A fund advised by real estate investment manager Meyer Bergman has sold the iconic Karstadt department store in Berlin’s Hermannplatz, the square where the fashionable Kreuzberg and Neukölln districts converge.
Marcus Meijer, Meyer Bergman’s Chief Executive Officer, said: “So much has changed for this property since we acquired it less than three years ago. Karstadt is performing much better now under new management, while there is substantial tenant and investor demand for prime assets in this rapidly changing part of Berlin. We have hit our business targets for the building much sooner than we anticipated, enabling us to crystallise excellent returns for our investors.”
Meyer Bergman European Retail Partners II (MBERP II) acquired the 55,500 sq.m. building, one of Germany’s largest city centre department stores, in late 2013. Aside from the store, the property includes a 680-vehicle car park and a block of apartments and offices. Karstadt is the sole tenant of the property, which it occupies on a long lease.
Karstadt opened its department store on Hermannplatz in 1929, although this building was almost completely destroyed during World War II. Constructed on the same site, the current department store opened in 1951. It was enlarged in 2000, when the façade was also refurbished. The property incorporates two entrances to the subway station.
On either side of Hermannplatz are the districts of Neukölln and Kreuzberg, which traditionally attracted a large immigrant population because of its stock of cheap housing and excellent public transport links to the rest of the city. The neighbourhoods are undergoing rapid gentrification from an influx of younger residents and as the City of Berlin has spearheaded a regeneration of the area.
The sale of Karstadt Hermannplatz is the fifth disposal to date by MBERP II, which raised a total of €750 million of equity at the final close in the third quarter of 2014. The fund’s 15 remaining assets include another Karstadt department store in the affluent Berlin suburb of Charlottenburg; the Bradford Broadway shopping centre in Northern England; Bond Street House on London’s premier shopping street and two substantial redevelopment projects in London’s Bayswater and Borough neighbourhoods, both of which obtained planning consent this year.
Advising on the sale of Karstadt Hermannplatz were JLL, Simmons & Simmons and PWC.