17th December 2015, London – Sistema Capital Partners (SCP), the international real estate private equity platform launched this month by Sistema JSFC (LSE: SSA), a publicly-traded diversified holding company operating primarily in Russia and the CIS, has secured on behalf of Sistema and co-investors the acquisition of a portfolio of German high street retail properties for a total amount of up to €125 million.
Marjorie Brabet-Friel, CEO of Sistema Capital Partners, said: “Sistema Capital Partners’ strategy is to secure a pipeline of proprietary deals that it then opens up to other like-minded institutional and high net worth investors, who have a hands-on approach in keeping control of their investments. The German acquisitions kick-start Sistema Capital Partners’ investment programme, which will target assets in the most liquid international real estate markets, beginning in Europe. In general we aim to exit our investments within a four-year timeframe.”
SCP and a local operating partner advised co-investors in this Sistema-led investment club deal on the agreed purchase of 21 properties located on the principal shopping streets of mid-sized German cities. Debt will finance more than 60% of the acquisition price.
The portfolio comprises 56,300 sq.m. of space occupied by retail brands that include C&A, H&M, Peek & Cloppenburg, REWE, Rossmann and Saturn. The average vacancy rate for the buildings is about 3%. The properties are located in the following cities: Bremen, Gotha, Cuxhaven, Flensburg, Celle, Schwerin, Merseburg, Flensburg, Mönchengladbach, Düren, Gelsenkirchen, Delmenhorst, Dinslaken, Minden, Oberhausen, Gießen, Essen, Gelsenkirchen, Gladbeck, Bad Homburg vor der Höhe and Hagen.
Prime high street assets in the Big Seven cities of Germany command a premium compared with equivalent properties with the same tenants in other German cities. Institutional investors have generally overlooked individual high street properties outside the Big Seven cities because of their small size and the low liquidity that results. SCP is assembling a substantial high quality portfolio of assets in these mid-sized cities that through its scale will close the pricing gap. Additional transactions are scheduled for completion during the first quarter of 2016.
Sistema Capital Partners invests Sistema’s own capital in domestic and international real estate, while also acting on behalf of co-investors including institutional and high net-worth investors from around the world. The manager offers investors access to a proprietary pipeline of investments sourced through best-in-class local real estate operating partners. These are initially secured by Sistema’s own capital and then introduced to other investors through the club deal structure, allowing it to move fast and secure the best investment opportunities.
Steve Hays, Bellier Financial
T. +31 20 419 0901
Simon Packard, Bellier Financial
T. +44 20 7947 4076