The acquisition of a property portfolio with 3,083 residential units and 71 commercial units at a purchase price of approximately 150 million by TAG Immobilien AG agreed on July 26, 2011 has been successfully completed with the capital increase entered in the commercial register on November 1, 2011.
TAG largely financed the purchase by issuing 5,476,924 new shares at a price of 8.00 per share and settled the acquisition with a capital increase against contribution of shares in the property companies that own stakes in the portfolio.
The capital increase using the authorized capital excluded subscription rights. Once all conditions had been met, especially the long-term refinancing of the entire portfolio by a German bank, and the confirmation of its intrinsic value by the auditor of the non-cash contribution, the contract of July 26 2011 was transacted according to plan. The new shares were registered on November 2, 2011 on the regulated market of the Frankfurt Stock Exchange.
The completion of the capital increase enlarges TAG's share capital from 64.4 million to 69.9 million. Following the conclusion of the transaction, the portfolio vendor owns a 7.8% stake in TAG, and TAG Group's total residential inventory increases to 30,285 units.
The regional focus of the portfolio is in Northern Germany and Saxony, so that the existing TAG Group branches in Hamburg and Leipzig can take over the management of the acquired properties at very little cost. The rental space totals 208,393 m², net rent is 12.7 million per annum, and the purchase price amounts to approximately 150 million.
The vast majority of the properties are located in various cities in Northern Germany with a focus on the periphery of Hamburg, Wolfsburg and Cuxhaven, and around a quarter in Saxony - in and around Dresden and Leipzig.
The vacancy rate is 6.3%. Most of the buildings are post-war as well as new buildings from the end of the 1990s in excellent condition. This is reflected in the actual rent, which averages about 5.42/m²/month.
"TAG can manage the newly acquired properties with its existing infrastructure and manpower," says TAG CEO Rolf Elgeti.
"Like our other acquisitions, this will have a positive impact on our cash flow and NAV per share. The fact that the sellers accepted our shares as currency at a price of 8 underscores the confidence placed in our strategy even in turbulent times."
Source: TAG Immobilien AG