Sistema and Corestate launch JV with €120m German high street spree

Russian private equity platform Sistema Capital Partners has formed a joint venture with Corestate Capital Group to acquire value-add assets in Germany.

The partnership launched with the purchase of four high street retail properties for a total outlay of more than €120 mln, on behalf of a Sistema-led group of investors. More than 60% of the investment is debt-funded.

The four properties, which were purchased from various vendors, are located on prime shopping streets in Greater Hamburg, Bremerhaven, Paderborn and Halle, with a total of 60,000 m2 of lettable space. Tenants include H&M, Saturn and Esprit, with a 94% occupancy rate.

Sistema Capital Partners (SCP) was launched at the end of last year by Sistema JSFC to acquire high-quality assets outside Germany’s Big Seven cities. In November it led a consortium to buy 21 retail properties in mid-size cities including Bremen, Essen and Düren, for a total investment of €125 mln.

Swiss-based Corestate Capital Group abandoned plans last year to launch a €150 mln IPO, citing unfavourable trading conditions on the London and Frankfurt stock exchanges.

Marjorie Brabet-Friel, CEO of SCP, said: ‘Our international investment programme is gaining momentum with almost €250 mln of high street assets acquired with co-investors in Germany.

‘We will be taking a similar approach in other major international real estate markets, where our investors are looking to deploy their capital.’

Sascha Wilhelm, Corestate’s CEO, added: ‘The four acquired high street assets typify the opportunities that the joint venture is targeting because they present plenty of angles to enhance their attractive yields through active asset management. We still see a lot of such opportunities in the German market and therefore plan to grow our portfolio significantly within the next two to three years.’