* Cerberus may list property assets as early as H2 -sources
* May list as REIT or normal property company -sources
* To decide on how to list later in year -sources
* BofA Merrill Lynch, JP Morgan, G.Sachs to organise listing
* Cerberus, banks decline to comment
FRANKFURT, April 4 Private equity group Cerberus
is mulling listing its German retail property holdings
as a real estate investment trust (REIT), in a move that could
help it avoid paying corporate tax, two sources said.
Alternatively, the U.S.-based investor could list the
buildings, which are valued at roughly 2 billion euros ($2.6
billion), as a normal real estate company, two people familiar
with the transaction said on Thursday.
International investors are flocking to the German property
market as yields on safe assets such as German bonds vanish and
as property is considered the next low-risk asset class.
A decision will be taken later this year when the
preparations for the initial public offering (IPO) are gaining
pace, said the sources, adding the listing may take place as
early as the second half of 2013.
Cerberus declined to comment.
As a REIT, the group could avoid paying corporate level
taxes if it distributes at least 90 percent of its taxable
income to shareholders in the form of dividend payments.
Germany has not seen REITs being launched since the listing
of Prime Office REIT AG in 2011.
Until now, Cerberus' retail properties - comprising mainly
Metro wholesale markets and Woolworth retail outlets -
have not been grouped together but held in different areas of
Cerberus' company structure.
Berlin-based Acrest Property Group, which is not owned by
Cerberus, is managing the buildings, which have a combined
rentable space of about 900,000 square metres.
Cerberus has hired Bank of America Merrill Lynch, JP
Morgan and Goldman Sachs to organise the listing
of the German retail properties, the sources said. The banks
declined to comment.
German property has been showing a steady rise in value in
the last couple of years, contrasting with the boom-and-bust of
Spanish and Irish real estate markets.
In January residential property company LEG Immobilien
listed on the German Stock Exchange while peer
Deutsche Annington, owned by private equity firm Terra Firma
, is set to become the next listing later in the second
quarter, sources have said.
In the German real estate market, investors can expect
yields of about 4.5 percent for the best housing and 6 percent
in secondary locations.