ADO Properties (ADPPF) was a pure-play on residential real estate in German capital Berlin until recently. New regulations in Berlin came into effect in February 2019 and would have hampered growth at a 100% Berlin entity. Rents in Berlin are frozen and can even be reduced by tenants if they exceed 120% of comparable rents. Renovations in Berlin cannot lead to easy rent increases with astronomic IRRs (internal rate of return) anymore.
Management's solution to the deteriorated growth outlook is the transformational takeover of Adler (ADREF), which was announced in December