Germany's Hochtief has announced the sale of a residential and commercial building in Erfurt, the capital of the German state of Thuringia, to listed property firm TAG Immobilien for around EUR 29 mln, including a mix of equity and debt.
Germany's Hochtief has announced the sale of a residential and commercial building in Erfurt, the capital of the German state of Thuringia, to listed property firm TAG Immobilien for around EUR 29 mln, including a mix of equity and debt.
Built in the early 1980s and redeveloped around 2000, the 13-storey complex comprises five buildings with shops on the ground floor, offices on the first floor and 360 apartments over a total of 32,000 m2. The occupancy rate of the building stands at 97%.
'We will now focus more on our core business: long-term public-private partnerships and turnkey construction in Thuringia,' commented Christian Kahmann, member of the Hochtief PPP Solutions unit.
The acquisition is in line with TAG's strategy of investing in locations where it already has properties, the company said. 'The newly acquired portfolio can be cost-effectively managed by the TAG Group's existing branch in Erfurt,' the company added. The annual net rent is around EUR 3 mln, leading to an increase in FFO (Funds from Operations).
'Our strategy for acquisitions is that they must lead directly to an improvement in FFO and NAV,' said Rolf Elgeti, CEO of TAG Immobilien. 'That is the case here: we will be able to derive considerable contributions to the operating result from this portfolio as early as next year. Our increasingly strong platform puts us in a position to continue making smaller, attractive acquisitions that complement our portfolio and strengthen its operating profitability.'
