UPDATE 1-Immofinanz hopes Buwog unit will join Frankfurt's MDAX

Thu Feb 13, 2014 6:11am EST

* Immofinanz aims for MDAX for Buwog listing

* Listing planned around April 28

* No current plans for Buwog capital increase (Adds details on Buwog expansion plans, banks, shares, analyst comment)

VIENNA, Feb 13 (Reuters) - Austrian property group Immofinanz hopes its Buwog residential unit will join Frankfurt's mid-cap MDAX index after its shares are listed, its chief executive said on Thursday.

Immofinanz said late on Wednesday it would spin off an initial 51 percent of Buwog to its shareholders to separate its more conservative portfolio of German and Austria homes from its eastern European commercial assets.

"We'll have to see where we fit by revenue and size. We'd like to be where our peers are. Of course, we would like to be in the MDAX," Eduard Zehetner told a news conference.

Buwog's net asset value is 1.6 billion euros ($2.2 billion). Its German peers, Deutsche Wohnen and Deutsche Annington, trade on the MDAX at around their net asset value.

Zehetner said he aimed to list Buwog in Frankfurt, with secondary listings in Vienna and Warsaw, on April 28, although an 892 million-euro acquisition of 18,000 German homes to add to Buwog's portfolio may close later in the April-June second quarter.

He said he was confident that the homes deal announced late on Wednesday, which was a year in negotiation, would go through, and he wanted to start the new financial year on May 1 with two distinct companies.

Immofinanz shares were up 0.5 percent at 3.54 euros at 1054 GMT, outperforming a 0.3 percent decline in the European real estate index.

The acquisition will raise Buwog's rental income to 4.55 euros per square metre from 4.22 currently, and lower its vacancy rate to 4.4 percent from 5.3 percent.

"The purchase price of 892 million euros implies a gross (rental) yield of 7.6 percent which is in line with current market prices in our view," Baader Bank analyst Christine Reitsamer, who rates Immofinanz "hold", wrote in a note.

Buwog's Chief Executive Daniel Riedl said Buwog planned to make more acquisitions in Germany at a rate of at least 3,000 to 4,000 flats per year, which it could finance from its dividend payments from Immofinanz.

"If we raise more capital, then more possibilities arise," he said, adding that there were currently no concrete plans for a capital increase. ($1 = 0.7359 euros) (Reporting by Georgina Prodhan; Editing by Michael Shields and Pravin Char)

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