Morgan Stanley Real Estate Investing is to swap its stake in Orco Germany for an interest in the parent company, Orco Property Group.
The deal will make Morgan Stanley the largest shareholder – with an 18.7% stake – in the Euronext-listed central and eastern European real estate developer.
Orco Group said it has agreed with funds advised by MSREI to acquire the US investor’s stake in Orco’s German property arm as well as the Endurance real estate funds. Orco will pay for the shares with 3m newly issued shares to be subscribed by MSREI shareholders.
As a result of the deal, Orco will increase its interest in Orco Germany to around 87.3%, while its share in the Endurance Residential and Office funds will reach 14.8% and 27% respectively.
‘Orco Property Group has set in motion its strategy of reinforcing its control over an Orco Germany portfolio focused on its Berlin investment properties,” said chief executive Jean-Francois Ott. “This is part of Orco’s strategy to focus on its core business in the four cities of Berlin, Prague, Warsaw and Budapest with the aim of simplifying the group’s structure.”
