Austrian Signa scoops German trophy assets in year's biggest deal

Austria's Signa, which has been much in the news recently for its efforts to buy German department-store chain Kaufhof from Hudson's Bay for €3 billion, has bought five trophy assets from RFR in Germany's biggest real-estate transaction of 2017.

The portfolio is worth €1.5 billion euros and comprises properties in Berlin, Hamburg, Frankfurt and Munich, Germany's four largest cities, according to the privately-held and managed Signa.

The portfolio comprises five assets – the highrise 34-storey "Upper West" next to the Gedächtniskirche in Berlin, the high street assets "Kaufmannshaus" and "Alsterarkaden" in downtown Hamburg near the Alster, the development "Upper Zeil" in Frankfurt, along with as the 50% RFR-shareholding in the project "Karstadt" at Munich Main Train Station.

In total, the portfolio of high street assets comprises about 160,000 sqm of lettable area, spread over 70,000 sqm retail, 55,000 sqm office, 17.000 sqm Hotel, about 1,000 sqm of gastronomy, as well as 17.000 sqm of other areas. The assets all have long-term secured and creditworthy tenants as well as a diversified usage mix with additional value-add potential, said Signa.

The close to fully-let portfolio will, as is customary for SIGNA Prime, be held for the long-term, and will ensure the continued diversification of the portfolio in terms of rental income, usage mix and long-term leases.

Signa already owns the Karstadt chain, the biggest rival to Kaufhof. Hudson's Bay is reviewing Signa's offer for Kaufhof but has called it incomplete, non-binding and unsolicited.

According to Timo Herzberg of SIGNA Prime Selection AG, "The acquisition of this unique portfolio allows us to continue to build out the market position of SIGNA Prime as one of the leading European real estate companies, and to position itself as one of the largest European real estate companies."

The RFR Group is headed by German-born real estate investors Michael Fuchs and Aby Rosen, which manages a €12 bn portfolio of prominent real estate assets in the USA and Germany, including New York's Seagram Building and Lever House, and 700,000 sqm of German assets such as Westendgate at the Frankfurt Messe, Roomers Hotel and the Bienenkorbhaus also in Frankfurt, and several top properties on Berlin's Kurfürstendamm.