Adler - comment

Adler are soliciting bids for a 3,500 apartment portfolio in Berlin. These are yielding assets and could act as bell-weather for Berlin yields in general and, therefore, give some insight into the value generally underlying its ADO portfolio. While these assets should not have the risk attached that surrounds its Consus development assets, the usual bidders for such portfolios, including Vonovia and LEG are unlikely to invest their own capital at dilutive valuations and should find it difficult to attract the required financing. We are surprised that Adler are looking to sell these assets in this environment and are wondering if the move has more to do with establishing a basis for the company’s IDW S6.