Up until now, it seems like 2019 will be another fruitful year for Aspen Group, the publicly traded real estate company, which managed to secure two important deals in The Netherlands and Germany. Registered on the Israeli stock exchange and with over 30 years of experience in real estate, the company currently owns over 375,000 square meters of yielding properties, rented out to over 260 tenants, at approximately 95% occupancy rate.
Aspen Group is currently valued at NIS 400 million and it’s engaged in the acquisition, initiation, rental, management, and improvement of rental properties that include offices, services, commerce, industrial, and logistics buildings located mainly in Germany, Israel, and The Netherlands.
Logistic center sold for €50 million in The Netherlands
In mid-May, the company announced that it managed to sell a logistics center in the city of Almelo for about €50.6 million, recording a pre-tax profit of €6.3 million, giving free pre-tax cash flow and related expenses of approximately €24.6 million. According to the information available on the Group’s website, Aspen acquired the property back in 2012 for €25 million and invested another €9.5 million for renovation and expansion of the lessee – Timberland – on an adjacent land division.
With Tsofit Harel as CEO and Ofir Eyal Bar as one of the main partners, the company holds 14 rental properties in The Netherlands after the sale, all located mainly in the office area. Based on a note issued by the company, it continues to look after other opportunities in order to expand its property portfolio in the country. The company’s CEO welcomed the deal, and praised the importance of the realization:
“We also completed the sale of the logistics center leased to Timberland in the Netherlands – an important realization that left the company with significant capital and cash flow. We will continue to work to improve the company’s portfolio of assets and to identify business opportunities in Israel and abroad.”
Office building sold in the Stuttgart area of Germany
The record for profit was set a second major transaction, when Aspen Group managed to secure another important deal for the year, after signing an agreement to sell an office building located in the town of Fellback, Stuttgart, Germany. The transaction took place in exchange for €48 million, leaving the company with a record €8 million in profit, pre-tax and other related expenses, and €18 million in free cash flow.
Purchased back in 2014, the sold property covers 19.9 square meters and involved a partnership with Shlomo Insurance Company. Leased to the State of Baden-Wurttemberg, the property had a book value on the eve of the sale at approximately €36.5 million.
Given the existing partnership, Aspen Group holds 70% of the property company, while Shlomo Insurance Company has the remaining 30%. Tsofit Harel, the company’s CEO praised this second deal, as well:
“We have identified the property as having significant potential, and alongside growth in the German office market we have achieved an attractive return on investment.”
We can conclude that 2019 had been a fruitful one for Aspen Group, which managed to end the first quarter with a 12% increase in revenue to NIS 64 million, and also a 19% net profit growth as compared to the same quarter a year ago. Both Germany and The Netherlands are expected to be in the focus of the company, favored by better economic conditions. As Southern Europe seems to be exposed due to high levels of debt-to-GDP, these two countries should benefit from sustainable debt levels and thus the real estate market might continue to expand at a consistent pace.