TH Completes the Purchase of Islazul Causing the Investment in CRE to Go Through the Roof

20/08/2014 – Expansion

Another large transaction with a shopping mall starring as the lead is at the verge of being closed. Fund manager Tiaa Henderson (TH) Real Estate is giving the finishing touch to the purchase agreement on the Islazul shopping center, the second largest facility in the Community of Madrid region.

The investment fund has been born from a merger of Tiaa Creff and Henderson Global Investors. It offers €210 million for the 256.000 square meter property with a 90.000 square meter GLA split among 175 establishments.

TH´s bid is much better than the one of the Hines Group allied with the HSBC bank at the auction.

Currently, Islazul forms a part of a project portfolio developed by Lar and Ivanhoe Cambridge (Caisse de Dépôt et Placement du Québec). The mall, located in the Carabanchel neighbourhood in Madrid, opened its doors in 2008 after its owners had invested €350 million in its development.

At the moment, the Islazul shopping park generates returns of between €12 million and €15 million annually.

Reactivation

At the beginning of the year, Lar and Ivanhoe put the property up for sale at an asking price of €220 million. In March, the best bid submitted by Orion (€185 million) did not satisfy the vendors who then decided to run another auction for the property.

Tiaa Henderson may become the lawful owner of the center in late September.

The news on the Islazul purchase came about just few days after Socimi (REIT) Merlin Properties had paid €260 million for the Marineda shopping mall and a hotel in a complex in La Coruña.

Investment Fever

In the first half of 2014, national and international buyers invested jointly over €1.1 billion in the commercial real estate. Thanks to other, ongoing operations, the number can rise up even more by the end of the year.

For instance, at the end of June, Carmila created by Carrefour and held by such big-name investors as Pimco, Colony Capital, Axa, Credit Agricole Seguro and BNP Paribas Cardiff, submitted a €182 million bid for three shopping parks in Spain: the Holea in Huelva, the As Cancelas in Santiago de Compostela and the Alfares in Talavera de la Reina.

 

Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE

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