In 2014, real estate tycoon, Yakir Gabay, began listing AroundTown SA shares on the European exchange Euronext (Paris), and the Frankfurt stock exchange in Germany with a share price of €3 and a market cap of €1.6 billion euros.
AroundTown (ETR:AT1) is currently trading at €8.8 per share and is continually appreciating in value as the company recently crossed the €13 billion market cap and is well on its way to becoming one of Europe’s largest, most successful real estate corporations.
In September of 2019, around the same time TLG Immobilien AG acquired AroundTown shares from Yakir Gabay for €1.5 billion, the real estate giants entered into discussions on a possible merger seeking to benefit corporate interests and investors. In December 2019, AroundTown announced its’ acceptance to exchange upwards of 77% of TLG shares with its own, via the issuing of a tender offer to TLG, which was finally settled on February 19, 2020.
The merger of TLG interests into AroundTown is valued at over €13 billion and expected to produce over €1 billion in annual revenue. According to insiders, the merger is said to have additional public market investor benefits for AroundTown such as allowing it to become included in the DAX (listing the top 30 German public companies) and earn an A rating from the S&P 500. Now that the merger is finalized, AroundTown and TLG Immobilien are projected to generate in excess of €100 million FFO synergies boosting its purchasing power and revenue even more.
AroundTown SA’s current assets total over €28 billion, making it Germany’s largest publicly listed real estate conglomerate. With more than €6 billion euros invested into 150 hotels (the majority of which 4 stars) – including the Bristol Kempinski in Berlin and the London Hilton to name a few, along with the 5-star, 109-room Swiss Hotel by the name of Seehof Hotel, located in Davos, which is known for hosting the annual World Economic Forum (WEF).
Global investors have been focusing on the German real-estate market for quite some time, as the European country recently set back-to-back records in 2018 and 2019. The past year has proved to be the second strongest annum throughout the history of the EMEA (Europe, Middle East & Africa).
For Germany specifically, investments totaled to €60 billion, an increase of 8% from 2018. Assets that contributed most strongly to this explosion in revenue were hotels and offices, while mixed-use assets performed well, too, as they saw a rise in investment in comparison to 2018. An example of such strong corporate growth is the merging of AroundTown SA and TLG Immobilien.
The continental EU real estate market has seen a significant increase in investment volume – an amazing 9% to an approximate total value of €205 billion, making it historically the most profitable year recorded.
Back in 2012, Yakir Gabay, founder of AroundTown SA, led the growth of yet another German listed real estate conglomerate, Grand City Properties SA. At its genesis, Grand City Properties SA was traded for €2.7 with a €150 million market cap. Today, Grand City Properties is now known as the 4th largest German-based residential real estate company with a €4 billion market cap.
Under Mr. Gabay’s management, the real-estate corporation has continued to see its stock rise year after year to its current value of €24. To put things in perspective, that’s an 800% increase for investors.
The merger between AroundTown SA management led by Yakir Gabay and TLG-Immobilien investors and by TLG’s main shareholder Amir Dayan demonstrates best the potential to profit from real-estate investments on the public market in general, but also in Germany in particular.