Aareal Bank has announced a rights issue to raise gross proceeds of around EUR 269 mln. The German listed property financier said the proceeds would be used to support growth of its Property Financing segment, and for strengthening the bank's equity base.

The bank may also use some of the proceeds to repay a further tranche of the EUR 75 mln silent participation held by the German Financial Markets. Aareal said it intends early redemption of the EUR 2 bn SoFFin-guaranteed bond maturing in June 2013, which has been held by Soffin.

Aareal said its target for new business for 2011 was being increased from EUR 7 bn to EUR 8 bn. CEO Wolf Schumacher said: 'We want to expand our new business and to further improve profitability.'