value ratio is expected to decrease from 38% to approximately 21% following the sale. Ado, which owns around 24,000 units in Berlin, said that it is considering various opportunities with respect to the proceeds including repaying existing indebtedness, acquiring additional real estate portfolios, and for general corporate purposes.

ADO Properties is a company that focuses on the residential real estate sector and owns a property portfolio of around 24,000 units in Berlin. The company operates an entirely integrated, scalable in-house platform that includes a dedicated property administration. The portfolio of ADO Properties is concentrated in central locations inside Berlin's S-Bahn-Circle and in attractive districts on the city's periphery.

Greenberg Traurig advised Gewobag on the deal.

The deal comes within days of Ado Properties changing majority owners. Earlier this week, Frankfurt-listed residential landlord Adler inked a deal to acquire all the shares in Ado Group, a Tel Aviv-listed holding company and shareholder in German residential player Ado Properties, for €708 mln.

The transaction will result in Adler holding a 33% stake in Ado Properties, creating a German residential real estate business with a fully consolidated GAV of €9.4 bn.

Funds indirectly controlled by Apollo and Dune International, which hold around 31.96% and 19.68% of Ado respectively, have also voted in favour of the merger.


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