German property group DIC Asset to buy German Estate Group (updated)

TTL Beteiligungs und Grundbesitz AG

05/06/2019 09:32

(Adds share price, background)
    FRANKFURT, June 5 (Reuters) - German property group DIC
Asset  DICn.DE  has agreed to buy German Estate Group (GEG) for
225 million euros ($253 million) in cash from real estate
investor TTL  TTOG.DE  and private equity firm KKR  KKR.N , the
companies said on Wednesday. 
    GEG is an investment management platform specialised in
commercial real estate properties that are placed with
institutional investors. With 3.6 billion euros in assets under
management, it owns landmark properties such as the Sapporobogen
in Munich and the Garden Tower and Villa Kennedy in Frankfurt.
    The deal will result in a significant increase in
profitability per share, DIC Asset said, and raised its core
profit (FFO) guidance for 2019 to 88-90 million euros from 70-72
million.
    Following the deal, DIC Asset's assets under management
(AUM) in its institutional fund business will rise to more than
5 billion euros. That unit will in the future account for
roughly half of the company's profits. 
    In total, DIC Asset's AUM are set to rise to 7 billion
euros.
    Shares in TTL, whose subsidiary TTL Real Estate owns 75% in
GEG, fell 6% on the news while DIC Asset shares were up 4%. 
    GEG was founded in 2015 by TTL and KKR and was until April
led by Chief Executive Ulrich Hoeller, who previously headed DIC
Asset and who will serve at the helm of a different property
firm, ABG, from next year.
    DIC Asset already handles the property management for the
majority of GEG's assets.     
($1 = 0.8877 euros)

 (Reporting by Arno Schuetze, editing by Riham Alkousaa and
Thomas Escritt)
 ((arno.schuetze@thomsonreuters.com; +49.69.7565.1197; Reuters
Messaging: arno.schuetze.reuters.com@reuters.net))