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Covivio to launch takeover offer for Godewind

Yesterday, Covivio published its decision to launch a voluntary public takeover offer for all shares in Godewind Immobilien AG (“Godewind”), a listed office property company active in Germany. The offer is launched for EUR 6.40 per share and has the full support of both the Management Board and the Supervisory Board of Godewind. Covivio has secured up to approx. 35% of Godewind’s fully diluted share capital. Following the closing of this major investment, the company will have critical mass in the German office real estate market with a total portfolio of €2.1 Bn 1.

This transaction will enable Covivio to acquire a core portfolio of 10 offices buildings (290,000 m²) valued at €1.2 Bn and located in Frankfurt (40% of the portfolio), Düsseldorf (28%), Hamburg (24%) and Munich (8%). These 4 cities are among the Top 10 biggest European offices markets alongside Paris, Berlin and Milan where Covivio is already active.

A transaction supported by Godewind’s Management, Supervisory Board and key shareholders The offer will be conducted through Covivio X-Tend AG, a wholly owned indirect subsidiary of Covivio. Yesterday, Covivio, Covivio X-Tend AG and Godewind entered into a Business Combination Agreement, which contains the principal terms and conditions of the offer and the parties’ mutual intentions and understandings. On the basis of the business combination agreement, the Management Board and Supervisory Board of Godewind welcome and support the offer.

Furthermore, Covivio has secured up to approx. 35% of Godewind’s fully diluted share capital 2. It entered yesterday into definitive agreements with various shareholders of Godewind, who are selling at a price of €6.40 per share, subject to anti-trust conditions. Additionally, Godewind has committed to tendering all of its treasury shares into the offer.

Covivio currently intends to conduct the offer in a fashion that satisfies the requirements for a delisting under German law and has entered into corresponding contractual arrangements with Godewind.

Regulatory clearance is expected to be obtained prior to the commencement of the tender offer which will commence with the acceptance period by end-March. The end of the public offer and the delisting by the Management are currently expected to occur by end-May 2020.

A high-quality portfolio located in Germany's most dynamic cities
The offices market in Germany has some of the strongest fundamentals in Europe. Since 2014, take- up in the 7 major German cities has been growing by 6% per year, while immediate supply has been shrinking by 17% per year. Low vacancy rates, 2% in Berlin and Munich, 3% in Hamburg and less than 6% in Frankfurt and Düsseldorf, combined with available supply under construction representing on average one year of take-up, are fueling rental growth (+4% expected in 2020) 3. Covivio will deploy asset management work on this portfolio focused on reducing vacancy rate and increasing rents. The expected investment yield is 4.7% following current vacancy reduction (~8%; 4.3% immediate yield) and potentially >5.0% given the value creation levers (reversionary potential above 10% and a potential 15,500 m² development in Munich).

After completion of this transaction, Covivio will own an offices portfolio in Germany with a critical size of €2.1 Bn 4, spread across the main German cities: Berlin (38% of assets by value, including the development project of a mixed-use tower of 60,000 m² at Alexanderplatz), Frankfurt (23%), Düsseldorf (16%), Hamburg (14%) and Munich (7%).

"Covivio is continuing its European development and is now reaching an important step in its growth in Germany. With this acquisition, Covivio creates a €2.1 Bn offices platform located in Germany's most dynamic cities. As in France and Italy, Covivio intends to contribute to the design of the city of tomorrow and to offer high-performance, flexible and service-oriented spaces”, underlines Christophe Kullmann, Chief Executive Officer of Covivio.