German commercial property company IVG RE plans to withdraw from several European countries in order to streamline its direct property portfolio. The decision has been taken amid declines in property yields across the continent to historical lows, newspaper Financial Times has said. The company expects the sell-off to generate about EUR 600 mln, which it will reinvest in Germany and a few foreign cities in which it has chosen to continue to operate.
German commercial property company IVG RE plans to withdraw from several European countries in order to streamline its direct property portfolio. The decision has been taken amid declines in property yields across the continent to historical lows, newspaper Financial Times has said. The company expects the sell-off to generate about EUR 600 mln, which it will reinvest in Germany and a few foreign cities in which it has chosen to continue to operate.
IVG's ceo Wolfhard Leichnitz told the Financial Times that 'we will sell our holdings in Madrid, Lisbon and Milan, where we do not have the scale to operate according to our business model'. Leichnitz added IVG will focus on the German market and four foreign cities in the future. 'We will stay in the foreign markets where we have critical mass, which are Paris, London, Brussels and Helsinki,' he said.
The sell-off only concerns the company's own investments and not investments by the funds it operates for third-parties. Leichnitz said IVG expects to have completed its withdrawal from the markets it has defined as non-strategic by the end of the year.
IVG is Germany's largest listed commercial property company. The company already sold assets worth EUR 600 mln last year.
