Prelios now ‘pure management company’ after investments hived off

28 September 2015 10:00

Prelios Immobilien Management GmbH

There could be few clearer signs of Prelios Deutschland’s renewed commitment to its future as a pure management company than its fresh new 1,600 sqm of environmentally state-of-the-art offices in Hamburg’s business district.

In a move almost symbolic of the company’s new role as a service provider, the Prelios offices in the previous location of Hamburg Blankenese are being re-let on behalf of the owner, Hesse Newman, with Prelios continuing to manage the property.

REFIRE met recently in the company’s new offices with Martin Mörl, managing director of Prelios Immobilien Management GmbH, to get a better feel for the company’s mission after a lengthy period of the company repositioning itself as an integrated services provider. We confessed that we had last closely followed the company under its old guise as Pirelli Real Estate, when the Italian group had made serious waves as an active investor in many sizeable deals in the heady days of 2006-2007, often as a co-investor with partners such as Morgan Stanley and RREEF.

Mörl described how the company had made the transition from those days as investor to its current role as a comprehensive provider of management services for commercial properties. The parent company in Italy is focused on growing the whole group as a service organisation in Italy, Germany and Poland, and recently won approval to fully separate its real estate investments from its service activities.

The Milan-based firm will then hold a majority stake in the newly created special purpose vehicle, named Centauro, along with fellow investors Intesa SanPaolo and Unicredit. The new entity will hold €226m of non-core assets.

Prelios now manages €5.1bn in properties for third parties, and this is clearly the future direction of the company in its three key markets. The investment holdings in the Highstreet Portfolio, which owns Karstadt department store properties, are part of the hived-off activities into the investing vehicle, but Prelios still has asset management mandates across many of the stores, separate to its role as active minority coinvestor in the funds which acquired the assets.

Mörl said the recent transition period for the German operations also involved the disposal of the group’s residential portfolio to listed BUWOG AG, the sale and subsequent management of the mixed-used property Hamburg Harburg-Carrée and the takeover of the centre management of two Karstadt department stores in Berlin. It has also won a range of new management and development contracts in Germany to consult and advise on projects for third parties investing in Germany. The company has conducted transactions with a volume of more than €3.1bn over the last five years, said Mörl.

We reported in a recent issue of REFIRE on a new retail development by Prelios in the downtown area of the northern German coastal town of Husum. The 12,000 sqm centre is being developed around a former Hertie store with local investment, and integrating traditional local retailers, such as the long-established C. J. Schmidt store in the town. Mörl said that Prelios is actively looking for similar-sized German towns that could profit from such creative solutions with fresh impetus and contemporary tenant mixes integrating established local players in a downtown retail development.

Prelios also manages other centres for regional investors in Hamburg Altona, Constance on the lake at the Swiss border, and Marburg in norther Hesse, along with a number of department stores in Berlin. Altogether it manages about 1 million sqm of space across shopping centres, department stores and mixed-use buildings in Germany. It recently introduced a new steakhouse concept over 750 sqm of indoor and outdoor space to the Blankenese Bahnhofsplatz project in the Hamburg suburb, which Mörl reports is attracting hungry lunchtime and dinner diners from well beyond its borders.

The company now has a full-service team operating out of its new Hamburg HQ advising clients on all aspects of asset management, including fund management, brokerage, valuation and credit servicing. It just recently signed a comprehensive property management contract with Tristan Capital Partners to manage the Karstadt Kaufhaus in Munich - at 93,000 sqm of lettable space, one of the biggest retail outlets in the city.