Orco Property Group has reached agreement with a Morgan Stanley-managed investment vehicle to allow Orco to increase its share in its German unit.

Paris-based Orco signed a deal with MSREF V Turtle vehicle, which owns 29% of Orco Germany, and Orco Germany to allow Orco to convert its EUR 17.6 mln shareholder loan in Orco Germany into 11 million new shares. The conversion price was set at EUR 1.69 per share.

The agreement increases Orco Property Group’s control from 58.1% to a 65% stake in its subsidiary. This agreement will be presented for approval at the Extraordinary General Meeting of Orco Germany.

'This shareholder loan restructuring allows the group to secure its investment in Orco Germany, increase control on its subsidiary and collect more benefits from Orco Germany's restructuring,' the company said in a statement. In Germany, the group owns a 972,000 m2 portfolio mostly composed of offices.

Additionally, the company has reached a refinancing agreement for its Central European hospitality portfolio in Central and Eastern Europe. Hospitality Invest, a joint venture between Orco and an institutional fund managed by AIG Global Real Estate, has restructured EUR 82 mln of debt on its portfolio consisting of 12 hotels.

The Central European property investor and developer is also progressing in its discussions to restructure another EUR 36 mln shareholder loan in Orco Molcom, which focuses on warehouses, and to secure the financing of the Zlota tower in Warsaw.

Orco also said that it has secured financing of two of its main projects in Budapest, Vaci 1 and Paris Department Store. At the beginning of October, Orco signed a new financing agreement with Italy's UniCredit which should finance 75% of all costs of construction of Váci1, a 10,000 m2 retail centre, and Paris Department Store, a 6,000 m2 mixed-use building.