LUXEMBOURG (dpa-AFX) - Aroundtown SA (AT1.DE), a real estate company, said its subsidiary Grand City Properties SA (GCP) has acquired a 20.04% stake in German residential property company LEG Immobilien SE, increasing the group's exposure to the country's housing market.
The investment is expected to boost Aroundtown's funds from operations (FFO I) per share by around 15% on a pro-rata basis. LEG Immobilien shares offer an FFO I yield of more than 13%, which Aroundtown considers more attractive than comparable direct property acquisitions.
The book value of the equity represented by the acquired stake was approximately €1.8 billion as of June 2026, according to LEG Immobilien. Aroundtown said the shares trade at a substantial discount to this value, potentially allowing the group to recognise a significant one-off, non-cash profit under certain conditions in accordance with IFRS.
Aroundtown added that it may increase its stake to as much as 29.9%, reduce its holding at short notice or sell part or all of the investment, depending on market conditions.
The deal will make residential property Aroundtown's largest asset segment, accounting for 42% of its total portfolio, including its proportional share of LEG Immobilien. Including hotels, the group's living segment will account for nearly 60% of the portfolio, up from 53%.
LEG Immobilien has a large residential portfolio concentrated in German markets, particularly North Rhine-Westphalia. Its low vacancy rates, stable rental income and favourable supply-demand conditions support recurring cash flows.
Kamaldeep Manaktala, Deputy CEO of Aroundtown said, 'We see the investment in LEG Immobilien as transformative, as it complements our recent actions taken to increase the living segment of our portfolio, where we increased our stake in GCP, converting office space into serviced apartments, and investing into our hotel portfolio.'
On the Xetra, Aroundtown shares were up about 2% at €1.3760 on Wednesday.
Copyright(c) 2026 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2026 AFX News
