DIC Asset, a German-based property group specializing in commercial real estate, says it will buy Germany Estate Group (GEG) for 225 million euros in cash from TTL, a real estate investor, and KKR, a private equity firm.
GEG is an investment management platform specialized in commercial real estate properties that are placed with institutional investors. With 3.6 billion euros in assets under management, it owns landmark properties such as the Sapporobogen in Munich and the Garden Tower and Villa Kennedy in Frankfurt.
The deal will result in a significant increase in profitability per share, DIC Asset said, and raised its core profit (FFO) guidance for 2019 to 88-90 million euros from 70-72 million.
Following the deal, DIC Asset’s assets under management (AUM) in its institutional fund business will rise to more than 5 billion euros. That unit will in the future account for roughly half of the company’s profits.
Shares in TTL, whose subsidiary TTL Real Estate owns 75% in GEG, fell 6% on the news while DIC Asset shares were up 4%.
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