ActivumSG Capital Management Ltd. (ASG) has successfully completed Germany’s first listing of a residential property development company as shares of Instone Real Estate begin trading today on the Frankfurt Stock Exchange. Instone is a leading nationwide developer in Germany, which builds multi-family housing in the country’s major metropolitan areas and redevelops listed buildings for residential use. Based on the placement price for the shares, Instone has a market capitalization of almost €800m.
Saul Goldstein, ASG’s Founder and Managing Partner, said: “Instone’s successful listing is a game-changer for Germany’s fragmented residential development market and validates the corporate acquisitions strategy of our funds. We built up Instone to give it the scale and purchasing power to seize the attractive opportunities arising from urbanization and population growth. The healthy German economy and strong demand from homebuyers, which outstrips supply in the target markets, give Instone excellent visibility for the future.”
ASG formed Instone through the acquisition of formart from Hochtief in October 2014, followed by the purchase of Leipzig-based GRK 14 months later. ASG worked closely with the management team led by CEO Kruno Crepulja on a strategy to improve Instone’s profitability through efficiency savings and by growing its project pipeline more than three-fold to an estimated total sales volume of €3.4bn through 48 projects, as of September 30th, 2017.
Instone expects to lift deliveries to more than 2,000 units a year from around 1,000 currently. Furthermore, Instone projects that this will enable it to more than double annual sales to between €900m and €1bn over the medium term.
Stefan Mohr, Head of Corporate Real Estate Transactions at ActivumSG Advisory GmbH, said: “Instone’s listing reflects how the compelling opportunity in Germany’s residential development market and the credibility of its management resonated with investors. For ASG, it’s the first time we have brought a corporate investment to the public markets, so the placement represents a highly successful execution of the strategy by our team and its advisors.”
