Invesco Real Estate (IRE) has announced the purchase of the Designer Outlet Centre in Wolfsburg (DOW), northern Germany on behalf of its separate account client, Bayerische Versorgungskammer (BVK).
The asset has been purchased from Europa Capital and its partner Hans Dobke, principal of Outlet Centres International (OCI). As part of the transaction, Hans Dobke will retain a minority equity interest and OCI will continue the day-to-day management of the centre in conjunction with IRE.
Although financial details were not disclosed, PropertyEU understands that the deal amounted to around €150 mln, with financing being provided by bank BayernLB.
Contrary to other designer outlets, the 17,500 m2 DOW occupies an inner city location. The scheme is currently home to over 70 national and international brands including anchor tenants such as Abercrombie & Fitch, Adidas, Calvin Klein, Michael Kors, Nike, Polo Ralph Lauren and Tommy Hilfiger. It benefits from annual footfall of over 2.6 million visitors each year.
Europa Capital acquired a majority interest in the property in October 2012, replacing original equity backer Lehman Brothers Europe RE and funded the development of a second phase, which was completed in December 2013, growing the centre from 11,580 m2 with 56 retail units centre to 17,630 m2 and 85 retail units.
IRE plans to embark on a 4,500 m2 development of the property to increase its tenant base and parking facilities, thus increasing the number of units to 100, according to Steffen Pilopp, senior director - fund management at IRE.
Nic Fox, partner and head of Middle Europe at Europa Capital, said 'This sale to Invesco on behalf of BVK, which will complete in the next few weeks, provides further evidence that the outlet centre retail sector is becoming of greater interest to institutional real estate investors. The successful purchaser led a group of other leading institutions in the bidding process, alongside specialist funds, fund managers and established retail operators. I anticipate the new owners will see further significant growth in turnover in the long term, not least following completion of the next phase.'
