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CPPIB Buys 50% Of Puerto Venecia From Intu For €225.4M

3 June 2015 – Expansión

The Canadian fund has paid €225.4 million to the British real estate company Intu Properties for half of Puerto Venecia, the largest shopping centre in Spain.

Intu Properties and the Canadian Pension Plan Investment Board (CPPIB) have strengthened their partnership in Spain, through the creation of a joint venture to manage Puerto Venecia, the largest shopping centre in the country, located in Zaragoza, which has a constructed surface area of 200,000 m2.

According to a statement issued yesterday, CPPIB is going to pay €225.4 million to Intu for 50% of Puerto Venecia, although – “the operation is subject to certain conditions, including regulatory approval”.

The valuation of the shop and restaurant complex, located in Zaragoza, is the same as the one used by Intu in January when it purchased 100% of the property from the fund Orion Capital for €451 million. Then, the British real estate company announced that it was going to look for a partner, and several analysts identified CPPIB as a possible ally. PwC has advised the Canadian pension fund in its purchase.

Intu and CPPIB already share the ownership (50% each) of the Asturian shopping centre Parque Principado, which they acquired in 2013 for €162 million from CBRE and Sonae Sierra. Therefore, the Puerto Venecia operation “extends this alliance to include two of the ten largest shopping centres in Spain” said Intu Properties.

The British bank HSBC has financed the acquisitions of Puerto Venecia and Parque Principado with two mortgage loans amounting to €320 million in total.

Andrea Orlandi, CPPIB’s Director of RE Investments in Europe, sais that “the joint venture with Intu represents an opportunity to increase the fund’s presence in Spain’s commercial real estate market. Puerto Venecia complements our European portfolio”.

According to David Fischel, CEO at Intu, the revenues from this transaction will allow his company to develop other projects in Spain. The real estate firm has acquired a plot of land in Malaga for the construction of a shopping centre measuring 175,000 m2 and it is also evaluating options to develop other projects in Vigo, Valencia and Palma de Mallorca.

Intu intends to involve partners in these new projects as well, and may even create a holding company for its Spanish properties in the future, and list it on the stock exchange.

Intu’s share price fell by 2% during trading in London yesterday. Its market capitalisation amounts to GBP 4,380 million (€6,050 million).

Original story: Expansión (by Roberto Casado and Rocío Ruiz)

Translation: Carmel Drake