DEGI Deutsche Gesellschaft für Immobilienfonds mbH is selling a German portfolio comprising 37 properties with a current market value of around €2.45 billion from the GRUNDWERT-FONDS to affiliates of the Whitehall Funds.
DEGI and the buyers agreed on a purchase price exceeding the current market value of the portfolio according to German valuation standards. The buyers are affiliates of the Whitehall Funds and/or its affiliates, real estate funds sponsored and managed by Goldman Sachs. Contract signing was preceded by a bidding procedure with a handful of potential investors. With this transaction DEGI slims down the fund's portfolio to 25 properties worth approximately €2.3 billion, while at the same time significantly changing its regional allocation. "This measure will not only benefit the fund's performance; thanks to its leaner portfolio, the fund will also become substantially more flexible and responsive to manage," says Bärbel Schomberg, Speaker of DEGI's Management Board. The transaction will be completed, with transfer of the properties to the buyers within a few months.
Suspension of issuance of new shares to protect investors
In order to ensure that current investors in the GRUNDWERT-FONDS profit in full from the results of DEGI's proactive portfolio management, and to preclude any inflow of speculative investments into the fund, DEGI will as from 7 May 2007 not be issuing any new shares of the fund for the time being. In view of the high transaction volume involved and the purchase price above the current market value, it can be anticipated that the unit price will rise considerably on the day of payment and transfer of the properties. Redemption of the fund's shares continues to be possible on every trading day.
Eurotower in Frankfurt sold
At the same time, DEGI has sold the Eurotower for its current market value of €430 million to the New York-based company RFR-Holding. Purchased by DEGI in 1994, the Eurotower at present houses the European Central Bank (ECB). Factoring in this sale, the GRUNDWERT-FONDS' property in the Rhine-Main region now accounts for 19% of the fund's portfolio in terms of current market value instead of 30.7% as previously. Following this transaction, the ratio between German and European properties arrives at the strategically defined figure of 60 % in Germany and 40% in the rest of Europe.