Pirelli, RREEF consortium complete €4.5bn German Arcandor deal

Completion of the deal with an enterprise value of €4.5bn comes four months after Italy’s Pirelli Real Estate and RREEF said they were among a quartet of investors buying a 49 percent stake in German department store joint venture.

Pirelli Real Estate, RREEF, the alternative asset management arm of Deutsche Bank, Generali and the Borletti Group have completed their agreement to buy a 49 percent stake in a portfolio of 164 German department stores.

Completion takes place four months after the parties signed a binding agreement with Karstadt Quelle, part of the Arcandor Group, for the purchase of its 49 percent stake in Highstreet RBG. The agreement was subject to approval of the antitrust and regulatory authorities, as well as obtaining consent from existing lenders in connection with the change of control of the borrowers.

The Highstreet portfolio comprises 164 properties located throughout Germany, providing a total gross area of 3.2 million square feet. The package is made up of 81 department stores, nine sporting goods stores, 28 parking lots, 14 office buildings and 32 other facilities for mixed use, retail points of sales, logistics and land.

The purchasers have not disclosed how much they paid, however they said in a statement that the enterprise value of the deal is around €4.56 billion ($7 billion) with underlying debt of €3.5 billion secured by the properties. Arcandor said in a separate statement that the value of the transaction was €800 million.

The consortium also signed a partnership agreement with Whitehall funds, a property fund of Goldman Sachs, which holds a 51 percent stake in Highstreet, for the joint management of the investment company. Pirelli RE will act as co-asset manager of the portfolio, along with Whitehall.