MGPA joins with Partners Group for €220m Copenhagen buy

MGPA leads investment club of Partners Group and an unnamed Canadian institutional investor in the purchase of an ‘iconic’ Copenhagen city centre department store.

MGPA, the Europe and Asia focused private equity real estate firm has teamed up with Zug-based Partners Group and an unnamed Canadian institution to buy a large retail property in Denmark.

The firm announced today it had led the €220 million purchase of the asset, which includes the ‘iconic’ Illum department store, from Magillum Properties, part of Solstra Group, a Danish retail group.

The acquisition was completed on behalf of its MGPA Europe Fund III, which was closed in 2007 on €841 million of commitments. MGPA and its partners financed the deal with senior debt from Sweden’s SEB bank.

The property, comprising 40,300 square metres of gross leasable space, is majority leased to Illum for another 15 years. In addition to the buying the existing asset, MGPA also intends to fund the development of further retail units.

Laurent Luccioni, chief executive of MGPA in Europe said: “[this acquisition] builds on our strategy to acquire key buildings in the most prominent retail locations and add value through redevelopment and leasing.”

“The asset provides excellent market opportunities for the creation of flagship stores and other retail units for both local and international retailers, capitalising on its prime location in Copenhagen. MGPA will also leverage on its experience developed on a similar prime asset in Paris, Les Trois Quartiers, on which we have been creating significant value over the last two years.”

Claude Angéloz, partner and co-head Partners Group’s private real estate division, said the investment was consistent with its strategy of focusing on high quality real estate in prime locations that benefit from strong economies and where upside could be created through active asset management.

“The retail investment we completed in the Copenhagen market last year has ensured we are already very familiar with the local market and its dynamics which has helped us to thoroughly underwrite this new investment and identify its attractive upside potential,” he said.