Further €100m-plus retail investment by Sistema/Corestate JV

The listed Luxembourg-based Corestate Capital had also made sizeable further investments before announcing its takeover of fund manager Hannover Leasing in the week before Christmas. It also said it had established its own facility management business in a joint venture with facility manager Lattemann & Geiger.

Together with its Russian partner for retail investment Sistema Capital Partners (SCP), Corestate is buying for its jointly-held private equity platform two further assets on the German Baltic coast for €105m. The sellers were UBS Real Estate and an international fund managed by Alpha Real Capital advised by CBRE. Corestate is co-managing the German assets acquired by the platform, which was set up in 2015.

The properties were acquired from different vendors and are located in the cities of Flensburg and Lübeck. The investments will be 70% debt-financed and lift the joint venture's total volume of retail real estate deals in Germany on behalf of a Sistema-led club of investors to €350m. Combined, the two assets provide a gross lettable area of 37,000 sqm, with tenants including Saturn, TK Maxx, McFit, and Holmes Place.

SCP was established by Russia's listed diversified holding company Sistema JSFC in 2015 to invest Sistema's own capital alongside other institutional and high net worth investors from around the world through a club deal structure that allows hands-on control of the assets.

According to Sistema Capital's CEO Marjorie Brabet-Friel, "SCP and Corestate were early in spotting the opportunities offered by high street retail in mid-sized German cities and the latest investments are larger and more prime in character than those previously transacted by our joint venture."

Sascha Wilhelm, chief executive at Corestate, said: “Retail in mid-sized German cities often serves a large catchment area as a magnet for an entire region, and properties in pedestrian zones in these centres are particularly attractive investments.”

Separately, Corestate set up its own facility management company CLG Facility Management as a joint venture between Capera, its property management company and facility service company Lattemann & Geiger (L&G). The new JV will handle retail, office and residential properties, with L&G bringing its technical and infrastructural expertise to the jointly-managed assets.