Fifteen companies to join G-REIT

After years of foot-dragging and political wrangling, the creation of the first German real estate investment trust (G-REIT) is now within sight. By late August, 15 companies had indicated plans to set up a tax-friendly REIT either via a flotation or by conversion of an existing listed vehicle, according to the REITs Deutschland website.

GIG Grundbesitz Immobilien, which has a market capitalisation of EUR 125 mln, began trading on the Frankfurt and Stuttgart stock exchanges on 20 August in preparation for conversion. Although GIG does not plan to become a G-REIT before 2009, it has already been given the label of a 'Vor-REIT', or pre-REIT. Other pre-REIT candidates include Deutsche REIT and Triton Asset Management, both investors in mixed real estate, and Boetzelen Real Estate, which has plans for a EUR 500 mln portfolio of discount stores. Boetzelen's flotation will be watched closely as its initial attempt was one of four IPOs postponed in the summer due to lack of investor interest.

Meanwhile CA Immo is to take its EUR 2 bn office REIT vehicle to the bourse by end-2007 or early 2008, around the same time as the planned listing of the EUR 1 bn office portfolio of Colonia and Oaktree and a similarly-sized office REIT by the new company German One. Helaba Landesbank Hessen-Thuringen and Hannover Leasing plan the flotation of a EUR 1.5 bn REIT vehicle in late 2007 as does the EUR 500 mln Fair Value REIT.

Other major REITs will be created by IVG (EUR 3.5 bn), Prime Office REIT (EUR 1.3 bn) and Commerzbank, though the latter has yet to announce its plans. Polis Immobilien intends to convert into a EUR 150 mln office REIT, while TAG Gewerbe is to launch a new company with a EUR 300 mln mixed portfolio.

See Property IPOs face watching game in the September edition of PropertyEU Magazine.