21 September 2017 – Levante EMV
El Corte Inglés has put the building located on Colón, 1 (in Valencia) up for sale for €90 million, according to sources close to the operation. The building, which used to house a Marks & Spencers store, is currently home to a Sfera shop and youth clothing departments. The company has put three floors and the basement up for sale. The upper floors are offices and do not form part of the operation.
The objective of the company is for an investor to buy the building and then lease back the space. This type of operation is known in the real estate sector as a sale and leaseback arrangement and in recent years, banks such as Santander have adopted the same formula. Some interested parties have already visited the property.
The sale of Colón, 1 forms part of El Corte Inglés’ divestment process, which it initiated a few months ago. The same sources cited above highlight that it is the only property that the department store has put up for sale in the Community of Valencia. The company did also consider the option of putting the building at Colón, 25 up for sale, but ruled that out in the end because the land rights belong to the Colegio Imperial de Los Niños de San Vicente.
The idea of the distribution group chaired by Dimas Gimeno is to get rid of its “non-strategic” real estate assets all over Spain, in order to reduce its debt. The total (asset) sales volume is expected to amount to around €1,000 million; to put that figure in context, the group owns assets worth around €18,000 million.
The building that has gone on the market now has a surface area of 7,343 m2. Another property, in Bilbao, worth around €70 million and measuring 5,487 m2, will also be put up for sale. The other properties are located in Albacete, Burgos, Jaén, Madrid, Murcia, Oviedo and Sevilla.
El Corte Inglés acquired the property on Colón, 1 from the British retail giant Marks and Spencers 16 years ago, together with 8 other department stores, located all over Spain, for around €150 million.
El Corte Inglés recorded profits of €160.63 million in its most recent financial year, which ended in February, up by 3% compared to a year earlier; and it increased its sales by 2% to €15,504 million, whereby recording its third consecutive years of sales growth, according to the group’s annual accounts. ECI is now backing the internet to continue its path of growth.
Original story: Levante EMV (by Ramón Ferrando)
Translation: Carmel Drake