Debt reduction Adler Group wants to part with another real estate package

Debt reduction Adler Group wants to part with another real estate package

Debt reduction Adler Group wants to part with another real estate package
Most of the apartments are located in eastern Germany.  Source: dpa

The real estate investor Adler Group wants to part with another real estate package in order to reduce its debts. Adler had signed a letter of intent with an investment fund on key points for the sale of almost 15,000 apartments, mainly located in eastern Germany, the company announced on Tuesday.

The agreed property value is more than one billion euros and is thus above the book value of the portfolio as of June 30, 2021. The buyer, whose name Adler did not mention, wanted to take a closer look at the real estate package. The aim is to complete the transaction by early 2022. With this, Adler also wants to end the announced sales of parts of the real estate portfolio.

Adler had already announced the sale of over 15,000 apartments to the real estate group LEG. The bottom line is that the investor – after the repayment of secured loans – will receive around 800 million euros, which will be used to reduce debt.

In the transaction announced on Tuesday, it should be around 600 million euros. Overall, the loan-to-value ratio (LTV), which is important for the debt level of real estate groups, should fall to below 50 percent – in the first half of the year it was just under 55 percent.

The Adler Group is under double pressure: On the one hand, investors are calling for debt relief. On the other hand, the British short seller Fraser Perring raises allegations against the company, which had depressed the price of Adler shares.