Listed German-Austrian property group Buwog said it has raised €305.6 mln in net proceeds from a share issue to finance further growth.
The company said it is working intensively on the expansion of its development pipeline and plans to invest the majority of the newly generated funds directly in the acquisition of land in its core markets of Berlin, Hamburg and Vienna. ‘These additional locations will allow us to continue and intensify our development-to-hold and development-to-sell strategy with new projects’, said Daniel Riedl, CEO of Buwog.
Andreas Segal, deputy CEO and CFO, said the funds will also be deployed to accelerate Buwog’s organic growth. ‘The expansion of development-to-hold activities will not only drive the growth of rental income, but also strengthen our balance sheet structure over the medium term. The positive development of our share price in recent months and the relatively low discount on the issue of the new shares confirm our strategic focus, and the capital increase will open new market opportunities for our group,’ he noted.
Buwog’s portfolio encompasses around 50,700 units spread across Germany and Austria.
Earlier this year, Segal told PropertyEU that the company planned to sell around 1,000 units a year outside Vienna from its existing Austrian portfolio. ‘We have about 23,000 units in Austria, of which 6,500 are in Vienna, so this could take a long time, as long as 15 years.'
Growth via external acquisitions has become more complicated in the past year, due to the lack of product, coupled with higher prices and increased competition in the market, according to Segal.
'We expect to invest between €100 mln and €150 mln in German acquisitions this year, plus an additional €25 mln to €35 mln in capex investments there,' Segal said.
