// New Selfridges owner raises capital for luxury retail real estate amid investment pledge
// Concerns raised over reliance on real estate valuations amid German and Austrian market dip
Selfridges’ new owner Signa Prime Selection has raised £630 million in fresh equity as billionaire Rene Benko and his co-investors back European luxury real estate.
Signa Prime, which recently acquired the Selfridges flagship department store in London and owns KaDeWe in Berlin, raised its capital by 12%, according to a statement prepared for investors and shared with Bloomberg.
The shares were subscribed by existing shareholders with Kuehne Holding, the investment vehicle of German logistics scion Klaus-Michael Kuehne, raising its stake to 10% from 7.5%.
Benko controls Signa Prime, the luxury real estate arm of Signa Holding Group, with smaller stakes held by an insurer and the investment trusts among some of Europe’s wealthiest families.
The capital increase follows a similar move earlier this year at Signa Development Selection, which focuses on non-luxury real-estate projects.
READ MORE: Selfridges MD Pitcher to stand down as it pledges omnichannel future
However, Bloomberg reports that Benko’s property empire has come under scrutiny for its rapid expansion and its focus on property gains in order to book profits. In 2021, Signa Prime’s net income rose to €682 million, driven by a positive impact of more than €1 billion on property revaluations, according to an annual report.
That situation has not deterred investors, which include Madison International and the Peugeot family, from further investing into his holdings.
And Signa and partner Capital have pledged to invest in Selfridges, as the department store continues to innovate.
However, concerns that a recession could hit the real estate market in Germany and Austria, where the majority of Benko’s properties are based, have pushed prices of a rare publicly-traded bond issued by Signa Development into distressed territory, according to Bloomberg data.
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