The Karstadt shopping centre on the Hermannplatz was erected in 1927–1929 in an expressionistic style after the plans of the German architect Philipp Schaefer. It was the largest and the most modern equipped shopping centre in Europe. During the Second World War, the lack of goods and supply led to the closure of most of the facilities in the shopping centre. Due to that, the upper floors were used by the Heeresbekleidungsamt (Army Clothing Office) of the Wehrmacht. In April 1945, the exceptional height of the building allowed for use as an observation point for the Volkssturm units and, supposedly, for mounting some Flak cannons on its top.

On 21 April, the Red Army took Hermannplatz under artillery fire, leaving many dead and wounded civilians lying on the square. Together with the Volkssturm, the area was defended by Waffen-SS volunteers from France, the Netherlands and Scandinavia, who knocked out at least 14 Soviet tanks, which had attacked the area. The Karstadt building was destroyed on 25 April 1945, and it remains uncertain if the building was blown up or torched by its SS defenders. The demolition occurred possibly to prevent the Red Army to capture food reserves, which were stored in the cellar. After days of fighting on surrounding streets, the units of the Soviet 40th Guard Tank Brigade captured the area on 27 April 1945.

Between 1950 and 1951, Karstadt was rebuilt on a smaller scale, but continued to expand constantly in the Hermannplatz area over the coming decades. The façade which consisted of different elements was unified during another renovation in 1998. A small part of the original façade still can be seen on the Hasenheide Street. In recent years, it has been widely discussed to restore the Karstadt to the original look of the 1930s.