Adler Group SA, the indebted landlord that’s attempting to sell off assets and repay long-suffering creditors, is quitting a voluntary alliance with the state of Berlin intended to cap rent hikes at 11% every three years.
(Bloomberg) — Adler Group SA, the indebted landlord that’s attempting to sell off assets and repay long-suffering creditors, is quitting a voluntary alliance with the state of Berlin intended to cap rent hikes at 11% every three years.
Adler will increase rents in existing contracts to “align the interests of our stakeholders, including our tenants as well as our shareholders and creditors,” the company said in an e-mailed statement on Tuesday, without saying by how much.
Adler owns and manages approximately 26,100 residential rental units, with about two-thirds of those located in Berlin. It was one of several large corporate landlords that joined the pact for new and affordable housing, in force since last year, committing to increase rents by no more than 11% over three years, compared with a legal maximum of 15%.
Berlin’s Department for Urban Development, Construction and Housing contacted the company after becoming aware of rent increases exceeding the guideline rate. The department requested that Adler fulfill its obligations under the agreement.
“I very much regret that the Adler Group, as a large housing company, has not complied with the voluntary commitments from the alliance,” State Senator Christian Gaebler said in a separate statement.
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Once one of Germany’s largest landlords, Adler had a portfolio of close to 70,000 homes financed with more than €8 billion ($8.7 billion) of debt and boasted a market capitalization of €3.4 billion at its height. After a series of scandals, it’s now worth just €85 million.
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