Hammerson has exchanged contracts for the sale of Forum Steglitz shopping centre in Berlin to Europa Capital Partners for €70m in a sale that will mark its exit from the German market.

The centre will be held in Europa's Fund III, a pan-European investment fund, and the deal reflects a net initial yield of 8%. Transaction costs are expected to be in the order of €1m.

Hammerson bought Forum Steglitz in Berlin’s Schloßstraße, in 2000, and carried out a refurbishment in 2006.

The centre was valued at €93.1m at 31 December 2008. Net rental income in 2008 was €3.8m. The sale will reduce administration costs by around €0.6m a year.

John Richards, chief executive at Hammerson, said: 'Forum Steglitz was Hammerson’s only remaining asset in Germany.

'The proceeds of the sale will be used to reduce group borrowings.'

Nic Fox, director of Europa Capital with responsibility for acquisitions in Middle Europe, which includes Germany and France, said: 'We have adopted a very cautious acquisition strategy since closing Europa Fund III with Forum Steglitz representing our first acquisition for the fund. Forum Steglitz is a well-known retail landmark, is occupied by robust retailers and contains significant further potential to enhance value over time.'

Europa Capital closed two new investment funds for European property investment in 2008: Europa Fund III and Europa Emerging Europe which invests in Eastern Europe. Together, these funds give Europa Capital €895m of additional equity to invest.

For more on this story read Property Week on Friday.