by Property Forum | Investment

Via a subsidiary, TAG Immobilien AG signed an investment agreement to acquire 100% of the shares in Vantage Development S.A. with a simultaneous carve-out of its commercial real estate business which will be repurchased by the selling shareholders. The total transaction consideration amounts to c. €131 million, of which c. €46 million relate to the commercial real estate business unit. As a result, the total net consideration for TAG amounts to c. €85 million for the residential business and platform of Vantage Development.

The total transaction consideration will be fully paid by TAG's existing cash. The selling shareholders have committed to tender 100% of the shares outstanding. Closing of the transaction is expected in Q1 2020 and remains subject to mandatory anti-trust clearance. After completion of the transaction, delisting of Vantage Development's shares, currently listed on the Warsaw Stock Exchange, is intended.

Vantage Development is a leading real estate developer focused on the economically strong region of Wroclaw in the western part of Poland with proven track record of more than 4,000 units completed and delivered. The secured residential pipeline currently consists of several residential projects in Wroclaw representing a total of c. 5,300 units. Thereof, according to TAG's assumptions, up to c. 3,400 units could be held upon completion as yielding assets on the balance sheet to form the nucleus of TAG's rental portfolio in Poland, whilst the remainder of the development pipeline is already in the process of being sold down against cash between 2019 and 2021.