LONDON (Alliance News) - Summit Germany Ltd said Monday that it will acquire a 72% stake in Frankfurt-listed GxP German Properties AG for EUR45 million.
"The acquisition is increasing our portfolio with good assets in central locations. We believe there is a substantial upside due to potential letting of vacancies and the opportunity to streamline the company's operations," Summit Germany Chairman Harry Hyman said.
The commercial property investment company will acquire GxP from Consus Real Estate AG and other minority holders. GxP owns an office portfolio of around EUR166 million in major German cities. The portfolio includes 12 properties with lettable area of 106,700 square meters.
As at March 31, the properties generated net rental income of EUR10.8 million per annum representing an implied rental yield of 6.6% and a loan-to-value ratio of 59.3%. GxP generated profit of EUR15.5 million for 2017.
The deal consideration includes an initial cash payment of EUR40 million and a further EUR5 million payable upon achievement of certain earnings conditions.
Shares in Summit Germany were untraded at EUR1.16 per share on Monday.