8 May 2017 – Iberian Property
Total investment in shopping centres in 2016 amounted to €3,500 million, an increase of 59.1% compared to 2015 and the highest on record, according to the Estudio de Mercado Centros Comerciales 2016/2017 published by Aguirre Newman.
During the first trimester of 2017, elevated investment activity continued, with more than €1,000 million invested in transactions involving shopping centres.
Thanks to this level of investment, in 2016, the shopping centre segment was the second most dynamic real estate market, after offices, for the second year running. As regards the kind of buyer, institutional investment funds were the most active, accounting for more than 52% of the total volume, as were the Socimis, with more than 38%. The remaining activity was undertaken by real estate companies and private investors.
In 2016, more than 35 investment transactions were closed, seven of which involved portfolios. The main transaction involving a single asset took place in Barcelona, with Deutsche Bank’s purchase of the shopping and entertainment centre Diagonal Mar, for just over €490 million. Also, the purchase of Metrovacesa by Merlin Properties had a very significant impact on the shopping centre figures, accounting for around 28% of the total transaction amount.
During 2016, there was a slight containment of initial yield rates “due to the positive macroeconomic environment and the perception of a potential return to an upswing in rents”, according to Aguirre Newman. In the case of “gold” shopping centres, transactions closed in a punctual manner, below 4%, a record low for yields in this market.
The report from Aguirre Newman also points out that new supply incorporated into the 2016 market covered a gross leasable area (GLA) of more than 273,000 m2. The main shopping centres inaugurated in 2016 were Parque Nevada (Granada) and FAN Mallorca Shopping (Palma de Mallorca). Of the 273,000 m2 of new space, 17% was the consequence of the expansion of existing shopping centres.
Original story: Iberian Property
Translation: Carmel Drake