Apollo Global Management is acquiring the commercial real estate portfolio owned by German listed residential property investor TAG Immobilien.
Apollo Global Management is acquiring the commercial real estate portfolio owned by German listed residential property investor TAG Immobilien.
Apollo European Principal Finance Fund II has signed a contract to acquire the portfolio in a share deal valued at €297 mln. The sale will involve the transfer of the commercial business, TAG Gewerbeimmobilien (TAG GI) to the fund. TAG will retain a 20% holding in TAG GI.
The purchase price - excluding loans of €167 mln to be assumed by the buyerr - is €130 mln, of which €78 mln will be paid in cash at closing with the remaining balance to be paid at a later date. The parties expect the deal to be concluded during the second quarter of 2014.
TAG GI's commercial portfolio, which currently comprises 21 properties with a total floor area of 270,000 m2, primarily includes office properties. At end-December 2013, TAG GI generated a net target rent of about €20 mln per year from the portfolio.
The portfolio, which comprises properties in various locations including Berlin, Munich, Hamburg and Cologne, has stable cash flows and potential for development, TAG said.
TAG board chairman Rolf Elgeti: 'By selling our Gewerbeimmobilien, we have taken the final step in our focus on residential real estate. The equity freed up by the sale will help to improve the LTV ratio. At the same time we look forward to the cooperation with Apollo initiated by the sale, and expect we will continue to create value for our shareholders through our remaining 20% stake.'