Thailand's Central buys German luxury retail property KaDeWe for €1bn

Thailand's Central buys German luxury retail property KaDeWe for €1bn
German luxury retail property KaDeWe, in Berlin

Europe sees another massive retail single asset transaction. 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.”

Handelsblatt reported that the Thai conglomerate was in advanced talks to take over the entire group, including the Hamburg and Munich stores.

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