HSH Real Estate AG has sold its Quer Passage retail and office property in Kiel, Germany, to Union Investment Real Estate AG's open-ended real estate fund UniImmo: Deutschland. The property features around 11,000 m² of retail space, some 4,600 m² of office space and storage as well as an underground car park with 193 spaces. Tenants include C&A (4,800 m²), discount grocery store Plus, pharmacy chain Ihr Platz, fashion retailer Mexx and local bank Sparkasse Kiel. The transaction is worth around €50 million.
Entrance of the Quer Passage.
The retail space itself is almost fully let and benefits from a direct link to the city's Sophienhof shopping center. A thoroughfare just outside the property that connects Kiel's main rail station with the city center's pedestrianized zone brings additional footfall. "The favourable location was one of the main drivers behind the decision to restructure the property. Refurbishment and a new concept have assured the site's commercial success, with interest from prospective buyers also confirming this," says Jürgen Kühl, a member of the Management Board of HSH Real Estate.
The location was also a crucial factor for Union Investment Real Estate in making the acquisition. "Along with the Sophienhof, the center enjoys a unique position within central Kiel. It is therefore a perfect fit with the portfolio of our Deutschland fund, as we wish to expand its exposure to shopping centers in prime retail locations," says Dr. Frank Billand, the Union Investment Real Estate AG board member responsible for shopping centers.
HSH Real Estate took over the previously insolvent shopping center in July 2005 and reopened it in October 2006. Over a 15-month period, HSH Real Estate carried out extensive restructuring with the aim of addressing the center's design weaknesses. This included merging smaller retail units to form larger ones and achieve a greater magnet effect. The entrance was also opened up to make it more welcoming and the mix of tenants optimised. In addition, the property was renamed Quer Passage and fully rebranded.
Kühl expects this kind of project to become more widespread in Germany. "We anticipate that developing existing inner-city shopping centres will considerably outstrip the number of new builds over the next two to three years."
Jones Lang LaSalle acted as consultants during the sale.
Source: Union Investment