Banco Popular seeks to buy a large commercial center in Vila Franca de Xira that closed four years ago

6 July 2017

The group offered €2.5 million at auction

Banco Popular is interested in buying a large part of Vilafranca Centro’s premises. A company, owned by the banking group, that operates in real estate asset management has submitted a €2.53 million proposal to buy 72 stores, a cinema and an Imax theater from the old shopping center, which closed on October 31, 2013. The proposal by PrimeStar was the only one presented at an auction of the assets of the insolvent Circuitos SA, a company belonging to the Obriverca Group which built the Vilafranca Centro in the 90s. The large shopping center, built in a former cinema-theater complex in the city, had been languishing since beginning of the century, and finally closed four years ago, when only about 40 of the 180 stores had been functioning.

Circuitos, which owned most of the stores, went into insolvency proceedings in 2016, as demanded by Banco Popular itself, the company’s largest creditor, which even has, a branch in an exterior section of the Vilafranca Centro. Novo Banco, the security company PSG and the Serviços Municipalizados de Agua e Saneamento da Vila Franca de Xira (municipal water and waste management company) are among the other main creditors.

Circuitos’ assets were put up for sale at auction after a decision at a meeting of the creditors in February. They include 112 stores, storage facilities, the cinemas and the IMAX theater. An overall base price of 2.926 million euros was set for the auction, but the announcement also permitted the individual sale of each of the 112 lots (stores, storage and cinemas).

When the auction was held on the 23rd, the Banco Popular group was the only one to formally make an offer, bidding 2.563 million euros for the stores and cinemas, without putting in a bid for the storage facilities. PÚBLICO discovered that the value of the proposal is close to the amounts foreseen for the individual sale of the stores and cinemas. It is now up to the insolvency administrator and creditors to decide whether to accept the proposal. In addition to the 112 stores and storage facilities that were auctioned, the Vilafranca Centro building also includes some 60 stores that still belong to the individual owners.

Various options

PÚBLICO has tried in recent days to obtain some clarification from Banco Popular about the institution’s intentions regarding Vilafranca Centro, but there has been no response. The mayor of Vila Franca de Xira met with representatives of Banco Popular a few weeks ago and believes that the institution intends to “monetize” the property. “We spoke about various options and Banco Popular expressed this interest,” said the mayor, Alberto Mesquita, in statements to PÚBLICO, stressing that “Banco Popular probably intends to attract investors with options to monetize the space.”

In the last few years various possibilities for the partial or total use of the Vilafranca Centro building have surfaced, from using the building for municipal services, to the use of part of the property for the Commercial Court planned for Vila Franca, but none of these prospects went forward. Alberto Mesquita knows that one of the possibilities is linked to the existing Pingo Doce supermarket in the center, which has very limited floor space and parking in the current facilities. “The center requires an anchor in the form of a major commercial space, and the matter of Pingo Doce was also addressed. What I understand from the meeting I had with them, is that Banco Popular is very interested in acquiring part of the independent stores and that there is the possibility of partnerships to take advantage of the building,” said the mayor.

A “mess” in the city center

Inaugurated in November 1994, Vilafranca Centro was a bold project designed by the Obriverca group for the Vila Franca de Xira city center. The extensive property, with five floors and underground parking continues to stand out in the center of the city. It includes two movie theaters and the first Imax movie theater in Portugal. But for several reasons – from the inauguration of new shopping centers in the outskirts of Lisbon to the rapid closure of the supermarket, and the limited size of most of the 180 stores – the large shopping center never took off and languished until its definitive closure in October 2013.

Since then it has continued to be a controversial issue in the city, with frequent criticisms of the abandoned and degraded “mess” in the center of Vila Franca, and some PSD (Social Democratic Party) mayors even called for its demolition if no solution were to appear. Several robberies have occurred in the complex and the city council, for reasons of public safety, had to pay to close off the old lateral entrances and to fence off the property.

Original Story: PÚBLICO – Jorge Talixa

Translation: Richard Turner