28/11/2014 – Expansion
They reign in the real estate industry of Spain. Big or small, in the outskirts of large cities or in the centers of towns, shopping centers account for most of property deals in the country.
From January 1st to November 15th, almost 30 of them changed hands. According to Deloitte Real Estate, investment in the Spanish retail assets amounted to about €1.63 billion.
5% of Europe’s Total
In the first half of the year, €890 million were spent on shopping malls in the entire Europe. Investments in Spain represented 5% of the total, beaten only by the UK and France.
By transaction volume, over-€200 million amounts were destined for purchases of the Islazul retail park (Madrid) bought by fund Tiaa Henderson for €230 million and the Marineda (La Coruña) sold to Socimi (REIT) Merlin Properties for €260 million. Another Socimi, Lar España, has invested a little bit more than €160 million in five shopping centers.
All the Spanish Socimis, opportunistic funds and institutional investors contributed to the avalanche of deals on the national market.
‘Private equity investors, who accounted for majority of acquisitions last year, now are ceding the ground to more conservative buyers like the Socimis, German property and American pension funds’, explained Javier Garcia-Mateo, Real Estate head at Deloitte.
Among the steps taken by these new players on the Spanish ground, noteworthy are: the purchase of the Castellana 200 complex in Madrid, including a shopping mall and office space, by Canadian PSP, and the acquisition of 50% of the Zenia unit in Alicante, performed by the Alaska Permanent Fund. The two totally different properties prove interest in all kinds of retail assets.
Aside from the January-November investment volume, further deals worth at least €600 million are expected to be sealed still before the end 2014. For instance, the Plenilunio shopping mall in Madrid (pictured), put up for sale by Orion at €400 million. The fund paid €262 million for it in 2009.
As Deloitte Real Estate assures, there are more than 80 more shopping centers in Spain currently up for sale. It is said they will be handed over to best bidders within the next six months and the total amount proceeding from their sales will reach €3.5 billion.
‘Large part of prime assets have depreciated by 30% on average in less than a year, and the secondary by 14%’, says Mr. Garcia-Mateo. ‘And this did not happen because rental prices had gone up but because of the yields’.
Presently, there are 547 shopping malls in Spain, with Madrid concentrating almost 100 of them. Their gross lettable area totals at 15.43 million square meters.
Original article: Expansión (by Rocío Ruiz)
Translation: AURA REE