9th March 2016, London / Luxembourg – Sistema Capital Partners (SCP), the international real estate private equity platform established by Russia’s listed diversified holding company Sistema JSFC and CORESTATE Capital Group, a fully integrated real estate investment manager, have formed a joint venture targeting opportunities in Germany. The partners have secured four High Street retail properties in mid-sized cities on behalf of a Sistema-led club of investors for a total of more than €120 million. Debt will finance more than 60% of the investments.
Marjorie Brabet-Friel, SCP’s Chief Executive Officer, said: “Our international investment programme is gaining momentum with almost €250 million of High Street assets acquired with co-investors in Germany. Partnering with best-in-class investment and asset managers such as CORESTATE is how we source and actively manage the portfolio to generate attractive returns for Sistema and its co-investors. We will be taking a similar approach in other major international real estate markets, where our investors are looking to deploy their capital.”
SCP invests Sistema’s own capital in domestic and international real estate to seize opportunities swiftly and secure a pipeline of real estate investments. The partners introduce the purchases subsequently to other like-minded institutional and high net-worth investors from around the world through a club deal structure that provides them with hands-on control of the assets. CORESTATE is also co-investing in the German assets.
Sascha Wilhelm, Corestate’s CEO, said: “The strength and investment expertise of the Sistema Group is a perfect complement to the CORESTATE team’s investment and asset management skills and in-depth knowledge of the German market. The four acquired high street assets typify the opportunities that the joint venture is targeting because they present plenty of angles to enhance their attractive yields through active asset management. We still see a lot of such opportunities in the German market and therefore plan to grow our portfolio significantly within the next two to three years.”
The four properties acquired from various vendors are located on the pedestrianised prime shopping streets of Greater Hamburg, Bremerhaven, Paderborn and Halle. Tenants occupying the total of 60,000 m2 that is available in the buildings include H&M, Saturn, Esprit, Depot and the municipality of Bremerhaven, while 6% of the space is vacant.
The joint venture is assembling a substantial portfolio of high quality High Street properties on the principal shopping streets of mid-sized cities in Germany. Institutional investors are deterred from investing in these properties because of their small transaction size relative to equivalent assets with similar tenants in the Big Seven cities. The reduced liquidity for these properties results in a pricing gap that SCP aims to close by building a portfolio of scale.
About Sistema Capital Partners
Sistema Capital Partners is a dedicated private equity real estate platform owned by the Sistema Group, the largest publicly traded diversified holding company in Russia and the CIS with around $19 billion in total assets under management. For more information on Sistema Capital Partners, please see www.sistemacapitalpartners.com
About CORESTATE Capital Group
CORESTATE Capital Group is a fully integrated real estate investment manager based in Luxembourg, with offices in Frankfurt, Zug, Vienna, Madrid and Singapore, among others. Since its foundation in 2006 the company’s transaction volume amounts to EUR 5bn. CORESTATE guides its clients through the entire value creation process of a real estate investment, covering in particular the deal sourcing and the development of investment products, structuring and execution of transactions, real estate investment management services and the development and implementation of exit strategies. For more information on CORESTATE, please see www.corestate-capital.com
Steve Hays, Bellier Financial (for Sistema Capital Partners):
T. +31 20 419 0901
Dr. Tilman Pradt (for CORESTATE):
T: +49 30 814 646 045