Prelios eyes mall mandates in Italy

Italian listed property services firm Prelios is seeking to expand its shopping centre management activities for cross-border investors in Italy, Martin Mörl, CEO of Prelios Germany has told PropertyEU.

'Italy is becoming more attractive again to investors and we are well-placed to accompany German investors to the country. Prelios is much bigger in Italy than it is in Germany so we aim to use the opportunities there to expand our operations.'

Prelios currently has a sizeable shopping centre management unit in Germany, Mörl added. 'We’re not that large yet in Italy, but we see opportunities for German investors to acquire retail assets and combine this with our management and development capacity. This is a big part of our strategy.' Spain is currently ahead of Italy in terms of deal activity, but individual transaction volumes in Italy are significantly higher than in Spain and the purchase prices of the retail investment market are more attractive than in Germany, he added. 'Demand is so high in Germany, there are no cheap opportunities left. Italy is more attractive and yields are higher even if it is still difficult to make a move.'

Last year, Prelios announced that the Lago shopping centre it manages in Konstanz on behalf of German open-ended fund manager Union Investment topped the ranking for the second year running in the Shopping Centre Performance Report. The report, which is conducted by Ecostra in cooperation with German real estate publication Immobilien Zeitung provides an overview of 400 shopping centres in Germany based on a tenant survey about the performance of their stores in these centres. Mercado, another shopping centre that Prelios manages in Hamburg on behalf of Union Investment, won a top spot in a regional comparison.

Prelios has been engaged in a major restructuring of its activities since the outbreak of the global financial crisis. Its current strategy focuses on the provision of asset and property management services for third parties and the progressive disposal of its co-investment activities. As part of this strategy, the Milan-listed property firm is looking to exit all its co-investments in the next two years. In February, it announced the sale of a package of 18,000 apartments in northern Germany which owned via Solaia Real Estate, a joint venture an investment fund managed by Deutsche Asset & Wealth Management, to Austrian-based CEE investor Immofinanz. The price tag of the residential portfolio, which provides a total of 1.09 million m2 of lettable space with a vacancy rate of 2.3%, was put at €917 mln, reflecting a value per m2 of €819 and a gross yield of 7.6%.

In December last year, the Highstreet consortium, which includes Prelios, Goldman Sachs’ Whitehall funds, Deutsche Asset & Wealth Management, Generali and the Italian Borletti group, announced it has sold the Karstadt department store on Berlin's Hermannplatz to London-based investor Meyer Bergman. The Highstreet consortium with Hamburg-based Prelios as asset manager has now sold 26 assets valued at some €1.3 bn, Mörl said. ‘We now have 40 assets left worth some €1.4 bn. The restructuring is going according to plan.’