Madison International Realty JV Acquires Prime Shopping Center Portfolio in Germany

Shopping Center

The Christie Retail Portfolio is comprised four leading centers in key markets

FRANKFURT and NEW YORK, December 20, 2016 — Madison International Realty, a leading real estate private equity firm, announced that it has acquired a 214,000 square meter (two million-square-foot) shopping center portfolio consisting of four properties in key markets within Germany, in joint venture with Hamburg-based asset manager redos real estate. Terms of the transaction were not disclosed.

The Christie Portfolio consists of four retail centers that blend retail warehouse park and shopping center features. The assets are the dominant retail destinations within their respective areas they serve throughout greater Berlin and Dresden.

“This portfolio fits Madison’s strategy of buying established prime assets with good in-place cash flow as well as embedded value enhancement opportunities that will be driven by investments in targeted, on-site initiatives that optimize the tenancy in existing high-volume centers. Additionally, the properties are located in strong submarkets and each center has the dominant competitive position in its local area,” said Matthias Cordier, Director of Madison in Frankfurt.

“Madison has assembled financial partners that include some of the world’s preeminent institutional investors who are attracted to Germany’s positive demographic trends and real estate fundamentals, the portfolio’s strong tenant quality, and remaining value-add opportunities,” Cordier said.

Plans call for investment in refurbishments and logistical improvements, with focus on the properties in Eiche, where construction is nearing completion, and Dallgow, near Berlin, as well as the center in Dresden.

“The last three years have seen considerable enhancement and de-risking of the portfolio, and there are attractive opportunities to complete the work that was started in Eiche and Dallgow to drive further appreciation potential across the portfolio,” explained OIiver Herrmann, Managing Director of redos real estate, who will act as asset manager for all of the assets.

The portfolio is currently 90% leased, with the majority of tenants on long-term leases.  Occupying approximately 56,000 square metres (603,000 square feet), Kaufland serves as anchor tenant at all four of the properties. Additional anchor tenants include C&A, H&M, Decathlon, TK Maxx, Mueller Drogerie, and Media Markt.

Madison and redos will continue to work with the Muenster-based project developer HLG to continue the repositioning of the assets. HLG has 25 years of expertise as an investor and developer in the retail sector with notable developments in the Berlin area, including the A10 Center and Tempelhofer Hafen.

The principal legal advisors on the transaction were Freshfields Bruckhaus Deringer for Madison and Latham & Watkins for the seller.