KarstadtQuelle Agrees to 163 Million Euro Sale Leaseback of Property Portfolio

Bloomberg - December 8, 2005

KarstadtQuelle AG, Germany's biggest department-store chain, may sell all of its real estate next year to eliminate debt of about 2.8 billion euros ($3.3 billion) that brought the company to the brink of collapse. The shares had their biggest gain in more than a year.

KarstadtQuelle hired Goldman Sachs Group Inc. to explore the sale and leaseback or spinoff of property such as department stores in city centers from Cologne to Berlin, Chief Executive Thomas Middelhoff told reporters today in Dusseldorf, Germany.

KarstadtQuelle, based in Essen, had property with a book value of 3.8 billion euros as of Dec. 31. The company has sold or transferred off the balance sheet department stores and 40 logistics properties to cut debt by 1 billion euros by the end of this year.

(Bloomberg reports that Slough Estates PLC has just agreed to buy a property portfolio and major development land bank from KarstadtQuelle AG in a sale and leaseback deal for 163.2 mln euro. The portfolio totals 260,000 square metres of let warehouse accommodation, 63,000 square metres of let office accommodation and 53 hectares of development land, producing a total rent income of 13.1 mln eur a year. KarstadtQuelle AG reportedly entered into long-term leases on the assets.) Sphere: Related Content