Prop­erty firms Sum­mit Ger­many, Gate­way eye 2019 share sales


Ger­man com­mer­cial prop­erty group Sum­mit is ex­plor­ing a 2019 share sale to raise money for new in­vest­ments and make it eas­ier to trade its stock, peo­ple close to the mat­ter said.

"The ma­jor­ity owner will of­fer shares, new shares will likely also be is­sued", one of the sources said, adding more than 25 per­cent of the com­pany's share cap­i­tal is ex­pected to be of­fered in the sale.

No firm de­ci­sion has so far been taken on the size of the share sale, which may take place in the sec­ond quar­ter, the per­son said, while an­other source said the listing would likely take place on the Frank­furt stock ex­change.

In­vest­ment bank Citi is or­gan­is­ing the deal, while an in­de­pen­dent IPO ad­viser is also help­ing pre­pare the of­fer, the peo­ple said.

Sum­mit Ger­many is 50.01 per­cent-owned by in­vestor Zo­har Levy, who is also man­ag­ing di­rec­tor. It has a mar­ket cap­i­tal­i­sa­tion of 526 mil­lion eu­ros. It is in­cor­po­rated in Guernsey and listed on Lon­don's AIM mar­ket, but in­vests mainly in Ger­man of­fice, re­tail, lo­gis­tics and stor­age prop­er­ties.

In 2017, it dou­bled its net profit to 113 mil­lion eu­ros, while in the first nine months of 2018 profit was flat at 96.4 mil­lion. The group's net as­set value was 667.5 mil­lion eu­ros at the end of Septem­ber.

So far this year, Sum­mit has pur­chased com­mer­cial prop­er­ties from buy­out group Fortress for 86 mil­lion eu­ros as well as a con­trol­ling stake in GxP Ger­man Prop­er­ties AG. It bought real es­tate as­sets, mainly used by Volk­swa­gen, worth 100 mil­lion eu­ros from Daz­zle Cap­i­tal a year ear­lier.

The com­pany ex­pects Ger­many's real es­tate boom to con­tinue.

"Ac­cord­ing to the lat­est mar­ket re­views by lead­ing Ger­man bro­ker­age firms, there is a lack of sup­ply in the Ger­man com­mer­cial mar­ket, there­fore rental de­mand is re­silient and rent lev­els are in­creas­ing," it said last month.

Sep­a­rately, Ger­man real es­tate de­vel­oper Gate­way is also ex­plor­ing a pos­si­ble 2019 share sale with the help of Credit Suisse, peo­ple close to the mat­ter said.

Gate­way later said in a state­ment it was con­sid­er­ing rais­ing cap­i­tal and listing on the reg­u­lated mar­ket in the first half of 2019. The com­pany is cur­rently listed on Deutsche Bo­erse's over-the-counter mar­ket.

The 100 mil­lion euro mar­ket cap com­pany and its ma­jor­ity share­hold­ers last month pulled a planned share place­ment, cit­ing volatile mar­kets, co­in­cid­ing with the de­par­ture of its chief ex­ec­u­tive, An­dreas Se­gal.

The two share sales are ex­pected to be or­gan­ised as so-called reIPOs, whose prepa­ra­tion and mar­ket­ing ef­forts tend to be as ex­ten­sive as those for an ini­tial pub­lic of­fer­ing (IPO).

Sum­mit, Gate­way and the banks de­clined to com­ment or were not avail­able for com­ment.

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