Instone Real Estate acquires the residential property development activities pooled in S&P Stadtbau from Sontowski & Partner Group

Essen/Erlangen, 16 August 2019: Instone Real Estate, one of Germany's leading residential developers, has entered into a definitive agreement with Sontowski & Partner Group to acquire the residential property development activities pooled in S&P Stadtbau. With this strategic acquisition in the growth region of northern Bavaria, Instone is further expanding its market position.

With the acquisition Instone will also strengthen its platform by adding 20 experienced professionals to its team. In addition to the regional platform, Essen-based Instone will also be acquiring 6 existing project developments as part of the transaction. Two of these projects will be mixed-use urban quarter developments, where Instone will take over the development of the residential sections, while S&P Group remains responsible for the commercial parts. In total, the projects involve the development and construction of around 1,000 residential units over the coming years, with an anticipated total sales volume of EUR 300m.

Kruno Crepulja, CEO of Instone Real Estate, explains: "Through this transaction, we have succeeded in expanding into a new and strategically important region. At the same time, we are adding an established and experienced management team with first-class development expertise to our platform. "With the S&P Stadtbau activities, Instone is acquiring one of the premier property developers in the rapidly growing metropolitan region of Nuremberg; one that realises complex residential properties through the entire value chain. We are also complementing our existing activities in the greater Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Leipzig, Munich and Stuttgart areas."

Klaus-Jürgen Sontowski, Managing Partner of Sontowski & Partner Group, adds: "With Instone, we have found the ideal long term partner for a continued expansion of the residential property development activities..The S&P Stadtbau team has performed outstanding work here in the region and, going forward, will continue to create fresh impetus as part of a national champion, operating on a nationwide scale". For Sontowski & Partner Group, the divestment of its residential development activity is an important strategic step in refining its corporate profile.

Integration of S&P Stadtbau's residential property development activities into Instone Real Estate is expected during the current calendar year. "This will immediately enable us to implement sustainable urban quarter developments in locations we did not previously operate in. As are result we are now in a position to contribute to the creation of urgently needed living space in a dynamic growth region", says Crepulja.

Within the framework of the transaction, Instone Real Estate and Sontowski & Partner Group have also agreed close future cooperation in various areas, including third party sales as well as in the context of mixed commercial and residential developments. Sontowski & Partner Group will focus on the development of commercial real estate and investment concepts for, among others, senior citizen housing (BayernCare) and family-oriented terraced and semi-detached homes (HBP Hausbaupartner).

Going forward, Instone will realise the residential portion of any joint mixed-use urban quarter developments. As a further strong signal of the strategic partnership, Sontowski & Partner Group, intends to acquire Instone shares for a single-digit million amount during the current year and, with the intention to keep a long-term position in the nationwide market for residential project developments.

Closing of the transaction is expected by 31 August 2019. VICTORIAPARTNERS acted as financial advisors to Sontowski & Partner Group.

About Instone Real Estate (IRE)

Instone Real Estate is one of Germany's leading residential developers and is listed in the Prime Standard on the Frankfurt Stock Exchange. The company develops attractive residential and multi-family buildings as well as publicly subsidised housing; designs modern urban quarters and refurbishes listed buildings for residential use. Buyers are mainly owner-occupiers, private investors and institutional investors. In 28 years, Instone Real Estate has successfully developed more than one million square metres. Around 340 employees work at eight locations nationwide. As of 31 March 2019, Instone Real Estate's project portfolio comprised 45 development projects with an expected total sales volume of roughly EUR 4.8 billion and more than 11,000 units.

Sontowski & Partner Group

As an initiator, project developer, builder and investor, Sontowski & Partner Group (S&P) spans the entire real estate value chain. Since 1984, S&P has realised complex projects in the commercial, residential and nursing real estate sectors. In addition, forward-looking start-ups and strategic cooperations have seen Sontowski & Partner develop into a major investment company that successfully implements regionally-proven real estate concepts on the domestic and international stage.

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