City Developments takes stake in Europe-focused IREIT Global in S$78 million deal

City Developments building in Singapore’s central business districtCity Developments building in Singapore’s central business district

City Developments has acquired a 12.4 percent stake in IREIT Global for around S$59.4 million and a 50 percent stake in the REIT’s manager, IREIT Global Group, for around S$18.4 million, the property developer said in a filing to SGX Tuesday.

The total consideration for the deal is around S$77.8 million, City Developments said.

IREIT Global focuses on investing in office, retail and industrial properties in Europe, and it currently has five office properties in German cities, the filing said. The REIT’s annualized yield was around 8.0 percent as of end-December, City Developments said.

Frank Khoo, City Development’s chief investment officer, said the investment was part of the company’s efforts to develop its fund management business, with a target of US$5 billion in assets under management by 2023.

“Besides being earnings accretive with immediate contribution to our recurring income through management fees and attractive yield, the investment in IREIT Global complements our existing CDL Hospitality Trusts and will strengthen our REIT management expertise,” Khoo said in the statement.

“This deal will also enhance CDL’s diversification by increasing our presence in established European economies such as Germany, which has continued to develop physical and digital infrastructure to draw in talent and capital,” he added.

In a separate filing, IREIT Global said asset management group Tikehau Capital would also be nearly doubling its stake in IREIT to 16.4 percent from 8.5 percent previously.

Tikehau Capital acquired the shares from Goodness Investments, which is an affiliate of Shanghai Summit, and from Lim Chap Huat, the filing said.

 

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