Alternative investment manager The Carlyle Group has completed the acquisition of a 17,000 square metre department store, operated by German retailer Karstadt, in the city of Esslingen in southern Germany.
The property was sold by the Highstreet consortium (Highstreet A Portfolio GbR) and the Stuttgart-based Nanz Group. The transaction was carried out in joint venture with Frankfurt based developer PBG and retail experts 3W Immobilien.
Carlyle has made the investment on behalf of its CEREP III fund.
The investors plan to undertake a refurbishment of the existing building, working closely with Karstadt to minimise disruption, and also to expand the retail offer by 11,000 sqm and create new residential accommodation on the site, which is prominently located in Esslingen, on a prime pitch. The total investment in the site, including the acquisition and development costs, will be approximately EUR70m, with financing secured from Kreissparkasse Esslingen-Nürtingen. Karstadt Warenhaus is a long term tenant of the site, with 13 years remaining on its lease.
The letting agent for the new retail space is Colliers International in Stuttgart.
Alexander Strassburger at The Carlyle Group says: “This acquisition and new joint venture with two well-respected local partners represents an exciting opportunity to create value for our investors, as we work alongside the existing tenant and the city to maximise the potential of the site. I look forward to working with our partners to progress the refurbishment and creation of new living space, and bring in new retail brands to the city.”