FDL to separate French and German residential portfolios

Foncière Développement Logements, the residential arm of French REIT Foncière des Régions, plans to separate its German and French portfolios.

The move is in response to growing divergence between the two markets as well as greater investor specialisation.

The split will be achieved through the sale of shares in the German subsidiary, Immeo Wohnen, to the main shareholders Foncière des Régions (59.7%), Crédit Agricole Assurances (15.1%), Cardif Assurance Vie (13.7%) and Generali (8.9%).

'The transaction will enable a specific strategy to be developed for each country,' FDL said in a statement.

Immeo Wohnen owns 47,000 homes. Foncière Développement Logements paid €2.1 bn to take control of the company in October 2006.

The proceeds from the planned divestment will be distributed to all FDL shareholders in the form of an exceptional dividend of around €131 per share based on the Triple Net Asset Value (NNNAV) of Immeo Wohnen at the time of the transaction.

Subsequently, FDL plans to implement a public repurchase offer, providing liquidity to shareholders who wish to sell their shares. Foncière des Régions, Crédit Agricole Assurances, Cardif Assurance Vie and Generali have indicated their intention not to tender their shares.

All these transactions will be submitted to shareholders for approval at the Extraordinary General Meeting planned for 16 June 2014 and will be subject of a fairness opinion conducted by an independent firm.

On closing of the operation, FDL will have a €860 mln portfolio focused on the French residential market. The group currently owns and manages €3.3 bn of assets in France and in Germany.