Germany's Otto family is to become the leading shareholder in US real estate investment trust Developers Diversified Realty. The family, via its ECE Projektmanagement company, will dramatically increase its shareholding in DDR to over 20%.
ECE, founded in 1965 by Werner Otto, is the European market leader in the field of inner city shopping centers and a sister company of the Otto Group – the world's biggest mail order operator.
DDR, the leading owner, manager and developer of market-dominant shopping centres in the US, has welcomed the strategic investment as it looks to reduce its debt levels.
Alexander Otto (pictured), Werner's youngest son who took over the running of the company in 2000, is leading the purchase of 30 million shares in two blocks, one of 15 million at $3.50 per share and the remaining half at $4 per share.
This represents a premium of approximately 33% and 52% respectively on last week's closing price, suggesting the family sees this as an opportunity not to be missed.
"We view DDR as a valuable investment and a key stepping stone for our global expansion and partnership initiatives," confirmed Alexander, who will continue to nominate up to two directors to DDR's board of directors.
It is not the first time that the family has invested in North American real estate. The Ottos also control Paramount Group, one of the largest privately-owned property firms on America's east coast.