REAL ESTATE – German real estate specialist IVG Immobilien plans to acquire nearly all of Oppenheim Immobilien-Kapitalanlagegesellschaft (OIK), Germany’s leading provider of real estate funds for institutional investors.
IVG said that by the end of 2006, it would acquire a 43.9% stake in OIK that is currently held by German private bank Sal. Oppenheim, OIK’s other shareholder.
The acquisition will lift IVG’s stake to 94% by January 1, 2007, with Oppenheim retaining the other 6% stake. Financial details were not disclosed.
OIK is Germany’s leading provider of real estate funds for institutional investors (Immobilien-Spezialfonds), having taken in €5.7bn with the products. All told, OIK has €10bn in assets under management.
“The almost complete acquisition (of OIK) is an important step towards positioning IVG as a leading real estate investment company in Europe,” said Wolfhard Leichnitz, chief executive of Bonn-based IVG.
“It will be of particular benefit in our search for new investment opportunities and in our leasing activities,” Leichnitz added.
IVG said OIK would be integrated in its own real estate fund business. Other core businesses of IVG, a listed company based in Bonn, include portfolio management and project development.
IVG also said that despite its integration, there were no plans to change OIK’s name. Siegfried Cofalka will also remain OIK’s chief executive.
Earlier this year, Cofalka said OIK would be investing €1bn in new properties this year alone, with 30-40% going to retail stores. The same level of investment in retail stores was also planned for 2007, Cofalka added.
Although it has decided to sell its stake in the OIK venture, Oppenheim still retains close ties to IVG. The German private bank owns a 20% stake in IVG, with another 5% held by German Landesbank HSH Nordbank and 3% by WGZ-Bank, a central bank for German co-operatives. IVG’s free-float is 71.5%
Meanwhile, German finance minister Peer Steinbrück reaffirmed last week that German real estate investment trusts (REITs) would be launched from January 1, 2007.
Steinbrück said that even if the legislative process for legalisation of REITs were not completed by the end of the year, it would happen retroactively from the target date.