FRANKFURT, June 25 Private equity investor Lone
Star has asked banks to pitch for roles in a planned stock
market listing of its German commercial real estate group TLG
Immobilien, three people familiar with the situation said.
The buyout group is likely to mandate advisors before the
end of July and launch a flotation in autumn, the sources said.
The real estate company is worth about 1.5 billion euros ($2
billion) including debt, they added.
While Europe has seen a flurry of initial public offerings
(IPOs) this year, investors are getting more choosy over where
they park their money and are turning away from businesses with
the most questionable valuations.
"The IPO comes quite soon after Lone Star's acquisition of
the unit, but they have to use the current market window," one
of the sources said.
TLG Immobilien and U.S.-based Lone Star declined to comment.
Lone Star bought TLG Immobilien, which manages about 800 in
commercial properties, for 1.1 billion euros in 2012 from a
government agency that organises the privatisation of east
German companies in the wake of the reunification of Germany in
At the time, the government also sold a portfolio of
residential properties dubbed TLG Wohnen for nearly 500 million
euros to real estate group TAG Immobilien.
Germany's real estate sector has seen a string of deals in
recent months, with investors attracted by the reliable income
stream that property projects typically offer and by higher
yields than German sovereign bonds. Investors are also betting
on rising property prices in Europe's largest economy.
Earlier this year, Austria's Immofinanz spun off
its German arm Buwog into a separate company. In
February, Deutsche Annington bought residential units
worth 1.4 billion euros from Blackstone and Round Hill
Capital. In 2013, GSW and Deutsche Wohnen
merged to create Germany's No. 2 real estate company.
Over the past 10 years, TLG Immobilien has spent 1.4 billion
euros on portfolio investments and acquisitions, according to
Its office buildings, hotels and retail properties are
mainly located in eastern German cities like Berlin, Dresden and
Rostock. Landmark buildings include Kulturbrauerei, a former
brewery which now hosts restaurants and clubs, and office
building Spreestern, both in Berlin, as well as Dresden's
Zwinger-Forum, which houses a shopping arcade and a hotel.
TLG tenants include car maker Daimler and
software maker SAP.
($1 = 0.7355 Euros)
(Reporting by Arno Schuetze and Alexander Hübner; Editing by