A unit of Brookfield Property Partners (NYSE:BPY) acquired the Potsdamer Platz portfolio in Berlin from Frankfurt’s Savills Investment Management (formerly SEB A), a member of the Savills Group (LSE:SVS), for $1.4 billion. The Canadian firm has partnered with an undisclosed Asian sovereign wealth fund to acquire the iconic 17-building Potsdamer portfolio.
The portfolio comprises around 267,000 sqm of rental space. The location at the heart of Berlin is one of Europe’s premiere urban quarters and has received multiple awards for its exceptional and ground-breaking architecture, Savills FM said. This includes the German Sustainable Building Council (DGNB) City District Certificate in Gold. More than 480 national and international companies have offices there, including Hubert Burda, TollCollect, Etihad Airways, ICBC – China’s largest bank – a Daimler representative office, Habitat, and law firms Freshfields, Raue LLP, Olswang and Morrison & Foerster LLP.
In addition to seven office and five residential buildings, the portfolio includes the Potsdamer Platz Arkaden shopping center, the Mandala Hotel, a variety of entertainment venues including the Cinemaxx cinema and the Stage Theater, a large number of restaurants and cafes, and more than 2,000 underground parking spaces.
“We have rapidly executed and successfully completed a highly complex transaction with the sale”, said Axel Kraus, managing director of Savills Fund Management GmbH.
Demand among international investors within Europe is at a high. Particularly in Berlin, the market is in a phase of high demand and low supply. “This extremely liquid environment showcases our strengths as an international investment platform – our presence on these markets enables our investors to systematically take advantage of both domestic and cross-border purchase and sale opportunities. Potsdamer Platz Quarter has seen extremely positive development over the years. The sale is a milestone in the continuing process of liquidating SEB ImmoInvest’s portfolio in the interests of investors”, said Kraus.
Savills Investment Management is an international real estate investment company with branch offices in London, Madrid, Milan, Munich, Düsseldorf, Frankfurt, Hamburg, Stockholm, Copenhagen, Luxembourg Paris, as well as in Hong Kong, Tokyo, and Singapore.
Ric Clark, chairman of Brookfield Property Partners, commented: “Potsdamer Platz is one of the world’s iconic properties, and we are pleased to be adding it to Brookfield’s growing portfolio of world-class assets.”
A prime asset at the geographical center of Berlin, Potsdamer Platz is the meeting point of the city’s five most bustling streets in a star-shaped intersection. Redeveloped by Daimler in the 1990s and designed by an international team of world-renowned architects including Renzo Piano, Richard Rogers and Hans Kollhoff, Potsdamer Platz sits among Berlin’s historic, creative, and government districts and attracts more than 100,000 visitors every day.
Potsdamer Platz is also a transport hub served by U-Bahn, S-Bahn, regional express trains and bus services and with a direct connection to the new Berlin Brandenburg International Airport in 2017.
James Tuckey, chairman of Brookfield Properties Europe, has relocated to Berlin where he is heading Brookfield’s Berlin office. He commented: “Berlin represents a fantastic opportunity for Brookfield. I look forward to working with our management teams to further our plans for Potsdamer Platz and harness the opportunity that we are seeing in the German market.”
Brookfield Property Partners is one of the world’s largest commercial real estate companies, with over $65 billion in total assets. We are leading owners, operators and investors in commercial property assets, with a diversified portfolio that includes over 130 premier office properties and over 150 best-in-class retail malls around the world. We also hold interests in multifamily, triple net lease, industrial and hospitality assets. Brookfield Property Partners is listed on the New York and Toronto stock exchanges.
Brookfield Property Partners is the flagship listed real estate company of Brookfield Asset Management, a leading global alternative asset manager with approximately $225 billion in assets under management.
Potsdamer Platz History
In the 1920s and 30s, Potsdamer Platz was the busiest and one of the liveliest squares in Europe. It was a major public transport hub and a popular entertainment district pulsating with life: the area contained numerous bars, cafes and cinemas.
This all came to an abrupt end in 1943 when Potsdamer Platz was reduced to ruins by allied bombing. After the Second World War, the square was located between the American, British and Russian sectors and became a no-man’s land. The area was completely flattened with the construction of the Berlin Wall in 1961 when the remaining buildings on the east side of the wall were pulled down.
In essence, after being ravaged by war, bombs and the demolition ball, the square was a no-man’s land between East and West Berlin for more than four decades.
After the fall of the Berlin Wall it was decided to rebuild the whole, almost fifty hectare (124 acre) large area. Construction started in 1994 and for many years Potsdamer Platz was the largest construction site in Europe. The square, together with several adjacent blocks were redeveloped by renowned architects from around the world following a masterplan created by the Munich-based architectural firm of Hilmer & Sattler.
The project included the construction of several office towers, a shopping arcade, an entertainment center and residential buildings as well as the necessary infrastructure such as streets and subway tunnels.
The first building completed was the Debis Tower, a high-rise designed by Renzo Piano. It is part of the Daimler-Chrysler-Areal, one of three complexes that were built around the square. It is home to office towers, a shopping arcade and an Imax theatre. Piano placed particular importance on the quality of the public spaces: streets, lanes and squares modelled on the traditional European city center with attractive pavement cafés and shops.
Another complex, bordering Tiergarten, is the more subdued Beisheim Center, which contains offices, hotels and residential buildings.
The third and most famous complex is the Sony Center, designed by Helmut Jahn, an American architect of German descent. It features a tent-like roof inspired by Japan’s mount Fuji. The unmistakable symbol of the Sony Center, which opened in 2001, is an enormous white marquee-shaped roof covering the plaza of the center which consists of six buildings. At night, this spectacular roof construction of steel, glass and fabric is lit up with a kaleidoscope of color designed to reflect the changing nuances between sunset and complete darkness.
The three complexes join together at Potsdamer Platz where three modern towers symbolize the rebirth of Potsdamer Platz. The wedge-shaped building on the left, the PwC building, was designed by Renzo Piano. The central brick tower is the Kollhoff-tower, named after its architect Hans Kollhoff. On the 24th and 25th floor of the tower is the Panoramapunkt, an observation deck with an open-air viewing platform. The third tower is the Bahn-Tower, a 26-story tower with a curved glass facade, designed by Helmut Jahn and built in 1998-2000.