US private equity firm Madison International Realty has replaced Morgan Stanley Real Estate Investing (MSREI) as co-owner of the four-asset Christie portfolio of German shopping centres.
Madison is entering as the joint venture partner alongside Hamburg-based asset manager Redos Real Estate. The seller was not identified, but PropertyEU research records that Redos acquired the portfolio in partnership with MSREI in 2014.
The Christie Portfolio consists of four retail centres that blend retail warehouse park and shopping centre features. The assets comprise a total 214,000 m2 and are the dominant retail destinations within the greater Berlin and Dresden areas in which they are located.
'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,' said Matthias Cordier, director of Madison in Frankfurt. 'Additionally, the properties are located in strong submarkets and each centre has the dominant competitive position in its local area,' he added.
Madison has lined up financial partners - including institutional investors - for the deal who are attracted to Germany’s positive demographic trends and real estate fundamentals, Cordier said.
The company's plans for the properties call for investment in refurbishments and logistical improvements, with a focus on the properties in Eiche, where construction is nearing completion, and Dallgow, near Berlin, as well as the centre 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 Oliver 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. 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 was advised on the transaction by law firm Freshfields Bruckhaus Deringer with Latham & Watkins acting for the seller.
