Canadian investor Oxford Properties has teamed up on a 50-50 basis with Norges Bank Investment Management (NBIM) to own the iconic Sony Center in Berlin.
NBIM will pay €677 mln to acquire a 50% ownership interest in the Sony Center with Oxford selling 44.9% of its existing stake and Madison International Realty disposing its entire 5.1% interest.
Oxford will retain a 50% interest in the property and act as asset manager on behalf of the new joint venture. The closing of the transaction, which values the property at €1.35 bn, is subject to regulatory approval.
Comprising 113,000 m2 of prime office, retail and residential space in the heart of Berlin, the Sony Center stands as a modern landmark and attracts more than 7 million visitors annually.
In Q4 2021, Oxford announced a €200 mln master-planned redevelopment of the Sony Center to futureproof the campus with leading-edge design and sustainability features. The transformative vision for the site has been supported by strong leasing momentum. In April, restaurant, bar and lounge hotspot Frederick’s opened after the leasing of Sony Center’s flagship restaurant and events space to Rhubarb Hospitality. Anchor office occupier Deutsche Bahn has also signed a long-term renewal.
Abby Shapiro, senior vice president and head of office, retail and life sciences, Europe at Oxford Properties, commented: ‘Today’s announcement further expands our relationship with NBIM, a highly strategic and like-minded partner, which shares our long-term conviction in Berlin. Furthermore, it demonstrates the belief in our investment thesis that sustainable and wellness-focused office buildings in prime locations, serviced by superb food and retail amenities, will continue to outperform. Having realized significant value, we will reinvest back into Sony Centre to improve the customer experience. We continue to have a favourable long-term view in Germany and are actively looking to grow our business in the country, particularly in the German logistics market.’
As part of its planned growth in Germany, earlier this year Oxford acquired an 142,000 m2 urban logistics portfolio of 10 assets located across six German states.
Diana Shieh, co-head of portfolio and asset management, managing director for Madison International Realty, commented: ‘Sony Center is one of the most recognizable assets in Berlin, and Madison has experienced a transformation of the estate throughout its long-time partnership with Oxford Properties since 2017. Having executed our business plan, which included the creation of a masterplan for the future, we are pleased to crystallize our stake through this recapitalization and look forward to seeing this campus reach its full potential over the coming years.’
Oxford’s €200 mln redevelopment plan aims to place a greater focus on human-centric aspects of the campus including optimising workplaces for health and wellbeing, world-class retail and future-focused amenities. Major construction activity has begun, with the majority of the redevelopment expected to complete by the end of 2023.
In total, around 50,000 m2 of office space will be upgraded, becoming workplaces of the future. While the expanded food and beverage offering will feature Berlin providers as well as global restaurateurs.
