Arminius buys retailer Metro AG headquarters in Düsseldorf

The Frankfurt-based private equity group Arminius has bought retail group Metro AG’s headquarters just east of Düsseldorf for German institutional investors. The seller of the campus property, which is situated in the urban district of Grafenberg is Triuva, now a part of Patrizia.

The price of the deal was not disclosed, but was thought to have been around €270m. Triuva bought the property in 2017 for about €200m in a sale-and-leaseback deal, with Metro agreeing to lease back the site under a new 15-year lease agreement. Metro has occupied the site since 2004, and is thought to have invested nearly €100m in its construction.

The six adjacent office buildings with a multi-storey car park have a compact, campus-based layout and are fully let to the listed Metro AG on a long-term basis. The lettable area of the office buildings, which although currently fully let to Metro feature very good third-party usability, amounts to 75,521 sqm. The car park has over 1,300 parking units, with good traffic connection to Düsseldorf’s city centre.

Christian Molter, co-founder of Arminius Group (along with Peter Jun), said “This transaction represents a further important step in implementing our strategy of focussing on investments in German commercial real estate with German institutional partners.”

Advisers JLL and Rheinwert Immobilienconsulting GmbH managed the sales process, while NAI apollo group carried out the market valuation; the technical due diligence was conducted by CBRE Preuss Valteq. Kucera Rechtsanwälte Steuerberater Partnerschaft provided legal and tax advice for the buyer.

Meanwhile, the German Cartel Office has now cleared the path for the new joint venture between Metro’s old subsidiary, department store chain Galeria Kaufhof and erstwhile rival Karstadt, owned by Austrian private group Signa.

Kaufhof, bought some years ago by Canada’s Hudson’s Bay Company (HBC), is merging with Karstadt, with the new joint venture owning 243 prime downtown European locations (mainly in Germany) employing 32,000 people and having a turnover of €5bn. Signa will own 50.01% in the new joint venture and HBC 49.99%.

The joint venture will be headed by Stephan Fanderl, the head of Signa Retail who is credited with having turning round the loss-making Karstadt since Signa acquired it in 2014.

The Canadian HBC said in a statement that it has received proceeds of €171 million (exclusive of transaction fees and related expenses), which will be used to permanently repay a portion of HBC’s term loan. It said it also expects to receive additional proceeds of €250 million following the sale of a 50% interest in 18 additional properties in Germany expected to close in January 2019.

The transactions value HBC’s German real estate assets at a total of €3.25 billion (C$4.88 billion) compared to the company’s total Galeria Kaufhof purchase price of €2.51 billion (C$3.77 billion) in 2015.

Richard Baker, CEO and chairman of HBC said, “This transaction, demonstrates the significant value of our German real estate portfolio, which exceeds the 2015 purchase price we paid by C$1.1 billion. The German real estate joint venture will continue to seek out opportunistic ways of unlocking value in the future.”