Real estate How the Adler crisis affects the bond prices of other real estate companies

Real estate How the Adler crisis affects the bond prices of other real estate companies

Real estate How the Adler crisis affects the bond prices of other real estate companies

The problems of the heavily indebted German housing company are now spreading to the bonds of other real estate companies. Investors are worried that valuations across the industry could be called into question.

Particularly noteworthy is the crash of long-term bonds from, the largest German residential group. These have good credit ratings and usually have stable prices – but this week, according to Bloomberg data, they fell below 90 cents for the first time.

“Nobody wants anything to do with German real estate, doubts about the industry are real,” says Benoit Soler, Senior Portfolio Manager at Keren Finance in Paris. “One might also ask why some competitors are so quick to bid on Adlers assets instead of waiting for a distress sale? Because this is how they secure their own assessments. “

While there is currently no evidence that Fraser Perring or anyone else targeted Adler’s competitors. Bond investors, however, have reviewed their exposure to the sector that has been prolific in terms of bond issuance over the past few years. In the era of low interest rates, the German real estate market heated up and boosted lending.

Aggregate bonds reach junk level

Aggregate bonds are now trading at junk level. Those of Holding – a company in which the owner of Aggregate was also invested – and those of Real Estate – Adler has been involved for a long time – have fallen by more than ten cents in the past three weeks and are now trading at 85 cents, show Bloomberg data.

Bonds from companies that have no known direct connection to Adler also suffer. Vivion Investments Sarl’s 2024 bonds fell to 93.7 cents, their lowest level since January. The company is part of the family of the Israeli tycoon Amir Dayan and owns real estate in and Great Britain

This is of particular interest to WiWo readers today

Signa Development Selection AG bonds due in 2026 by Austrian billionaire Rene Benko are listed at 89.5 cents, compared to 98.9 cents when they were issued in July. A bond due in 2026 by the company active in the commercial and residential real estate sector stands at 106.7 cents, the lowest level since November 2020.

For years, the real estate company has been attracting attention through dubious deals. Many investors bought the stock anyway.