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BERLIN-DIG Real Estate & Hospitality has acquired its second suburban Berlin shopping center, paying AED 380 million (US $103 million) for the 55,000-sm (495,000 sf) regional Markisches Zentrum property. The new owner is the global financial investing arm of Dubai Holding. The seller was Hammerson plc of London, a major European property company with operations in the United Kingdom, France and Germany.

Merrill Lynch International financed the deal, "providing very good numbers for us," Duncan Macaulay, DIG's global head of real estate tells GlobeSt.com. "A strong cash flow [from the property] and the knowledge that no one else will probably build [another center] in the area" motivated DIG to do the deal, Macaulay says. "Yields are going down but we have confidence in the German economy that will make this acquisition successful."

DIG's strategy is "to create a German multi-tenant retail portfolio, focusing on assets that offer long-term revenue streams and value-add asset management opportunities," Macaulay says. "There are a lot of high rises and roof tops in the center's location" occupied by affluent shoppers, he tells GlobeSt.com.

MZ Centre was developed in the early 1970s and generates gross annual revenue of more than AED 34.9 million (US $9.5 million). The property was extended by 10,000 sm (90,000 sf) in 2002. The 120 tenants have a weighted average remaining lease term of over five years. The property is anchored by H&M and Woolworths. Other name tenants are McDonalds, Wohri, Citibank, Deutsche Bank, T-Punkt, Lidi and REWE.

"MZ Centre offers many opportunities to improve not only the businesses of existing retailers, but also the shopping experience of local residents," Macaulay says. "We look forward to actively managing the asset with new customer-driven initiatives."

DIG CEO Soud Ba'alawy says the acquisition "perfectly complements our existing retail investment, Hansecenter in Rostock, and adds significant momentum to our strategy of building up a presence in the multi-tenant retail market in Germany." He adds, "MZ Centre also provides crucial shopping and social facilities to the residents of Reinickendorf, which our planned improvement scheme will enhance further."

The London and Berlin offices of Colliers International advised DIG on the acquisition. Donaldson Deutschland will manage the center. DIG Real Estate & Hospitality manages a portfolio valued at over US $7 billion. The company is headquartered in the Emirate of Dubai with local offices stretching from New York through London to Kuala Lumpur.

Instant Insights /

Dubai Unit Pays $103M for Berlin Shopping Center

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