Madison International Realty secures additional stake in EUR15bn Signa Prime portfolio

Real estate private equity firm Madison International Realty has acquired with the Luxemburg based investment vehicle MIEPPI, a c2.2 per cent equity stake for another institutional investor in Signa Prime Selection AG (Signa Prime), a EUR15.0 billion European real estate company holding – among others –  27 trophy properties and development projects.  

The total portfolio spans over 2.4 million square meters and includes, premium office, luxury retail, hotel and residential assets. The terms of the investment are confidential.

This transaction follows the acquisition of a 5.0 per cent stake by MIELI II, also managed by Madison, in July last year. Signa Prime’s shareholder base includes top-tier investors such as the German sovereign wealth fund RAG Stiftung, R+V Insurance Group, the Peugeot Family and others. SIGNA Holding will remain the majority shareholder.
About 80 per cent of the portfolio is located in Germany, with 18 per cent in Austria and 2 per cent in Italy. The majority comprises fully stabilised core assets which afford excellent cash flow stability due to a c98 per cent occupancy level and a long average unexpired lease term of almost 20 years. The portfolio also offers attractive embedded upside potential, as many of the rent levels are below current market rates, and the portfolio includes several highly attractive development and redevelopment projects.
Iconic properties within the portfolio include KaDeWe and Upper West Tower in Berlin, Oberpollinger and Alte Akademie in Munich, the Alsterhaus and Alsterarkaden in Hamburg, the Postsparkasse from famous architect Otto Wagner, the Park Hyatt and the Golden Quarter in Vienna, and the Kaufhaus Tyrol in Innsbruck.  Among the assets in the recently acquired Kaufhof real estate portfolio are the Galeria Kaufhof Alexanderplatz Berlin, Zeil Frankfurt and Carsch Haus Duesseldorf. 
Matthias Cordier, Managing Director at Madison International Realty, says: “This transaction builds on our excellent working relationship with Signa Prime following our initial investment for MIELI II into the company last summer. By adding another stake in SIGNA Prime for MIEPPI, we have demonstrated our confidence in Signa’s attractive, prime portfolio and its skilled senior management team. “In all asset classes these are exceptional properties in the best locations that we are confident will deliver long term stable cash flows and offer great upside potential from rental reversion and as well as presenting a number of opportunities to create value through development and redevelopment.”