In a major vote of confidence in the future of Berlin's high-end retail, the Norwegian sovereign wealth fund is paying €677m for a 50% stake in the landmark Sony Center on the capital city's Potsdamer Platz.
The property is currently owned by Canada's Oxford Properties Group, which will retain a 50% stake and also continue as the new property joint venture's asset manager. Madison International Realty, which held a minority 5.1% stake, is selling out to the new investor.
For the Norwegians, the world's biggest investor with €1.3 trillion of assets under management, this represents their biggest single investment in Berlin. The deal values the Sony Center at €1.35 billion, or about a quarter more than Oxford paid for the centre in 2017.
The Potsdamer Platz site was an abandoned no-man's-land from World War II until the fall of the Berlin Wall, with the Wall itself running right alongside. The site subsequently became the most high-profile and prestigious site in the city, with the Helmut Jahn-designed Sony Center consisting of eight buildings grouped around a central plaza, topped by a domed roof of steel, glass and translucent fabric.
It has become a modern landmark in Berlin, attracting about seven million visitors a year. Its biggest tenant is Deutsche Bahn, which has just signed a long-term extension on their lease as their national headquarters.
Oxford Properties had announced back in November 2022 that it planned a major €200m revamp of the centre, with its 113,000 sqm of office, retail, gastronomic and residential space. An extra 50,000 sqm of office space is part of the planning, expected to be completed by end-2023. the company is working with the original design team from JAHN Architecture and PWP Landscape Architecture on a new masterplan and stated that the redevelopment will “place greater focus on human-centric aspects of the Sony Center campus”.
“We are convinced of the central role the office will continue to play for all businesses but that it needs to offer more than ever before,” said Jay Drexler, vice president office, retail and life science Europe, of Oxford Properties. “We are responding with the introduction of better quality, more sustainable and flexible workspaces, coupled with new amenities including safe and secure bike parking to promote a healthy commute, fitness facilities and services dedicated to well-being.”
Oxford Properties is the real estate arm of Canadian pension funds OMERS (Ontario Municipal Employees Retirement System), the pension fund for local government workers in Canada’s largest province.