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German real estate developer Aurelis starts IPO prep, say sources – Reuters

(Reuters) – German real estate developer Aurelis has started preparations for a stock market listing that may see it sell shares worth roughly 500 million euros ($537.4 million) amid a flurry of deals in Germany’s red hot real estate sector, people familiar with the deal said.

The group, formerly a part of Deutsche Bahn, is working with advisory group VictoriaPartners on the initial public offering, which may take place later this year and may value the group at more than 1 billion euros ($1.1 billion) including debt, the three people said.

The boutique firm has been tasked with helping to choose investment banks which would organise the listing as so-called global coordinators, they added. The banks may be picked later this month and a listing could take place after summer.

“The size of the offering has not yet been finally decided and it is also unclear if any primary shares (from a potential capital increase) will be sold,” one of the sources said.

VictoriaPartners declined to comment, while Aurelis’s owner Grove was not immediately available for comment.

Hochtief, the German builder controlled by Spanish group ACS, last year sold its stake in Aurelis to co-owner Grove, giving the private equity firm founded by billionaire George Soros almost full control of the unit.

Hochtief and Grove had bought Aurelis from Deutsche Bahn for 1.6 billion euros in 2007, but some assets have been sold in the meantime.

Soros hopes to benefit from buoyant property valuations in Germany that helped underpin the stock market flotation of TLG late last year and has spurred IPO plans of other groups.

German residential property groups BGP and ADO are currently also preparing a stock market listings.

Separately, the sector is seeing a number of mergers. Among other, Deutsche Wohnen has offered to by peer Conwert .

In January, Germany’s biggest real estate firm Deutsche Annington gained control of almost three quarters of shares in rival Gagfah, for which it has made a 3.9 billion euro public offer.