Summit takes controlling stake in Deutsche Real Estate

Summit Germany, a UK-based property investor, has bought the 76% stake held by the Goldman Sachs Group in Deutsche Real Estate for EUR 40 mln. Bloomberg reported that Summit agreed to buy the stake at EUR 2.61 a share last Friday, a 19% discount to the closing share price of EUR 3.25 on 16 May. Following Shares of Summit rose 6 cents to EUR 1.43 in London, equalling its record. The stock has gained 43% since its initial public offering a year ago.

Summit, Morgan Stanley and Eurocastle are among international investors buying assets in Germany as employment picks up and the economy expands at a faster pace, and real estate prices and rents rise, Bloomberg noted. Last week, Morgan Stanley and Germany's largest property fund IVG agreed to buy 53 properties in the Rhine-Main and Berlin regions and an office development in Frankfurt for a total of EUR 2.5 bn from Hamburg-based fund manager Union Investment Real Estate.

'There is a way to go in the German market,' Summit Chairman John Lamb said in an interview. 'Our outlook is very positive' The company is offering to buy the remaining Deutsche Real Estate shares at the weighted average price for the past three months, which would represent a slight premium to the 16 May price, He said Summit will keep the company's listing if minority shareholders do not accept the offer. Deutsche Real Estate has EUR 300 mln of assets and will bring Summit's total to EUR 750 mln. Goldman held its Deutsche Real Estate stake in its Whitehall real estate funds.

A majority of the assets held by Summit and Deutsche Real Estate are offices, with the rest in logistics warehouses and retail properties.