Korea's National Pension Service (NPS) is selling the Sony Center in Berlin for more than €1 bn, writes Mike Phillips, editor of EuroProperty.
NPS and its joint venture partner Hines have appointed Eastdil Secured and BNP Paribas Real Estate to find a buyer for the eight-building, mixed-use estate which makes up a large chunk of the famous Potsdamer Platz scheme in the German capital. The deal will see NPS crystallise a massive profit on an acquisition made at the depths of the downturn.
The asset is likely to attract significant international interest from blue-chip investors, and will highlight how Germany is the top investment destination in Europe at the moment, and Berlin the most sought-after city in Germany.
Advised by Hines, NPS bought the scheme in May 2010 from a joint venture between Corpus Sireo, the John Buck company and a fund managed by Morgan Stanley, for €575 mln. Consequently NPS will realise a €400 mln profit if the asset sells for the asking price.
Sony Center totals 111,483 m2, comprising offices, retail, residential and entertainment space. More than two thirds of the scheme is office space, and companies including Deutsche Bahn, Sony and Sanofi have their German headquarters there.
The sale will mean that more than €2 bn of assets on Potsdamer Platz will have changed hands in around two years. In 2015, a joint venture between Brookfield Property Partners and the Korean Investment Corporation bought a campus of assets on the square from Savills Investment Management for around €1.3 bn.
Brookfield will almost certainly bid on the assets in order to be able to take further control of the area. Other parties who have looked at the area include Oxford Properties, GIC, CIC, Norges Bank and Fosun.
The redevelopment of Potsdamer Platz became one of the iconic developments of a reunified Berlin. During the years in which the Berlin Wall was in place it lay in the no man's land between east and west Berlin. But due to the difficulty in attracting office tenants and retailers to Berlin in the aftermath of reunification, the companies that redeveloped the square, such as Daimler, made huge losses on their projects.
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