Upper West Luxury Property in Berlin: Sale, Value, and Return on Investment

2024-04-18 03:00:00

The Upper West, which belonged to the US real estate investor RFR Holding, was sold to Signa Prime in November 2017. It was one of five luxury properties that Signa bought for a total of 1.5 billion euros. Now the Upper West is for sale again. The brokers Jones Lang LaSall (ALL) and the real estate subsidiary of the bank BNP Paribas were commissioned with the marketing.

Four percent return

“The Upper West is a great prime mixed-use property. It was valued at the end of 2022 at a range of around 660 to 700 million euros and it is now expected that the sale will bring in around 450 million euros,” a Signa insider tells KURIER. The latter assessment would mean a rental return of four percent with total rental income of almost 18 million euros. The Upper West is being sold now because leading lenders generally want to have a stable owner. Or to put it another way: The Upper West project company should be stabilized and thus protected from possible insolvency. According to Creditreform, the property is indebted to around 300 million euros. According to a German real estate newspaper, an insurance company is said to have granted a loan of this amount and this is likely to be secured by the property.

18 million euros rent

According to Creditreform, Upper West Immobilien GmbH & Co. KG achieved sales of 18.93 million euros in the 2021 financial year – new balance sheets are not available in the German commercial register – and posted an annual profit of almost 268,000 euros. The assets are valued at 301.88 million euros, of which 181.85 million euros relate to land and buildings and 103.38 million euros to receivables from affiliated companies.

It wouldn’t be Benko’s Signa if the Upper West wasn’t also parked in an elaborate corporate structure. The property is owned by Upper West Immobilien GmbH & Co. KG, but there are also seven Luxembourg companies as well as Upper West Beteiligungs Holding in Vienna, which belongs to Signa Prime Selection. Some of these Luxembourg companies may have served to finance real estate.

Due to this tax structure regarding companies in Luxembourg, the buyer saves both real estate transfer tax and trade tax in Germany in a share deal (sale of company shares). Less any liens, the proceeds from the sale will go to Signa Prime’s creditors.

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