GE Real Estate Germany made its initial foray into German retail, acquiring for €30 million (U.S.$40 million) 15 Domicil Moebel GmbH upscale furniture


stores outside of primarily western German cities, including Cologne, Hamburg and Stuttgart, from the former founder of Domicil in an off-market transaction.

The standalone stores measure 34,000 square meters and are leased to Domicil, which was recently acquired by HTL International, a Singapore-based luxury furniture manufacturer, for less than five years.

“We acquired all of the real estate assets of the HTL/Domicil in Germany,” Rainer Thaler (pictured), managing director of GE Real Estate Germany, told CPN. “We have a prominent tenant with a specific niche market, furniture of higher quality than, say, Ikea. Domicil targets customers who already know them. Eighty percent of their customers are coming back for the second or third time. They are not price-conscious customers.”

Thaler noted that GE wants to develop a strategic partnership with HTL, helping them to expand the Domicil brand in Germany. “With the leases less than five years, we want to sit down with HTL and see how long they want the assets, find the best solution,” he said. “We also have other options with the buildings in the future: convert them into offices, or lease to other retailers.”

GE acquired the 15 buildings at a yield north of 7 percent. “For an off-market transaction, we’re happy to sign on to that attractive yield,” Thaler said. “For comparison in Germany, a retail park with a good lease structure yields below 6 percent.”

GE currently is working on a major deal in Germany, beyond €1 billion, according to Thaler.