Acquisition of 4,300 apartments in NRW and Bremen / Market value of the property portfolio increases to CHF 2.5 billion
=> Real estate portfolio increases by 19 % to around 27,500 apartments at existing Peach Property locations in North Rhine-Westphalia and the Bremen metropolitan region
=> Target rental income rises from around CHF 112 million to over CHF 134 million p.a.
=> Existing portfolio in NRW reinforced, thus generating economies of scale
=> Positive effect on FFO and gross margin expected; EPRA NTA increases to over CHF 60 per share
=> Optimal mix of debt and equity to finance acquisition hence further reducing LTVs
=> New Peach Point opening in Marl to further strengthen tenant proximity
Peach Property Group, an investor specialising in the management of residential property notarized the purchase agreement for the acquisition of 4,300 apartments. The Group is thus increasing its portfolio by 19 % to around 27,500 apartments. The annual net rental income of the new portfolio amounts to approximately CHF 21 million, with a current vacancy rate of 5 percent. The properties were built between 1920 and 1990 and are predominantly in very good condition. As a result of ongoing refurbishments over the past few years and strong market growth, rental levels in the newly acquired portfolio exhibit a strong revisionary potential towards respective market levels. The market value of Peach Property Group’s real estate portfolio will increase to around CHF 2.5 billion as a result of the purchase and target rental income will rise from around CHF 112 million to over CHF 134 million. The parties agreed not to disclose the purchase price or the seller. The transaction is expected to close in the second quarter of 2021.
The new real estate portfolio includes 275,000 square meters of residential space, 800 square meters of commercial space and more than 1,500 parking spaces. With the exception of around 340 apartments in the Bremen metropolitan region, the portfolio is located in close proximity of existing Peach Property Group holdings in the Ruhr region. This will enable the Group to generate further economies of scale and leverage synergies – in addition to offering significant added value for the new tenants by integrating the new apartments into the tenant-centric business model including the existing network of Peach Points. To further strengthen its tenant-centric approach, Peach Property Group will also open an additional Peach Point in Marl, in the northern Ruhr region. Accordingly, the Group expects the acquisition to have a positive effect on the gross margin and FFO even in the short term.
In order to finance the acquisition of the new portfolio, Peach Property Group will be raising a balanced mix of debt and equity capital. Following the acquisition, the Group will thus further reduce its LTV in line with its strategy and consequently aims to improve its credit rating in the short term. The Group also expects the EPRA NTA per share to increase from CHF 57.29 to well above CHF 60,00 in the short term.
Dr. Thomas Wolfensberger, CEO, Peach Property Group AG: “After the most successful financial year in our Group’s history in 2020, we are looking forward to continuing our dynamic growth in 2021. The current acquisition in NRW and Bremen is an ideal addition of our existing portfolio. In the Ruhr region in particular, we are very well connected with our current network of six Peach Points, which will be a great advantage both for our tenants and to increase management efficiency for the new portfolio. We will swiftly integrate the new portfolio into our fully digital and efficient platform.”
Kempen & Co has been engaged by the Company to assist on certain matters relating to the financing of the acquisition.
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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
The Peach Property Group is a real estate investor and developer with an investment focus in Germany. The group stands for many years of experience, competence and quality. Innovative solutions for state-of-the-art living needs, strong partnerships and a broad value chain round off the profile. The portfolio consists of high-yield portfolio properties, typically in B-cities in the catchment area of conurbations. In addition, the Group develops real estate for its own portfolio or for condominium marketing. In the latter area, the Group concentrates on A locations and properties with attractive architecture and upscale furnishings for an international clientele. Its activities span the entire value chain from evaluating locations through to acquisitions and also active asset management and property sales or lettings.
Peach Property Group AG has its registered office in Zurich and the Group is headquartered in Cologne. Peach Property Group AG is listed on SIX Swiss Exchange (PEAN, ISIN CH0118530366). Its Board of Directors consists of Reto Garzetti (President), Peter Bodmer, Dr. Christian De Prati, Kurt Hardt and Klaus Schmitz.
More information at http://peachproperty.com