City Developments Limited (CDL) has paid $77.7 million to acquire a 12.4 per cent stake in IReit Global and half of the European property trust's manager.

The developer bought the 50 per cent stake in trust manager IReit Global Group (IGG) for $18.36 million from Tikehau Capital, a European alternative asset management and investment group.

Tikehau, which previously owned 84.5 per cent of IGG, bought out the minority shareholder of IGG just before the deal with CDL and now holds the remaining 50 per cent interest in IGG.

CDL also shelled out $59.36 million for 12.4 per cent of IReit Global, or 78.6 million units at about 76 cents apiece. The price represents a 1.33 per cent premium over IReit's closing price of 75 cents on Monday.

Tikehau Capital has also increased its stake in IReit to 16.4 per cent, almost double its previous holding of 8.5 per cent.

IReit Global, which listed here in 2014, invests in office, retail and industrial properties in Europe.

Its portfolio, which comprises five freehold office properties in the German cities of Berlin, Bonn, Darmstadt, Munich and Muenster, is valued at €504.9 million ($770.2 million).

The five properties have an overall occupancy rate of 98.6 per cent, and the combined portfolio has an annual yield of about 8 per cent.

CDL group chief investment officer Frank Khoo has been appointed as IGG's non-executive director.

"As part of CDL's transformation, we are developing our fund management business through organic growth coupled with the acquisition of assets and platforms," Mr Khoo said.

"This investment in a Reit is in line with our aim to achieve assets under management of U$5 billion by 2023.

"Besides being earnings accretive with immediate contribution to our recurring income through management fees and attractive yield, the investment in IReit Global complements our existing CDL Hospitality Trusts and will strengthen our Reit management expertise."

City Developments shares closed down 1.65 per cent at $8.94 yesterday.