Sistema Capital Partners, the international real estate private equity platform launched in December 2015 by Sistema JSFC, has secured a portfolio of German high street retail properties on behalf of Sistema and co-investors in an acquisition worth €125m.
Marjorie Brabet-Friel, CEO of Sistema Capital Partners, said: “Sistema Capital Partners’ strategy is to secure a pipeline of proprietary deals that it then opens up to other like-minded institutional and high net worth investors, who have a hands-on approach in keeping control of their investments. The German acquisitions kick-start Sistema Capital Partners’ investment programme, which will target assets in the most liquid international real estate markets, beginning in Europe. In general we aim to exit our investments within a four-year time frame.”
The portfolio of 21 properties comprises 56,300m2 of space occupied by retail brands including C&A, H&M, Peek & Cloppenburg, REWE, Rossmann and Saturn. The average vacancy rate for the buildings is around 3%. The properties are located on principal shopping streets in the following mid-sized German cities: Bremen, Gotha, Cuxhaven, Flensburg, Celle, Schwerin, Merseburg, Flensburg, Mönchengladbach, Düren, Gelsenkirchen, Delmenhorst, Dinslaken, Minden, Oberhausen, Gießen, Essen, Gelsenkirchen, Gladbeck, Bad Homburg vor der Höhe and Hagen. Debt will finance more than 60% of the acquisition price.
Prime high street assets in the Big Seven cities of Germany command a premium compared with equivalent properties with the same tenants in other German cities. Institutional investors have generally overlooked individual high street properties outside the Big Seven cities because of their small size and the low liquidity that results. SCP is assembling a substantial high quality portfolio of assets in these mid-sized cities that through its scale will close the pricing gap. Additional transactions are scheduled for completion during the first quarter of 2016.
Sistema Capital Partners invests Sistema’s own capital in domestic and international real estate, while also acting on behalf of co-investors including institutional and high net-worth investors from around the world. The manager offers investors access to a proprietary pipeline of investments sourced through best-in-class local real estate operating partners. These are initially secured by Sistema’s own capital and then introduced to other investors through the club deal structure, allowing it to move fast and secure the best investment opportunities.
