Germany's Ado plans €400m IPO to fund expansion plans

Berlin value-add residential landlord Ado Properties said on Tuesday that it plans to raise at least €400 mln in an initial public offering this year.

Ado, a €1.2 bn residential owner owned by Israeli listed Ado Group, will sell shares on the Frankfurt stock Exchange creating 'the only Prime Standard listed real estate specialist focused exclusively on Berlin'.

The company owns about 13,700 homes and 700 commercial properties in the German capital.

'Ado Group Ltd. has actively supported Ado Properties in its dynamic expansion during the past decade and is pleased to jointly enter the next stage in the Company’s development,' said Shlomo Zohar, Executive Vice Chairman of Ado Properties. Ado Group and its major shareholder Shikun & Binui, remain 'committed as long-term strategic investors' in Ado Properties, he added.

Kempen & Co and UBS Investment Bank are acting as Joint Global Coordinators and Joint Bookrunners. Barclays and Commerzbank are mandated as additional Joint Bookrunners. Arbireo Capital is acting as process manager and sole financial adviser in the transaction.

Ado Properties intends to use the net proceeds for acquisitions of residential properties or portfolios in Berlin as well as targeted capex investments in its current portfolio.

'Ado Properties has the clear strategy to create value through targeted investments in its portfolio, privatizations and accretive acquisitions. We aim to approximately double the number of units over the next few years to generate value for our shareholders, capitalize on our existing platform and further enhance the efficiency of our operations,' added Rabin Savion, CEO of Ado Properties.

Ado Properties said it has a conservative balance sheet consisting mainly of mortgage backed loans with an average cost of debt of 2.6%, no major maturities until 2018 and a weighted average maturity of six years.

As of the end of Q1 2015, ADO Properties had a LTV-ratio of 57%. Post-IPO, the company is targeting a moderate LTV ratio of 45% to 50%. 'Our conservative capital structure allows for predictable growth, supporting attractive and continuous dividends whilst ensuring that our indebtedness does not restrict our business or strategy,' commented Rabin Savion.