Madison International Realty has acquired with the Luxemburg based investment vehicle MIELI II Sarl, a 5.0% equity stake in Signa Prime, a €12.5bn European real estate portfolio comprising 27 trophy properties and development projects, as well as the 60 asset Kaufhof real estate portfolio, from majority owner Signa Holding. The portfolio spans 2.4 million m² and includes luxury retail, department stores, office, hotel and residential assets. The terms of the investment are confidential.
About 80% of the portfolio is located in Germany, with 18% in Austria and 2% in Italy. The majority comprises fully stabilized core assets which afford excellent cash flow stability due to a c. 100% occupancy level and a long average unexpired lease term of 18 years. The portfolio also offers attractive embedded upside potential, as many of the rent levels are below current market rates, and several highly attractive development and redevelopment projects.
Iconic properties within the portfolio include KaDeWe Berlin, Oberpollinger and Alte Akademie in Munich, Upper West Tower Berlin, the Alsterhaus Hamburg, the Park Hyatt and Golden Quarter in Vienna, Kaufhaus Tyrol Innsbruck and the Elbtower in Hamburg. Among the 60 assets in the Kaufhof real estate portfolio are the Galeria Kaufhof Alexanderplatz Berlin, Zeil Frankfurt and Carsch Haus Dusseldorf.
Matthias Cordier, Managing Director at Madison International Realty commented: “This transaction fits extremely well with Madison’s strategy, allowing us to take an investment in one of the most significant and attractive portfolios in Europe. Furthermore, Signa Prime not only comprises a number of extremely high-quality properties which offer long term stable cash flows in our core European markets, but it also provides great upside potential from rental reversion and a number of opportunities to create value through development and redevelopment.”
“Our investment also allows Signa to continue to diversify its investor base. We are impressed with the quality of Signa’s management team and continue to believe in Germany as a core Madison target market,” added Derek Jacobson, Madison International Realty co-Chief Investment Officer.