Adler takes 25% stake in Austrian residential peer

German listed residential landlord Adler Real Estate has acquired a 24.8% stake in Austrian peer Conwert Immobilien Invest for €285 mln.

The consolidation move comes weeks after Vienna-listed Conwert pulled the plug on the planned acquisition of €1.1 bn German residential landlord BGP. Back in April Conwert's shareholders turned down a €1.2 bn takeover bid tabled by German listed homeowner Deutsche Wohnen.

Adler purchased the shares in Conwert from MountainPeak, a holding company owned by Israeli billionaire Teddy Sagi. Adler is to issue €175 mln in mandatory convertible bonds at a coupon of 0.5% and a conversion price of €16.50 per Adler share over a three-year term. The convertible bond issue is conditional on approval by Alder's shareholders.

Adler said in a statement that buying into Conwert was part of its growth strategy to become a 'leading residential real estate company in Germany'. Earlier this summer Adler took over Westgrund, another apartment owner in Germany. The combined group's 50,000 units make it the fifth largest listed residential landlord in Germany. Adler also took Westgrund's place in the SDAX stock exchange index.

Conwert owns and manages both commercial and residential property. Its portfolio consists of 30,180 units in Austria, Germany and other countries in Europe (Luxembourg, Slovakia, Czech Republic, Ukraine, Hungary).

Some 75% of the assets in the portfolio was residential at end-March 2015, with commercial space making up the remainder. The residential share is set to rise to 80% as Conwert is selling down its commercial property holdings.