O1 Group, one of the largest office owners in Russia, will own a 26% stake in CEE-focused listed property firm CA Immo once its offer for the company, which closed on 6 February, is finalised.
O1 Group, one of the largest office owners in Russia, will own a 26% stake in CEE-focused listed property firm CA Immo once its offer for the company, which closed on 6 February, is finalised.
O1 Group, the Cyprus-registered parent group of Moscow-based listed developer O1 Properties, unveiled plans for the €18.5-a-share offer last November.
At the time the group acquired an initial 16.4% stake in CA Immo from shareholder Bank Austria for a total of nearly €300 mln, and said it was targeting a further 10% stake through an open offer.
Over the past few weeks, shareholders representing over 41% of CA Immo's capital have decided to accept the offer, which was subsequently significantly oversubscribed.
O1 only intends to take over 10% and will reduce the acceptance of the shares accordingly, investing around €180 mln to buy the shares.
CA Immo is a Vienna-listed real estate company with a €3.5 bn portfolio consisting largely of office properties throughout Germany, Austria and Central Europe. The company has a market capitalisation of around €1.6 bn.
Its shares have been rising by over 20% in the past three months, and were trading at €18.50 a share on Thursday morning.
O1 Group is a private holding company which owns over 60% of O1 Properties, one of the largest office landlords in Moscow with almost 500,000 m2 of rentable space. Its portfolio includes the flagship $1 bn White Square complex in Moscow. Other major shareholders of O1 Properties are ICT Group (26%) and Goldman Sachs (12%).
With Russia battered by international sanctions, stalling economic crasis and weak oil prices, investors have been searching for new investment destinations.
Net capital outflows from Russia nearly tripled in 2014 to their highest level on record, according to Russia's central bank data. Net outflows by companies and banks reached $151.5 bn in 2014, up from $61 bn in 2013 and exceeding the previous record of $133.6 bn set in 2008 during the global financial crisis.
The exodus of capital also works as a protection against a weakening ruble, which has plunged by 40% against the dollar last year.
O1 is not the only Russian property investor looking outside its home market.
According to a news report by PropertyWeek, investment vehicle LetterOne - which was co-founded by Russian billionaires Mikhail Fridman, German Khan and Alexei Kuzmichev - is currently under offer to buy Carlyle Group and Generation Estates’ Pure Student Living portfolio for £535 mln, or a yield of less than 5%.
Pure, a 2,150-bed portfolio, comprises five London student blocks, with four completed sites in Hammersmith, the City, the South Bank and Highbury, while a fifth is under development in Whitechapel.
