Landmark Wiesbaden shopping centre bought by Orion

The Lilien-Carré in Wiesbaden has become a landmark building since its construction in 2007, both for its elegant and distinctive architecture as well as its central location right next to the main train station and terminus for thousands of commuters travelling to their daily work in nearby Mainz or Frankfurt am Main. The centre itself has been in insolvency since the end of 2010, and previous attempts to find a buyer had failed.

Now, the London-based Orion Capital Managers have stepped in and bought the centre, allocating it to its Orion IV European 22 and Orion IV European 23 funds, both part of its Orion European Real Estate Fund IV. The price paid, while not named, is thought to be around €100m.

The Lilien-Carré has 36,000 sqm of lettable space, of which 25,000 is retail, with leading tenants being grocer REWE, Toys’R’Us, electronics retailer Saturn, and drugstore Rossmann. The centre also includes a 186-room Motel One hotel and a 3,000 sqm office building.

While the centre has been in insolvency, the Berlin-headquartered Acrest Property Group has been acting as asset manager for the centre. Acrest has been developing a complete new concept for repositioning the underperforming centre, including enlarging the size of the stores for some of the larger tenants, and integrating a food court on the upper level.

According to insolvency administrator Hans-Wilhelm Goetsch, “Acrest was developing the new revitalised and re-positioned concept in very close collaboration with the main lenders and our own insolvency administration, and as all of this was about to put into action, it was exactly the right time to entrust the ownership of the centre to a future-focused investor. This is the successful culmination of a streamlined sales process over the last few months.”

According to Karsten Nemecek, responsible for corporate finance and valuations at Savills in Germany, who advised the insolvency administrators on the structured sales process, “The new holistic and tailor-made repositioning concept for the centre is all about converting it to a hybrid, family-friendly centre to completely exploit the potential of the centre. The centre is combining the strengths of a shopping centre with the advantages of a retail park, in a manner which has been completely supported by the centre’s key tenants since Acrest began its implementation. The re-positioning will be completed in 2016.”

Orion has wide experience in shopping centre investment and project development, with various of its funds owning 13 shopping centres across Europe, with more than 1m sqm of lettable space under management. According to Orion founding partner Van Stults, “Our business plan is based fully on the plans developed by Acrest and the new lease agreements signed with our key tenants.”

The original centre manager in 2007 was Multi Mall Management Germany GmbH, with Irish investor Donal O’Mahoney as principal owner. The owners then filed for insolvency in December 2010. A proposed sale to an American investor fell through in 2011, with Acrest then taking over as centre operator in July 2012.