DGAP-News

KWG Kommunale Wohnen AG: KWG signs Purchase Agreement for 2,908 residential and commercial units

DGAP-News: KWG Kommunale Wohnen AG / Key word(s): Real
Estate/Agreement
KWG Kommunale Wohnen AG: KWG signs Purchase Agreement for 2,908
residential and commercial units

20.12.2012 / 16:33

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- Largest acquisition in the company´s history
- Purchase price EUR 89.5 mn
- Expected NAV increase by one EUR per share
- Portfolio size grows to approx. 10,000 units

Hamburg - 20 December 2012 - KWG Kommunale Wohnen AG, the long-term
oriented property holding company of German residential real estate, today
has signed the purchase agreement for the biggest acquisition in its
history. As the economic ownership of the portfolio will be transferred to
KWG per 31 Dec 2012 KWG will consolidate the portfolio on its balance sheet
for 2012 already. The portfolio which has been acquired by means of an
Asset Deal encompasses 2,908 residential and commercial units with a total
lettable area of 202,146 sqm. Thus, KWG increases its total portfolio size
to almost 10,000 units and has doubled its size over a period of 18 months
only.

KWG acquires the portfolio for a purchase price of EUR 89.5 mn, implying
9.2-times of the current annual rental income. KWG plans to increase rental
income by employing significant refurbishment measures and by reducing the
current vacancy of around 24% to the level of KWG´s existing portfolio. For
2012e KWG expects a vacancy rate of approximately 2% in its core portfolio.
KWG has already planned in detail respective measures to reduce vacancy and
has secured related financing. After reducing the vacancy level KWG expects
a further significant increase of the portfolio´s yield. The purchase price
per sqm amounts on EUR 443 only, while KWG´s existing portfolio is valued
at EUR 758 on KWG´s balance sheet per 30 Jun 2012.

The residential and commercial units are located in Berlin (608 units) and
North-Rhine-Westphalia (2,300 units), i.a. in Bochum, Duesseldorf and
Wuppertal. Through the acquisition KWG increases its portfolio in locations
where it is already represented and expects to generate significant
synergies. Recently acquired Barmer Wohnungsbau AG will function as KWG´s
strategic competence centre in North-Rhine-Westphalia and will handle the
property management of KWG´s portfolio within the region.

KWG aims to sustainably increase the FFO-contribution of the portfolio to
approximately EUR 3.0 mn by reducing vacancies, introducing refurbishments
and adaptions of rent to market levels. Through the planned adjustment of
the portfolio KWG expects a cash inflow in excess of EUR 5.0 mn in the next