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Berlin Landmark Changes Hands

Daimler Sells Potsdamer Platz to Swedish Bank

The German automaker confirmed Friday that it will sell its 19 buildings at Berlin's Potsdamer Platz to the Swedish banking group SEB. The sale reflects the failure of the original vision for Potsdamer Platz as the heart of a reunited Berlin.

A Swedish bank has bought a large portion of Potsdamer Platz, one of Berlin's most popular tourist attractions, in a deal which reflects the failure of the 1990s vision of the square as a futuristic center of commerce and camaraderie for a reunited German capital.

German automaker Daimler announced Friday that it had sold the 19 buildings it owned at Berlin's Potsdamer Platz to SEB Asset Management, the Frankfurt-based unit of Swedish banking group SEB. The sale is part of an attempt by Daimler to drum up cash as it refocuses on vehicle production in the wake of a difficult separation from its former subsidiary, Chrysler. Last spring, Daimler sold the struggling American auto company to a US private equity firm.

On Friday, Daimler officials sought to portray the sale as a positive development for the shopping and entertainment center. "We are delighted that with SEB Management we have found an investor with a long-term orientation that will continue to develop and enhance one of the most attractive sites in Europe," said Rüdiger Grube, who oversees corporate development and real estate at Daimler, to the Associated Press. But the sale also confirms signs of faltering confidence in the Potsdamer Platz project.

A century ago, the plaza was a hub for nightlife and shopping in Berlin, but it was destroyed during the air raids of World War II, and remained a desolate no-man's-land in the divided Berlin of the Cold War. In 1989, the company that was then Daimler-Benz made plans to redevelop the site as office space for some of its service-sector employees. When the Berlin Wall fell at the end of that year, the company found itself with dominion over a barren lot at the center of what would become the capital of a reunited country.

Daimler bought the land from the Berlin senate in 1990 and spent the next eight years investing €2 billion ($2.9 billion) in Europe's largest private urban development. The finished complex, which opened in 1998, encompasses nearly 5.3 million square feet of floor space, including theaters, a shopping mall, luxury apartments, and office space spread across 10 streets.

The price of the sale to SEB was not disclosed. The daily tabloid Bild reported Friday that the sale price was around €1.2 billion -- which would mean a major loss on Daimler's investment in the property.

The Daimler complex is bordered across Potsdamer Strasse by the Sony Center, an entertainment complex completed by the Japanese electronics company in 2000. Media reports have revealed that Sony is also looking to sell that property, a major tourist attraction designed by architect Helmut Jahn.

Daimler's sale to SEB is expected to be completed by March 2008. Shares of Daimler trading on markets in Frankfurt lost nearly 1.2 percent of their value after the official announcement on Friday.

pmm/ap/afp