Deutsche Bank’s property fund management arm RREEF and Italy’s Pirelli Real Estate have agreed one of the biggest ever European property deals.

The pair has been chosen as the preferred bidder by German retail and leisure group Arcandor and Goldman Sachs Whitehall Fund for a €4.5bn (£3.2bn) portfolio of German assets, Property Week has learnt.

Arcandor, formerly know as KarstadtQuelle, and Whitehall are selling a portfolio which includes 85 department stores and a stake in Arcandor believed to be of between 20%-30%.

The news comes a week after Arcandor chief executive Thomas Middlehoff stated that the company would present a buyer for the assets by the end of the month. RREEF and Pirelli are believed to have been chosen from a shortlist of five bidders.