British Real Estate Firms May be Forced to Sell their Shopping Centres in Spain

16 June 2019 – Expansión

Two of the largest British real estate companies with interests in Spain are considering selling off some or all of their assets on the Iberian peninsula in light of the challenging climate in the retail sector at home.

The bankruptcy and restructuring of several high-street stores – including the department store group Debenhams and the owner of Top Shop, Arcadia – are leaving many premises in the UK empty. As such, questions are being asked about the debt on the balance sheets of the landlords of those properties, causing a rethink in their overseas strategies.

In this context, Intu Properties and Hammerson have both launched asset sales plans in an attempt to raise GBP 600 million and €500 million, respectively. In Spain, Intu owns 50% of Xanadú (Madrid), Puerto Venecia (Zaragoza) and Parque Principado (Asturias), and is also building a new complex in Málaga. It would likely sell its stakes to its existing partners – TH Real Estate in the case of Xanadú and CPPIB in the case of Puerto Venecia and Parque Principado – although it is also holding conversations with third parties in order to maximise the price of any potential sales.

Meanwhile, Hammerson, which specialises in outlet stores, is considering selling some of its shares in the Las Rozas Village (Madrid) and La Roca Village (Barcelona). It owns direct stakes in both of those complexes, as well as a 25% in Value Retail, a company that holds stakes in 9 outlets across Europe, including Las Rozas and La Roca. In total, Hammerson owns 41% of La Roca and 38% of Las Rozas.

Nevertheless, in parallel, Hammerson is looking to increase its stake in Vía Outlets from 47% to 50%. Vía Outlets is another outlet group, worth GBP 400 million, which owns 11 centres across Europe with 2 in Spain, specifically, in Mallorca and Sevilla.

Original story: Expansión (by Roberto Casado)

Translation/Summary: Carmel Drake

CBRE GI Puts Berceo Shopping Centre (Logroño) Up For Sale

25 October 2017 – Expansión

Real estate activity involving shopping centres is proving unstoppable. The fund manager CBRE Global Investors (CBRE GI) has hung the “for sale” sign up over the Berceo shopping centre, located in Logroño (La Rioja) and has engaged the consultancy firm CBRE to look for potential buyers for the asset. The shopping centre, which opened its doors in November 2003, is worth around €105 million, according to explanations provided by market sources to Expansión.

Berceo has a gross leasable area of 34,072 m2 and more than 2,600 parking spaces. The shopping centre recorded sales of €62 million in 2016, up by 9% compared to the previous year, and closed the year with 6.1 million visitors, up by 0.12% YoY. Its tenants include a number of Inditex brands, such as Zara and Pull&Bear, as well as Primark, El Corte Inglés and Media Markt. Moreover, Berceo has a Yelmo cinema and restaurant space with operators such as Foster’s Hollywood and Burger King.

With this operation, the manager is taking advantage of investors’ interest in the retail segment and, specifically, in shopping centres, to finish liquidating the portfolio of assets it inherited as a result of its acquisition of the European business of ING Real Estate, the Dutch bank’s property arm, in 2011.

Real estate investment in shopping centres amounted to a record-breaking €3,700 million in Spain in 2016. So far this year, €2,300 million has been invested in these types of assets.

Divestments

As part of that divestment strategy, CBRE GI sold off the Urbil shopping centre in Guipúzcoa and half of the Asturias Parque Principado shopping centre in 2013 – the other half was owned by Sonae Sierra. A year later, it sold Gran Vía de Vigo, Moraleja Green and Alcalá Magna, the latter two are located in Madrid.

In parallel, CBRE GI has been very active on the buy-side in recent months. Specifically, in May, the company acquired 70% of the H2O Rivas shopping centre – located in Rivas-Vaciamadrid (Madrid)– from Alpha Real Trust, which retained the remaining 30% stake. Beyond the shopping centre sector, in September, the manager teamed up with AXA IM Real Assets to purchase the student hall of residence company Grupo Resa.

The manager has approximately €3,100 million in assets under management in Spain and Portugal. Twenty of those assets are shopping centres.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake