Acquisition of more than 3,650 apartments in Germany – value of investment portfolio increases to around CHF 1.1 billion
-> Peach Property’s portfolio grows from just under 8,800 to almost 12,500 apartments as a result of the transaction
-> Lettable living space increases by 221,000 to more than 785,000 square meters
-> Newly acquired portfolio generates around CHF 14.4 million in actual rental income per annum; target rent of the entire Peach portfolio rises by almost CHF 16 million to more than CHF 62 million
-> Strengthening of existing locations through the acquisition of properties in the Ruhr area, Bielefeld and Kaiserslautern
-> Portfolio has further substantial value creation potential through active portfolio management
-> With the acquisition, Peach substantially exceeds previously announced medium term goal of 11,000 apartments; it will however continue its substance-oriented growth
Peach Property Group, an investor specialising in the management of residential property in Germany, has further expanded its residential real estate holdings by acquiring 3,672 apartments. The corresponding purchase agreements were notarized, with closing of the transaction scheduled for the end of December 2019. It has been agreed not to disclose the seller or purchase price. The acquisition will be financed through a mix of debt and equity in line with Peach Property Group’s financing strategy to maintain a path of growth and solid capitalization.
The portfolio comprises apartments in the Ruhr area – in Bochum, Essen, Gelsenkirchen and Velbert – as well as in Bielefeld and Kaiserslautern and thus strengthens Peach Property existing regional locations allowing for further economies of scale in the management. The newly acquired portfolio generates an annual net rent of around CHF 14.4 million (EUR 13.3 million) on roughly 221,000 square meters of living space. The current rent level is in several locations significantly below the current market level and the lettings of the past 12 months. In addition, there is considerable upside potential by optimising the vacancy rate in the portfolio, which is currently just under 9 percent. Peach Property believes that it will be able to reduce the vacancy rate within one to two years of closing, moving closer towards market vacancy rates of between 3 and 5 percent. In addition to other elements, an important factor to achieve this will be the tenant-centric “one touch” portfolio management approach, which Peach Property is already successfully implementing to reduce vacancies in its existing portfolio. Among others, new Peach Points in Gelsenkirchen and Erkrath as well as additional personnel in the Peach Points in Kaiserslautern, Oberhausen and Bielefeld are planned in order to be able to care for our additional tenants.
The transaction will increase Peach Property’s residential portfolio to more than 12,450 units with a market value of around CHF 1.1 billion by the end of 2019. The lettable area increases by 221.000 square metres to 785.000 square meters and the potential rent of the portfolio by approximately CHF 16 Mio. to more than CHF 62 Mio.. Peach Property expects a net asset value (NAV at market value) per share in the area of CHF 39.00 (fully diluted) and CHF 45.00 (undiluted) and plans to continue its substance-oriented growth in the coming years.
Dr. Thomas Wolfensberger, CEO of the Peach Property Group: “With the current acquisition our portfolio size increases by over 40 percent to more than one billion, which makes Peach attractive to additional investors. In doing so we perfectly complement our existing locations which allows us to further build on our core strengths of tenant focus and leverage our highly digital platform. The growth is accompanied by a significant surge in net asset value at the end of the year. In the coming years, we will to continue to grow dynamically and will remain committed to our investment focus on attractive residential properties, typically in German B-cities in the vicinity of major urban agglomerations.”
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Dr. Thomas Wolfensberger, Chief Executive Officer and Dr. Marcel Kucher, Chief Financial Officer
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About Peach Property Group AG
Peach Property Group is a property investor and developer focused on investments in Germany. The Group stands for long time experience, competence and quality. Innovative solutions for modern housing needs, strong partnerships and a wide value chain complete the profile of the Group. The portfolio consists of an increasing number of high yield investment properties, typically in B-cities in close reach to metropolitan areas. In addition, the Group develops properties for its own portfolio or for the sale as condominium. Developments for sale focus on A-locations and encompass attractive architecture and high level furnishing for an international clientele. The business activities of the Group cover the entire value chain, from property acquisition and site selection to active asset management and finally to the sale or lease of properties.
Peach Property Group AG is headquartered in Zurich and has its German Group headquarters in Cologne. Peach Property Group AG is listed on the SIX Swiss Exchange (PEAN, ISIN CH0118530366). Its Board of Directors consists of Reto Garzetti (President), Peter Bodmer, Dr. Christian De Prati and Kurt Hardt.
For more information, see http://peachproperty.com