Montreal, Canada – Canadian-based Ivanhoe Cambridge has acquired a 94.8% interest in Paunsdorf Center, located in Leipzig and Germany’s largest shopping center, and a 92.5% interest in Zwickau Arcaden, located in Zwickau. The Company has also entered into an agreement to acquire a 92.5% interest in Wilmersdorfer Arcaden, a shopping center currently being developed in Berlin and slated to open late 2007. The Company’s investment totals approximately €450 million (CAD$629.5 million). Ivanhoe Cambridge also formed a strategic alliance with mfi Management für Immobilien AG (mfi AG) to manage and develop these centres. mfi AG is the previous manager and developer of Zwickau Arcaden and Wilmersdorfer Arcaden.
For both Ivanhoe Cambridge and mfi AG, the new alliance represents a logical step in each company’s business strategy of expanding their respective networks through partnerships and by opening up to new markets. The partners are also exploring other opportunities in Germany, where a thriving real estate market is increasingly attracting the attention of international investors.
“This partnership, along with other recent transactions in Europe, is in line with our strategy of diversifying our portfolio geographically by increasing our international investments. It also provides Ivanhoe Cambridge with a solid foundation to further build on its franchise in selected European markets to create further shareholder value,” said René Tremblay, President and Chief Executive Officer of Ivanhoe Cambridge. “We are pleased to join forces with mfi AG, a well-established and respected shopping center developer and manager in Germany. We are confident that their expertise and in-depth knowledge of the German market, and their proven track record in managing and developing retail properties will contribute significantly to value-creation for us.”
For mfi AG, this initiative with Ivanhoe Cambridge marks the beginning of the company’s international orientation. “We are proud to partner with Ivanhoe Cambridge, a leading Canadian real estate investor, owner and manager, and to have drawn foreign capital of almost one-half billion euros to Germany,” says R. Roger Weiss, President and CEO of mfi AG. “We are delighted to manage these high-quality properties and look forward to teaming up with retailers to further the centers’ positioning as destinations of choice for consumers and visitors in their respective markets.”
About the properties
Paunsdorf Center, located in the eastern part of the city of Leipzig, in the district of Paunsdorf, was opened in October 1994. With some 70,000 square metres (753,600 square feet) of selling space and a 17,500-square-metre (188,380-square-foot) furniture store, Paunsdorf Center is the largest shopping centre in Germany. The selection of more than 100 national franchises and regional retailers is complemented by a large home improvement center and 7,300 parking spaces. It is planned to reposition the center and further develop the location into the Paunsdorf Center Arcaden.
Zwickau Arcaden, located in the historic old town of Zwickau, the fourth largest city in Saxony, was opened in August 2000. The center was developed and leased by mfi AG, its current manager. More than 65 shops and businesses focus on fashion and short-term supplies. A successful shopping lane concept integrates two large retailers, C&A and H&M. Four hundred parking spaces complement the retail property. The catchment area includes 450,000 residents who generate a purchasing demand of approximately €1.6 billion per annum.
Wilmersdorfer Arcaden will be constructed at one of the central retail locations in Berlin-West, in the heart of the shopping road Wilmersdorfer Strasse. The development includes over 100 tenants from the retail trade, the restaurant business and health. Focal points include fashion, a hypermarket, a food discounter and specialized stores for consumer electronics and sports. The catchment area has a population of 320,600 residents with a purchasing volume of €1.8 billion. The opening of the Arcaden developed and to be managed by mfi AG is scheduled for autumn 2007.
About Ivanhoe Cambridge
Ivanhoe Cambridge is a recognized leader in the Canadian real estate industry. It is one of the country’s pre-eminent property owners, managers, developers and investors and focuses on high-quality shopping centres located in urban areas.
Headquartered in Montreal, Quebec, Ivanhoe Cambridge is active in Canada, the United States and Europe, where it recently completed several major transactions. In Germany, it owns a majority interest in Leipzig’s Paunsdorf Center and Zwickau’s Zwickau Arcaden, two existing shopping centres, and in Berlin’s Wilmersdorfer Arcaden, a centre currently being developed. In Scotland, it co-owns St. Enoch Centre in Glasgow. In Poland, it owns the Wola Park shopping centre through the Central European Retail Property Fund, of which it is the controlling shareholder. In Spain, the Company is currently working with a local partner to develop Islazul Centro Comercial, a 90,000-square-metre (970,000-square-foot) regional shopping centre located in suburban Madrid.
The Company’s real estate portfolio consists of 43 regional and super-regional shopping centres for a total of 3.5 million square metres (37 million square feet) of retail space. As at December 31, 2004, the market value of its assets stood at CAD$7.0 billion (€5 billion).
Ivanhoe Cambridge is a principal real estate subsidiary of the Caisse de dépôt et placement du Québec, the leading institutional fund manager in Canada. Amongst its shareholders, the Company also counts four prominent Canadian pension funds.
About mfi Management für Immobilien AG
mfi Management für Immobilien AG has made a name for itself as a developer of shopping arcades, as well as office and business parks throughout Germany. It offers all classic business areas of a developer who is permanently involved in a property: project development, general planning, realization, letting and center management. Since it was founded in 1987, mfi has realized approximately 1.5 million square metres of retail and commercial space. An additional 450,000 square metres is in the construction and planning stage. The project volume of properties handled and managed by mfi totals approximately €3.1 billion.