Evergreen, an investment vehicle 97% owned by Qatar Holding, has launched a voluntary public takeover offer for Coima Res, an Italian real estate investment trust focused on Milan real estate.
Evergreen, whose other minority owner is Coima, the external asset manager of Coima Res, is offering €10 a share for the Italian REIT, valuing the entire company at around €360 mln. The price offered represents a premium of 38.5% over the volume-weighted average price of the past 12 months.
Alternatively, Evergreen is offering 1 unlisted share for every Coima Res share tendered in the offering, up to a maximum of 25% of the total stock capital.
The bidders, which are also current shareholders in Coima Res, are committing 41.4% of the share capital to the offer. They are targeting at least 95% of Coima Res’ shares, with the aim to delist the company which will operate as a Sicaf after the operation.
Commenting on the operation, CEO Manfredi Catella said it was a response to the current geopolitical conditions as well as the difficult situation in the listed sector. ‘We see growth opportunities in the market which we would like to grab, particularly linked to structural trends in the industry such as the transformation of offices. However, our growth plans have been limited over the past few years by the structural and persistent discount the listed sector has been trading at. Tapping the capital market to finance growth means a discounted capital issue, so we prefer to look elsewhere to finance our growth plans, particularly also because we do not see a short-term solution as a listed company; first it was the pandemic, now it's the war,’ Catella explained.
According to Catella, ‘the REIT sector as a whole has lost 20% of its value since the onset of Covid and continues to trade at a hefty discount. In the same period the private market globally has increased fundraising by roughly 34%, or €52 bn, so there is a growing asymmetry between these two markets'. Said Catella: ‘We believe that if we want to keep growing we need to raise capital as a private property company.’
As part of the operation, the Coima Res management will become part of the Coima asset management group and the external manager has waived its right to any compensation owing to the REIT termination.
The new Coima Res structure will be looking to invest with a core plus and value added risk profile across the Italian office and commercial property markets and with a focus on the Milan market and the Porta Nuova district, the bidders said.
According to Coima and Qatar Holding’s estimates, Italy could see an increase in remote working levels from 5% in 2019 to 30-40% in the medium term. Such a trend would lead companies to resize office spaces by an average of 5-10% in favour of common areas. ‘Office locations within cities are reducing in number and we believe that in the future offices will be more and more concentrated in one or two locations within a city.
At the same time, the demand from tenants is increasingly focused on sustainable buildings, with the demand for this kind of buildings increasing five-fold over the years 2015-2021, while the vacancy rate for this type of buildings was less than 2% in 2021 compared to a market average of over 8%. This is why we see an opportunity in the market to create the offices of the future.’
