Investors around the world have got their eyes set on the German real estate market, as corporations set back-to-back records in 2019. The year proved to be the second strongest year in the history of the EMEA. Collectively, the continental European real estate market saw a significant increase in investment volume – a whopping 9% to an approximate total of €204 billion, the region’s most profitable year in recorded history.
For Germany specifically, investments totaled to €60 billion, an increase of 8% from 2018. Assets that contributed most strongly to this explosion in revenue were hotels and offices, while mixed-use assets performed well, too, as they saw a rise in investment in comparison to 2018. An example of such strong corporate growth is the merging of AroundTown SA and TLG Immobilien.
Less than 5 years after real estate mogul, Yakir Gabay, began listing AroundTown SA shares on the European exchange, Euronext, and the Frankfurt stock exchange with a share price of €3 and a market cap of €1.6 billion euros, AroundTown (ETR:AT1) is trading at €8.8 per share and rising. The conglomerate has crossed the €13 billion market cap and is well on its way to becoming one of Europe’s largest and most successful real estate corporations.
AroundTown SA’s current assets total to more than €6 billion in hotels: including 150 hotels (the majority of which 4 stars) – Bristol Kempinski Berlin and London Hilton to name two – and a recently acquired a 5-star, 109-room Swiss Hotel by the name of Seehof Hotel, located in Davos, the city which hosts annually the WEF.
In September of 2019, around the same time TLG Immobilien AG acquires AroundTown shares for €1.5 billion, AroundTown set its sights on a possible merger with TLG. From this merger, the companies would see interest values of over €13 billion and can expect to produce about €1 billion in revenue, annually. The merger would also allow AroundTown to inch closer to its goal of being included in DAX corporations and to earn an A rating from S&P. Together, AroundTown and TLG Immobilien are projected to exceed €100 million FFO synergies as well. AroundTown was accepted to exchange upwards of 77% of TLG shares via the issuing of a tender offer, which was settled on February 19, 2020.
Back in 2012, Yakir Gabay, founder of AroundTown activity, led the growth of yet another renowned real estate corporation, Grand City Properties SA (ETR:GYC).
At its’ beginning, Grand City Properties SA was traded at €2.7 and €150 million market cap. Grand City Properties is now identified as the 4th largest Germany-based residential real estate company with a €4 billion market cap. Under Yakir Gabay’s management, the corporation and its’ investors have continued to see stock rise significantly to its present value of €24, hence 800% increase since the company became public less than 8 years ago.
The company’s assets include over 2,500 apartments in London and 80,000 properties located across Germany. Market analysts are confident the post-Brexit era will appreciate the value in UK property bringing huge gains for the company and its’ investors.
The merger between Yakir Gabay, and Amir Dayan, one of TLG’s largest shareholders, is a clear illustration of the incredible real estate performance in Europe, and more specifically in Germany.