The Board of Hansteen announces that it has agreed to dispose of its German and Dutch portfolios for €1.28bn to entities owned by funds advised by affiliates of The Blackstone Group and M7 Real Estate .
Highlights of the Transaction are:
- The portfolios are being sold on a debt free basis for cash, and the value given to the German and Dutch portfolio is €1.28bn payable upon Completion (less a deposit of €50m which has been paid), subject to a net asset value adjustment post-Completion. All latent capital gains tax liabilities incurred in relation to the Transaction will be shared on an equal basis between the Company and the Buyer.
- The price represents a premium of approximately €76m to the Year End Valuation which itself included a valuation uplift of €34m over the 31 December 2015 valuation.
- The disposal realises the value in the portfolios at a time when not only are they at historically high levels of occupancy and rent for the period of Hansteen's ownership but also the Euro/Sterling exchange rate is favourable.
- Completion is expected to occur before the end of June 2017. Conditions to Completion include Hansteen's Shareholder approval and the Buyer obtaining anti-trust clearance in Germany.
Following Completion and repayment of the debt secured against the German and Dutch portfolios (and satisfaction of other incurred costs) Hansteen intends to distribute a substantial portion of the net cash proceeds of the Transaction to its Shareholders.
Commenting on the Transaction, Morgan Jones and Ian Watson, joint chief executives of Hansteen, said: "This is a compelling opportunity to crystallise both the revaluation gains from these German and Dutch assets achieved by our active asset management and the gains from foreign exchange movements. The value being realised is around 30% higher than the book value at 31 December 2015 when measured in Sterling.
The sale is in line with our long-term business and portfolio strategy of buying at a low point in the cycle, with low occupancy and rents, adding value through improved asset management and subsequently realising the investment at a higher point in the cycle".
Hansteen was advised by JLL on the Transaction.
