The Board of Directors of Foncière des Régions has approved a proposed public exchange offer for shares between Foncière des Régions on Foncière Développement Logements (FDL), which will increase Foncière des Régions’ presence in Germany. When the transaction is complete, Foncière des Régions expects to increase ownership of the capital of its residential subsidiary from 58.2% to 62.4%, compared to 31.6% at 31 December 2012, on the basis of an exchange of six new Foncière des Régions shares for 23 FDL shares.
"With this real estate acquisition of nearly €1 billion, Foncière des Régions is increasing its presence in Germany, which features a solid economy and an attractive real estate market, where we have been implementing an active property management strategy since 2005” stated Christophe Kullmann, CEO.
Choosing a strategic and secure real estate investment
The proposed public exchange offer for shares will strengthen Foncière des Régions’ position on growth markets, increasing its exposure in Germany to 15%, compared to 10% at present. With this bolstered position, Foncière des Régions hopes to garner the benefits of a particularly sound economy featuring low unemployment rates and the highest growth forecasts in the Euro zone. Foncière des Régions has been the majority shareholder of FDL since the subsidiary was established, and now controls 31.6% of it.
Three quarters of FDL's €3.2 billion in property assets is located in Germany, with the rest in France. Foncière des Régions has partnered the development of FDL's German residential holdings, which now has a solid track record in this sector as well as a high quality real estate team.
The demographic perspectives in the country, rebounding since 2009, and the historically low level of new residential offerings available impart an optimistic perspective to this market, both in terms of rentals and property values. In this way, FDL intends to pursue its strategy of geographic diversification in real estate, through disposals of mature assets and acquisitions in large, animated and high-potential cities, like Berlin.
This transaction reflects Foncière des Régions’ choice of investing in secure real estate assets with enhancement potential, and it confirms the company's business model favoring secure cash flows and value creation through an asset rotation policy.
The public offer to exchange shares should begin in July and be completed in September.
Source: Foncière des Régions