Information on the Target

Meyer Bergman European Retail Partners II (MBERP II) has successfully completed the sale of four prime retail properties located in central Copenhagen’s foremost shopping district for €62 million (DKK 460 million). These properties are strategically situated on Købmagergade, a well-known pedestrian shopping street renowned for housing numerous luxury retail brands. The four buildings collectively offer a total retail space of 3,200 square meters, and are fully occupied, showcasing a strong demand for real estate in this prime location.

MBERP II, established in 2012, has focused on assembling a compelling portfolio of high street retail properties in the heart of Copenhagen. Their investment strategy hinged on recognizing the area's substantial growth potential and its attractiveness to international retail brands. This successful transaction exemplifies their adeptness at navigating the urban real estate landscape.

Industry Overview in Denmark

The retail property market in Denmark has been witnessing robust growth, driven by increasing consumer spending and a rising influx of international brands seeking to establish a presence in the capital. Copenhagen, in particular, has emerged as a vibrant retail hub, characterized by a blend of traditional shopping experiences and modern retail formats. The city’s strategic location and appeal to both local and tourist shoppers contribute to its thriving retail environment.

As Denmark's economy continues to strengthen, the retail sector has benefitted from favorable consumption trends. Consumer confidence has improved, bolstering both domestic spending power and tourism, which is essential for retail growth. Additionally, the government’s support measures to enhance urban development and promote tourism have further cemented Copenhagen’s status as a premier shopping destination in Europe.

Despite the challenges presented by the evolution of e-commerce, physical retail spaces in key locations like Copenhagen have largely maintained their desirability. Increased foot traffic and the demand for experiential retail have encouraged landlords to enhance their properties, thus creating a more appealing shopping environment. This trend is particularly beneficial for prime locations such as Købmagergade.

The Rationale Behind the Deal

This sale aligns with Meyer Bergman’s long-term investment strategy, focusing on high-quality urban retail assets. The decision to sell these prime properties was likely influenced by favorable market conditions and a desire to capitalize on the heightened demand for retail spaces in premium locations, particularly in light of the sustained growth of Copenhagen as a shopping destination.

Furthermore, the sale reflects MBERP II's successful mission of realizing returns for its investors, having recognized and acted on the market potential since its initial acquisition phase. Transitioning these assets into a reliable fund such as Hines demonstrates confidence in the continuous growth and resilience of Copenhagen's retail sector.

Information About the Investor

The buyer, Hines Pan-European Core Fund, is a well-regarded investment vehicle specializing in core real estate assets across Europe. Hines focuses on high-quality properties with stable cash flows in prime locations. Their strategic investments are supported by a team of seasoned professionals with deep knowledge of the local markets, helping them identify and capitalize on opportunities that align with their investment strategy.

Hines’s acquisition of the properties in Købmagergade underscores their commitment to expanding their portfolio in prominent urban markets. Investing in prime retail assets in a city like Copenhagen not only strengthens Hines's position in Europe but also integrates well with their overarching strategy of focusing on high-demand locations with potential for long-term value appreciation.

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This deal appears to be a favorable investment for both parties involved. For Meyer Bergman, it marks a successful exit from their investment, allowing them to realize profits while capitalizing on the high demand for retail space in one of Europe’s leading shopping destinations. The successful strategy they employed, which identified the growth potential of Copenhagen from the outset, is commendable and indicative of sound investment principles.

For Hines Pan-European Core Fund, acquiring these fully occupied, prime retail properties at a time when the Danish retail market is experiencing growth represents a sound strategic move. Owning prime assets in a bustling shopping area is likely to ensure stable cash flows and potential for capital appreciation in the long term.

However, challenges remain, particularly with the ongoing adaptation of retail spaces to compete with e-commerce. Hines will need to be proactive in enhancing the retail experience to sustain tenant interest and consumer engagement. Overall, given the strengths of both the target properties and the investor's reputation, this deal could be viewed as a promising addition to Hines’s portfolio, aligning with their investment criteria.

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Hines Pan-European Core Fund

invested in

Four prime retail properties

in

in a Other Private Equity deal

Disclosed details

Transaction Size: $62M

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