Sonae Sierra Returns To Spain With €170M

19 October 2016 – Expansión

The real estate company owned by the Sonae group and the fund Sierra are going to invest in the Spanish market once again. The company, which already owns six shopping centres in Spain, and manages two more, has set itself the objective of investing at least €170 million in the country over the next five years. Of those, €115 million will be spent on the large luxury brand outlet that it is constructing in Málaga together with the US firm McArthurGlen.

“We have started to request the licences and we will begin construction at the beginning of 2017, with the aim of opening the centre in 2018”, said Alexandre Fernandes, Head of Investment for Europe. The remaining €65 million will be spent updating and expanding some of its existing shopping centres in the country. “We are not planning to sell any of our centres in Spain, but rather invest in them and look for opportunities to buy”, said Fernando Oliveira, CEO of Sonae Sierra.

In Spain, the company had decided to divest its least strategic assets. Nevertheless, its strategy has changed radically and Sonae Sierra is now focusing on growing in Spain. “The outlook has completely changed since the end of 2013, financing has returned and all of the brands want to expand their businesses”, said Oliveira.

Partnerships

In addition, the real estate company has decided to launch a new business line dedicated to the search for and management of co-investment commercial projects. “We see that international funds are expressing a lot of interest in investing in Spain, not only in shopping centres and high street premises (but also other assets). We think that there is a market for them and that we can help them with their investments and then continue with the management of those properties”, said Fernandes.

These joint companies, in which Sonae Sierra will hold a minority stake and will manage the acquired assets, will operate as Socimis, given that “that it the structure that is most attractive for investors due to the tax advantages”, say sources at the company. The first of these partnerships was closed in June, with the fund CBRE Global Investment Partners, with which it jointly purchased two shopping centres in Portgual and another one in Spain.

At the global level, the company aims to invest €2,300 million in the development of new real estate projects over the next five years and to continue growing its service offering to third parties.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

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