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Update: Further growth steps

Adler Real Estate’s development continues to be at a rapid pace. Since we published our initiation note, exploring the financial impact of management’s growth plans in the period to the end of 2016, on 23 October 2014, a number of important developments have already been announced. Progress on non-core asset sales, completion of the 4,300 unit residential acquisition agreed by Estavis and the agreed acquisition of a majority stake in a large primarily residential property portfolio including c 6,600 residential units are all consistent with management’s plans, which we sought to mirror in our forecasts. The successful placing of 2.85m shares (c 10%) in an oversubscribed placing at €7.4 per share was not in our forecasts, but while it slightly dilutes NAV and cash flow per share, it has the positive effect of reducing gearing, and hence has no material negative impact on the potential longer term investor returns.