Madison secures investor stake in €15b German portfolio

Real estate private equity firm Madison International Realty has acquired a 2.2% equity stake for an institutional investor in Signa Prime Selection, a €15 bn European real estate company with a focus on German assets.

Financial terms were not disclosed.

The stake was secured for Luxembourg-based investment vehicle Mieppi, and follows Madison's 5% investment on behalf of another vehicle, Mieli II, last year.

Signa Prime's 2.4 million m2 portfolio of premium office, luxury retail, hotel and residential assets is about 80% located in Germany, with 18% in Austria and 2% in Italy. The average unexpired lease term is almost 20 years and the assets are 98% occupied.

Key properties include KaDeWe and Upper West Tower in Berlin, Oberpollinger and Alte Akademie in Munich, the Alsterhaus and Alsterarkaden in Hamburg, the Park Hyatt and the Golden Quarter in Vienna, and Kaufhaus Tyrol in Innsbruck. Among the assets in the recently acquired Kaufhof real estate portfolio are the Galeria Kaufhof Alexanderplatz Berlin, Zeil Frankfurt and Carsch Haus Duesseldorf.

Signa Prime’s shareholder base includes German sovereign wealth fund RAG Stiftung, R+V Insurance Group, the Peugeot Family and others. Signa Holding will remain the majority shareholder.

Matthias Cordier, Madison managing director said: 'This transaction builds on our excellent working relationship with Signa Prime following our initial investment for Mieli II into the company last summer.

'By adding another stake in SIGNA Prime for Mieppi, we have demonstrated our confidence in Signa’s attractive, prime portfolio and its skilled senior management team.

'In all asset classes these are exceptional properties in the best locations that we are confident will deliver long term stable cash flows and offer great upside potential from rental reversion and as well as presenting a number of opportunities to create value through development and redevelopment.'

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