Germany's Alstria Office REIT has raised nearly EUR 61 mln via a capital increase to finance the acquisition of a EUR 95 mln core-plus office portfolio in Germany. In a statement on Wednesday, Hamburg-based Alstria said it has placed over 7 million ordinary shares at a price of EUR 8.5 per share, lifting its nominal share capital to nearly EUR 79 mln.
Germany's Alstria Office REIT has raised nearly EUR 61 mln via a capital increase to finance the acquisition of a EUR 95 mln core-plus office portfolio in Germany. In a statement on Wednesday, Hamburg-based Alstria said it has placed over 7 million ordinary shares at a price of EUR 8.5 per share, lifting its nominal share capital to nearly EUR 79 mln.
The operation was carried out to finance the equity portion of the acquisition of six office buildings in the German cities of Düsseldorf, Frankfurt and Hamburg. The vendor is a German institutional fund, understood to be managed by IVG’s institutional funds division. The deal reflects an initial yield on cost of 8.5%, reflecting the vendor's need to sell within a definite time.
The portfolio, which includes the German headquarters of L'Oréal and the Wehrhahn Center in Düsseldorf, represents a total of around 71,500 m2 and has a vacancy rate of around 26%. It generates an annual rent of EUR 8 mln and has an average unexpired lease term of four years. Closing is expected by the second quarter of 2012.
In addition to the capital increase, the transaction is being financed by debt provided by an unnamed foreign insurance group which granted a senior unsecured bridge loan of EUR 45 mln. Olivier Elamine, Chief Executive of Alstria Office REIT, said the company will be looking to refinance the credit facility with a new mortgage financing in the near future. 'This unsecured loan is slightly expensive - 6.5% for the first year with an annual increase of 50 basis points for the following two years, and is to be refinanced as soon as possible,' he noted. The deal is directly earnings accretive, resulting in a forecast EUR 5 mln increase in funds from operations this year.
The deal has won favour from market experts who believe the FFO-accretive effect compensates for the 2% NAV dilution resulting from the capital increase. 'The portfolio fits rather well into Alstria's existing platform and we think that it is even less work-intensive than the VastNed office portfolio [acquired last year],' said analyst Kai Klose of Berenberg Bank in London.
The transaction was brokered by BNP Paribas Real Estate.
Click on the link below to read: Alstria office REIT posts 26% growth in FFO in 2011
