Activist fund ENKRAFT has built a stake of more than 1.5% in German real estate firm AGROB Immobilien, criticising the group for failing to raise the firm’s value, according to a letter to management seen by Reuters.
AGROB, which is 81.4%-owned by funds managed by affiliates of private equity firm Apollo Global Management, has a market capitalisation of 110 million euros ($130 million), which according to ENKRAFT significantly undervalues the group.
Apollo funds had acquired an initial stake in AGROB from a unit of Italy’s UniCredit last year.
ENKRAFT reckons that based on achievable commercial rents and public real estate valuations, a valuation of more than 400 million euro for AGROB’s portfolio is more realistic.
“The supervisory board should encourage management to present and implement a convincing strategy to continually raise the value of AGROB,” ENKRAFT’s Benedikt Kormaier wrote.
“Such a strategy is not visible, neither with regard to the development of real estate assets nor with regard to the capital structure of AGROB.”
ENKRAFT also said the company had so far failed to outline plans for unused land lots it owns.
Based in the municipality of Ismaning near Munich, AGROB expands ENKRAFT’s presence in Europe’s largest economy, where it already owns stakes in renewables groups PNE, Energiekontor and ABO Invest.
Munich regularly leads national rankings in terms of Germany’s real estate prices.
AGROB Immobilien had no immediate comment.
Source: Reuters.com