Internos to manage EUR 487m IERET portfolio

Internos Real Investors has been appointed to manage the sale of the EUR 487 mln portfolio owned by London-listed Invista European Real Estate Trust (IERET).

IERET's board announced on Thursday that, subject to shareholder and bank approval, all the trust's 42 properties will be sold. A merger or sale of the entire company may also be considered. Internos has been appointed to manage the portfolio during the wind-down period which is expected to last about three years.

IERET owns office and logistics assets mainly located in Germany and France. Invista Real Estate Investment Management, which has up to now been the investment manager for IERET, is also been wound down. IERET’s share price rose about 7-10% following the IERET announcement on Thursday morning.

Internos won the mandate in the face of stiff competition from the likes of Schroders, Henderson and Aberdeen. The deal, which is also subject to approvals, will increase Internos' gross European assets under management from about EUR 1.5 bn to EUR 2 bn, Internos co-founder Jos Short told PropertyEU.

'We were competing against the premier league for this one. I think it is a feather in the cap for an independent owner-managed firm like Internos that the board of quite a big pan-European listed trust has gone with us,' Short said.

Short said there would be no firesale. 'We want an orderly liquidation, hopefully, into a slightly better real estate capital market. We aim to extract value for shareholders and narrow the discount the share price.' Most of the assets, he added, are in Germany and France, both countries where investor appetite is evident.

A buy-out of IERET is also a possibility, Short said. ‘I can’t rule out a corporate offer being made for some or all of IERET in six months to two years’ time.’

The IERET management contract comes 18 months after Internos acquired the Halverton pan-European real estate investment management from Australia’s GPT Group. Short: ‘We have learned a lot by doing the IERET deal so we could quite possibly apply that to other situations - business manager replacement assignment is one of our four strategies to grow the company. A number of managers out there like IERET face a parent company decision to sell or liquidate, or because they are not really growing are positioning themselves for sale or alternatives.’

Internos is not actively pursuing other management mandates, however. ‘We are going to be pretty busy doing this one so we are not looking at anything else at the moment. But in six months time we might be,’ Short added.