Madison bags German shopping center portfolio

The New York-based real estate private equity firm has purchased the Christie Portfolio, which offers 2 million square feet of prime German retail space in major cities such as Berlin (pictured) and Dresden. 

Madison International Realty has acquired a shopping center portfolio consisting of four properties in key German markets in a joint venture with Hamburg-based asset manager redos real estate.

The New York-based real estate private equity firm did not disclose the price of the deal, although it did reveal the portfolio offers 2 million square feet of retail space.

The assets are located in Eiche, Dallgow, both in greater Berlin, and Dresden and are all the dominant retail destinations within the respective areas they serve.

The portfolio is currently 90 percent leased, with the majority of tenants on long-term leases. Occupying approximately 603,000 square feet, Kaufland serves as anchor tenant at all four of the properties, while additional anchor tenants include C&A, H&M, Decathlon, TK Maxx, Mueller Drogerie, and Media Markt.

Madison and redos said they intended to work with Muenster, Germany-based project developer HLG to add value to the properties through refurbishments and logistical improvements.

“This portfolio fits Madison’s strategy of buying established prime assets with good in-place cash flow as well as embedded value enhancement opportunities that will be driven by investments in targeted, on-site initiatives that optimize the tenancy in existing high-volume centers,” said Matthias Cordier, director of Madison in Frankfurt.

“Madison has assembled financial partners that include some of the world’s preeminent institutional investors who are attracted to Germany’s positive demographic trends and real estate fundamentals, the portfolio’s strong tenant quality, and remaining value-add opportunities,” Cordier said.

The transaction was Madison’s first deal in Europe since July, when it sold the NOK3.9 billion ($463 million; €419 million) headquarters of Norwegian oil and gas multinational Statoil to a club of local investors. The 721,000 square foot complex, which was completed in 2012, is now one of the most recognizable building in Norwegian real estate.

The legal advisors on the Christie Portfolio transaction were Freshfields Bruckhaus Deringer for Madison and Latham & Watkins for the seller.