Adler Seeks New Valuer for Assets Disputed by Viceroy Report
(Bloomberg) -- Embattled landlord Adler Group SA is seeking a new valuer for some of its most contentious assets following accusations by Fraser Perring’s Viceroy Research that the company had inflated their worth.
The German firm invited real estate brokers to bid for a role valuing its development portfolio late last month, people with knowledge of the process said. The successful broker will assess the value of the company’s pipeline of construction projects which has been in focus because of widespread delays, they added, asking not to be identified because the process is private.
A spokesman for Adler didn’t respond to requests for comment.
Adler was plunged into turmoil in early October when Viceroy published a report including allegations that the firm’s approach to valuation was aggressive and out of step with peers. The company rejected the allegations and said it would appoint external independent advisers and auditors to conduct a comprehensive review, without specifying that the process would include a revaluation or providing further details.
Adler has also pledged to provide a more detailed response to the Viceroy report. While executives at the company have yet to speak publicly about the allegations, Cevdet Caner, the Austrian tycoon whose family owns a minority stake, has given interviews dismissing the research as fabrication. Caner’s lawyer has also filed a criminal complaint against the short-seller.
Adler’s 3.7 billion euro ($4.2 billion) development portfolio was last valued by NAI Apollo, and was then reviewed by KPMG, the landlord said in a statement last month. The portfolio includes projects owned by Consus Real Estate AG, several of which have stalled or are behind schedule, Bloomberg News has reported.
It’s unclear whether any new valuer will have time to conduct a full independent assessment of the development portfolio before Adler reports earnings at the end of November.
CBRE Group Inc. is the valuer for Adler’s so-called yielding portfolio of existing apartments which is valued at about 8.9 billion euros. Adler is selling off large chunks of that portfolio to rival LEG Immobilien SE and private equity firm KKR & Co. in a bid to raise cash and pay down debt.
While sales of those assets at book value would confirm Adler’s reported numbers weren’t inflated, the appointment of a new valuer to assess the development projects is designed to further reassure investors.
So far the company’s efforts have done little to resuscitate its share price. Adler currently has a market value of around 1.3 billion euros after a sharp-sell off following the Viceroy report, meaning the company trades at a steep discount to the reported value of its properties.
Meanwhile, German apartment prices in major cities have continued to rise even as the crisis around Adler has unfolded. Rival landlord Deutsche Wohnen on Friday reported a 1.5 billion euro increase in the value of its properties for the first nine months of this year, while Vonovia SE last week announced a 2.6% like-for-like increase in the third quarter.
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