Thailand’s Central Group has confirmed that it has entered into an agreement to acquire 100% of the iconic KaDeWe department store property in Germany.
The heritage building on Tauentzienstrasse, Berlin’s most famous shopping street, is being acquired from Signa Prime Selection AG, part of the insolvent Austrian company Signa Group.
The purchase price for the building was reported by the German business daily Handelsblatt to be roughly 1 billion euros (38.9 billion baht).
The acquisition is a private investment of Central Group under Harng Central Department Store Ltd. Neither SET-listed Central Retail Plc nor Central Pattana Plc is involved in the transaction, Central Group said in a statement.
KaDeWe is the top department store in Germany both in terms of turnover and size. With retail space of 60,000 square metres, it welcomes over 8 million visitors a year.
“The building itself bears great significance in terms of architecture and innovation and is truly a destination for international tourists,” the statement said.
Central Group in 2015 co-invested with Signa in the KaDeWe Group, which operates three luxury department stores in Germany: KaDeWe in Berlin, Alsterhaus in Hamburg and Oberpollinger in Munich. Central holds a 50.1% stake in the operating company but Signa remained the sole owner of all properties and the landlord to the joint venture.
The acquisition of the KaDeWe building means Central Group will become the new owner of the flagship building, and a landlord to the KaDeWe Group.
“We are pleased to add KaDeWe Berlin to Central Group’s historic flagship luxury store real estate portfolio,” said Tos Chirathivat, executive chairman and CEO of Central Group.
“The additional capital investment demonstrates our family’s commitment to the KaDeWe Group, our loyal customers, employees and business partners in Europe.”
AFP quoted Vittorio Radice, a board member of Central Group Europe, as saying the purchase was “the first important milestone for us in the attempt to restore and restructure the KaDeWe Group operating company towards a sustainable, financially viable business”.
Handelsblatt reported that the Thai conglomerate was in advanced talks to take over the entire group, including the Hamburg and Munich stores.
Signa, the property empire founded by the Austrian tycoon Rene Benko, has been one of the biggest casualties of Europe’s real estate crisis, with creditors filing claims worth billions of euros.
The group’s holding company, which sits at the centre of a web of hundreds of firms, has declared insolvency, as have its two most important units, Signa Prime and Signa Development.
German media reports last month said that Central Group wanted to take over more real estate assets from Signa, including Selfridges in London.
Central Group was reported to be in talks with Saudi Arabia’s Public Investment Fund about the iconic Selfridges store, according to a Business Insider report.
Central wants to lift its stake in Selfridges to 60% and take control of the operating business, the report said.
Central Group took over Selfridges last November after converting a loan to equity, giving it the majority stake in the joint-venture operating companies within the Selfridges Group.