Cork firm buys Berlin centre for €105m

OverseasProperty:A major new shopping centre on Berlin's second busiest shopping street has been bought by a Cork-based company, writes Gretchen Friemann

CMC Capital, the Cork-based wealth management and property investment division of Crowley & McCarthy Chartered Accountants, has purchased a major shopping centre in Berlin for €105 million.

It is the second large-scale transaction by Irish investors in the German market to emerge within the past seven days.

Last week Quinlan Private announced the completion of a €270 million deal in Munich. The wealth management firm, fronted by former tax inspector Derek Quinlan, led a group of private investors in the purchase of the landmark Maximilianhoefe building.

Tenants of the complex, which is situated between the Bavarian State Opera and the Kempinksi Hotel Vier Jahreszeiten, include Bally, Chopard and Dolce & Gabbana.

CMC Capital's acquisition, the Schloss-Strassen Centre, is also a well-located property and informed sources claim its sale sparked a fierce bidding war among international and Irish investors.

The yield on the centre is 5.25 per cent based on an annual rent roll of around €5.5 million.

CMC Capital specialises in German property and usually targets yields of 6 per cent or higher in its investments. However, industry experts claim the surge in demand for prime German real estate is making it increasingly difficult to secure strong yields.

European blue chip retail properties have been a focus for Irish investors in recent years and the Schloss-Strassen Centre, which is due to open next month, lies at the start of one of Berlin's most famous shopping strips. Its main tenants are Zara, Toys R Us and a Rewe Supermarket.

Schloss-Strasse is Berlin's second busiest shopping thoroughfare and most international retail chains and department stores operate outlets on the street.

The Forum shopping centre, where H&M is one of the main tenants, is one of the biggest shopping centres in the area and is owned by UK property giant Hammerson.

However, some property sources argue an even larger complex planned for the street could soon dwarf the 16,600sq m (178,681sq ft) Schloss-Strassen Centre.

The Dutch real estate firm, Multi Developments, which is also behind the €445.2 million Victoria Square project in Belfast, is looking at constructing a massive retail complex on the street.

Although the development could take up to five years to build, industry sources claim such a large scale site is likely to become the retail focus for the area.

CMC Capital purchased the Schloss-Strassen Centre from AMB Generali, the management holding arm of a German insurance giant, and Tenkhoff Properties, a real estate company.

CMC Capital has acquired over €250 million worth of German property since 2004. Its investments include a Hamburg shopping centre valued at €65 million and a Bavarian retail centre worth €20 million.