Pirelli RE confirms interest in Arcandor's EUR 4.5 bn portfolio

Pirelli Real Estate's CEO Carlo Puri Negri has confirmed that the Italian real estate giant is interested in acquiring Arcandor's department store properties in Germany. 'We are in talks for the purchase of Karstadt's buildings and for a small stake in the management company,' Puri Negri said Monday during a conference organized by Asso Immobiliare, the Italian real estate industry association. He added that the talks are expected to take four to five months.

Pirelli's interest in Arcandor was reported by PropertyEU during the Expo Real property fair in Munich last month. Valued at EUR 4.5 bn, the properties would be bought through a 49/51 joint venture with Deutsche Bank's property unit RREEF. Another three bidders are reportedly in the running to acquire the 85 department stores and other assets.

Arcandor, KarstadtQuelle's holding group, said earlier that it expects proceeds from the sale to amount to at least EUR 800 mln. The deal is expected to go through by the end of the year.

Essen-based retailer KarstadtQuelle transferred most of its real estate to a new company it set up with Goldman Sachs's Whitehall funds in March 2006. The US investment company Goldman Sachs paid about EUR 3.7 bn to get a 51% stake in the new company, which in July took the name of Arcandor.

Last year, Pirelli RE and Deutsche Bank's property unit RREEF joined forces to acquire Baubecon's residential portfolio in Germany for about EUR 1.7 bn. Pirelli RE announced earlier this year that it planned to increase its exposure to the German market. The Italian company has spent some EUR 3 bn in Germany over the last 12 months.