CA Immobilien Anlagen AG agreed to sell two thirds of its most valuable property, Frankfurt’s Tower 185, to two German pension funds to reduce the Austrian developer’s debt and increase its ability to pay a dividend.
The funds will each buy a third of the office tower, which is valued at about 500 million euros ($680 million), CA Immo said in a statement today. The Vienna-based company will keep the remaining stake through its German unit.
The transaction “enables us to reap further benefits from both the location’s growing popularity and the special quality of this property,” Chief Executive Officer Bruno Ettenauer said in the statement.
CA Immo is cutting a portfolio that had more than doubled in value between 2006 and 2012 to become more profitable, provide a regular dividend and increase its equity ratio, a measure of financial strength. Another goal of the partial sale of Tower 185, Germany’s fourth-tallest office building, was to allocate its capital in a more balanced way, CA Immo said in January.
The company’s shares were up 4.8 percent to 11.25 euros at the 5:30 p.m. close of trading in Vienna, the highest since March 14. CA Immo was the third-best performer among the 75 members of the Bloomberg EMEA Real Estate Index.
Tower 185 was completed in January 2012, according to the statement. The tower has a height of 200 meters (656 feet) and has 100,000 square meters (1.1 million square feet) of space.
Last week, CA Immo agreed to sell 36 German office properties valued at about 800 million euros to Augsburg-based Patrizia Immobilien AG in what would be the country’s biggest commercial real estate transaction this year.
“The 40 percent equity ratio targeted by the company will be reached with the two latest transactions,” Thomas Neuhold, a Vienna-based analyst at Kepler Cheuvreux, said via telephone.
The deal announced today is “very good news” after some CA Immo investors criticized the company for the size of its debt, Neuhold said.