FdR doubles stake in German resi arm

French REIT Foncière des Régions has nearly doubled its shareholding in German residential arm Foncière Développement Logements.

The transaction, valued at around €1 bn, was carried out as a share swap based on an exchange ratio of six new FdR shares for 23 FDL shares, representing a discount of some 11% on the price of the FDL shares.

'The German residential segment is an attractive real estate market, which diversifies FdR’s business away from its focus on offices and key accounts. This segment is very much in keeping with our business model, which is characterised by sustainable and secure rental income that increases on a regular basis,' said CEO Christophe Kullmann.

FdR first announced the launch of a public exchange offer for its FDL subsidiary back in June. The deal, part of FdR's diversification strategy, lifts the group's stake in FDL to 59.7% from 31.6% previously.

FDL will be fully consolidated within FdR.

FdR has been the majority shareholder of FDL since establishing the subsidiary in 2005. The housing unit currently owns a portfolio valued at €3.2 bn, three quarters of which is located in Germany, with the rest in France.

The company will continue to pursue its strategy of geographic diversification through disposals of mature assets and acquisitions in high-potential cities like Berlin.