Immofinanz AG is postponing the sale of its residential unit after investor demand for similar deals by competitors failed to meet expectations, the Austrian developer’s chief executive officer said.
Immofinanz won’t proceed with an initial public offering of its Buwog unit this year after share sales by German residential developers Deutsche Annington Immobilien SE and Gagfah SA faltered, CEO Eduard Zehetner said in an interview from Vienna today. The company, which is trying to turn into a commercial-property landlord, had been targeting an IPO as early as November in Frankfurt.
“We learned from the flops at Annington and Gagfah that the environment is apparently not one in which we can get this done this year,” Zehetner said. “We don’t want to sell in an environment like this and I don’t expect it to improve dramatically until the end of the year.”
Immofinanz is sticking to its goal of selling Buwog and will revisit the plan in the first half of next year, Zehetner said. The CEO, 61, is seeking to list Buwog and focus solely on commercial properties to improve yields and cut debt.
The Vienna-based company has 10.5 billion euros ($13.9 billion) of properties and development projects in eastern Europe, Austria and Germany, 30 percent of which is residential. Offices, stores and warehouses make up the rest.
Zehetner’s plan was to add about 10,000 German homes to Buwog’s holdings before the IPO while selling Austrian apartments to make the unit’s portfolio more like Deutsche Annington’s and Gagfah’s. He had expected to raise about 700 million euros from the sale of more than half of the unit.
Deutsche Annington had to reduce the size of its IPO this month and banks managing a sale of Gagfah shares had to pick up stakes in the company because of a lack of buyers.
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