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French fund Klépierre Acquires Plenilunio For €375M

17 March 2015 – Cinco Días

The shopping centre in Madrid, which measures 70,000 square metres, is home to brands such as H&M, Primark and Media Markt.

The active market for the sale and purchase of shopping centres in Spain recorded another milestone yesterday. The French fund Klépierre announced the acquisition of the Plenilunio shopping centre in Madrid, from Orion Capital Managers for €375 million. The transaction had been in the pipeline for months and was expected to close during the first half of the year.

The Plenilunio shopping centre is located in Madrid and measures 70,000 square metres. It is home to brands such as Primark (where the Irish company has its largest store in Spain, although its flagship store on Gran Vía will take over that title when it opens later this year); Inditex, Mercadona, H&M, Mango and Media Markt.

The transaction announced yesterday is the second largest ever involving a shopping centre in Spain. The largest involved the sale of Puerto Venecia in Zaragoza. The investment fund Orion, which was also the vendor of Plenilunio, received €451 million from that sale. Through these two transactions, which have taken place within four months of each other, more than €820 million has changed hands in the sale and purchase of shopping centres. The third largest sale in Spain was also closed in 2014 involving the Marineda City shopping centre in La Coruña, which was sold for €260 million.

Plenilunio is the first large sale to be closed in 2015, after record figures were registered in the shopping centre real estate market in 2014 – total investment amounted to €2,500 million, according to data from the Spanish Shopping Centre Association (‘Asociación Española de Centros y Parques Comerciales’ or AECC). The organisation itself thinks repeating the volume recorded last year again this year will be challenging.

The sector’s trade association also highlighted the importance of contributions from overseas funds to ensuring that investment volumes in Spain are higher than their pre-crisis levels. The French firm that has acquired Pleniluno already has a presence in the country through the La Gavia and Príncipe Pío shopping centres in Madrid; Meridiano in Santa Cruz de Tenerife and Maremagnum in Barcelona.

Turnover of €21 million per year

The French investment group confirmed yesterday in a statement that it expects the Plenilunio shopping centre, which had an occupancy rate of 99.3% at the end of last year, to generate annual revenues of €21 million. Its turnover increased by 15% last year. The fund said it has “plans to differentiate” the property, which (it expects) will result in improved cash flows.

Klépierre reported that it had paid the €375 million consideration using its own funds. The group ended last year with liquidity of €2,700 million. Nevertheless, according to the statement, it does not rule out (the possibility of taking out) a mortgage loan (on the property). The company estimates that it has assets in Spain valued at €1,400 million. PwC advised Klépierre on the transaction and Cushman and Wakefield advised Orion.

The French group confirmed that Plenilunio is a “dominant shopping destination” in Madrid, with more than 10.5 million visitors per year and a catchment area of 1.5 million inhabitants. Its proximity to the centre of the city, its visibility from the main arteries (roads) into and out of the city and its good public transport links are the main attractive features for the company. It said that 14,000 homes are currently being built in the area, which in general has a purchasing power than is 30% higher than the Spanish average and where 33% of the population falls into the highest income bracket.

Original story: Cinco Días (by Diego Larrouy)

Translation: Carmel Drake

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