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Peach Property Group to acquire two portfolios with 636 apartments in North Rhine-Westphalia

03-27-2015 06:47 PM CET | Industry, Real Estate & Construction

Press release from: Peach Property Group AG

• Expansion of the standardised, value-enhancing investment property portfolio in line with the business strategy
• Number of apartments owned by Peach Property Group to increase by 72% to over 1,500
• Target rent to rise by around CHF 2.25 million or 20 percent to approx. CHF 12 million
• Reduction of the currently high vacancy rate through active asset management and progressive updating of all apartments planned over the next 24 months
• Renovation of the first 110 apartments already underway and scheduled to be completed in summer 2015

Zurich, 27 March 2015 – Peach Property Group, a leading investor in residential and commercial real estate, today announced the notarisation of an agreement for the purchase of two property companies. Under this agreement, Peach Property will acquire two portfolios with a total of 636 apartments located north of Düsseldorf in western North Rhine-Westphalia. This will enable Peach Property Group to push ahead with its strategy of increasing the focus on the residential side of its investment property portfolio in conjunction with standardised value creation. The acquisition will raise the number of apartments in Peach Property Group's portfolio by 72 percent to 1,520 units and increase the lettable floor area by 44,000 square metres to over 100,000 square metres. The annual target rent is around CHF 2.25 million (EUR 2.1 million); on account of the vacancies, actual rent is currently CHF 0.9 million (EUR 0.85 million). Altogether, Peach Property Group's annual target rental income will therefore increase to over CHF 12 million. The parties agreed not to disclose the purchase price. The final closing of the transaction is expected to occur in the coming six to eight weeks.

The portfolios of rental apartments in the mid-price segment are divided among three sites in the greater Düsseldorf area. Currently, the portfolios have a high vacancy rate of around 60%, mainly because they were in administration in recent years owing to the previous owner's financial difficulties. In many parts, the level of rent in the portfolios is also significantly lower than the market rent in this area at the present time. As a result, Peach Property Group sees considerable opportunities for appreciation through professional, tenant-orientated asset management based on the planned modernisation and other measures. The annual target rent Peach Property hopes to achieve for its portfolio is thus over EUR 2.25 million. Up to EUR 6 million has been earmarked for the measures to be taken in the coming years to increase the portfolio's value. These include renovating the sanitary facilities, replacing the floor coverings and windows and installing new electrical systems in parts of the new portfolio. The exterior space will also be given a facelift in the medium term.

Dr Thomas Wolfensberger, CEO of Peach Property Group, commented: "By acquiring the two residential portfolios, we are making considerable progress in the implementation of our strategy to expand our portfolio of investment properties and further stabilisation of current revenues. With selective investments in the new properties we will significantly increase not only the occupancy rate and hence our rental income, but also the value of the properties. This is something that we also managed to do in the past with other properties in our portfolio. Take, for example, our portfolio in Munster: here, we reduced the vacancy rate by 80 percent in just over three years to three percent and increased the market value by almost 20 percent. Going forward, we will look into acquiring additional portfolios so as to continue to increase the share of investment properties in our property portfolio and boost current rental income."

About Peach Property Group AG

Peach Property Group AG is a property investor and developer focused on investments in Switzerland and Germany. The portfolio includes an increasing number of investment properties that are designed to generate sustained income as well as attractive residential development properties. The Group's activities cover the entire value chain, from site evaluation to project planning, implementation and marketing. In the investment segment, the Group is focused on properties with a potential for achieving attractive yields based on active asset management - typically secondary locations in the catchment area of urban agglomerations. In the development segment, the Group concentrates on exceptional locations and properties with high-end specifications and amenities that meet the requirements of a demanding clientele.

Peach Property Group AG is headquartered in Zurich and has its German Group headquarters in Cologne. Peach Property Group AG is listed on the SIX Swiss Exchange (PEAN, ISIN CH0118530366).

For more information, see www.peachproperty.com

Contacts:

Media, investors and analysts
Dr. Thomas Wolfensberger, Chief Executive Officer and Dr. Marcel Kucher, Chief Financial Officer
+41 44 485 50 00 | investors@peachproperty.com

Media Germany
edicto GmbH, Axel Mühlhaus, Peggy Kropmanns
Eschersheimer Landstraße 42, 60322 Frankfurt
+49 (0) 69 90 55 05 52 | amuehlhaus@edicto.de

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