Barcelona’s Diagonal Mar Reopens After a €29M Refurb

14 November 2018 – Eje Prime

Diagonal Mar is reopening its doors. The shopping centre, located in the Catalan capital and owned by Deutsche Bank, has opened again after being subjected to a comprehensive refurbishment since July last year, in which €29 million has been invested.

Following the renovation, the complex has expanded its commercial surface area by 7,500 m2, which will allow it to welcome fifteen new retail operators and to create 150 new jobs. Moreover, Diagonal Mar has also renovated the restaurant area with seven new additions and thirteen renovated premises.

Diagonal Mar, which first opened in 2001, is located in the 22@ district of Barcelona. Now, the complex has a total surface area of more than 90,000 m2 distributed across 200 establishments dedicated to commercial and leisure activities.

Original story: Eje Prime

Translation: Carmel Drake

Intu’s New Strategy in Spain: to Change the Names of its Shopping Centres

16 May 2018 – Eje Prime

Intu is betting on branding to raise the profile of its name in Spain. The company, which has a vast presence in the United Kingdom, where it owns almost twenty shopping centres, is going to replicate its British strategy in Spain, by adding the word Intu to the name of its retail complexes. This week, the company announced that its shopping centre in Zaragoza, which has been called Puerto Venecia to date, is now going to be named Intu Puerto Venecia.

It was in 2014 when Intu reached an agreement with the fund Orion European Real Estate to acquire the Puerto Venecia complex, the largest shopping centre in Spain, for €451 million. The complex contains a retail park spanning 82,600 m2, which was inaugurated in 2008 and a leisure and fashion area measuring 130,000 m2, which opened in October 2012 (…).

Since the purchase by Intu, the British group has carried out a series of changes to the appearance and management of the shopping centre. But it has not been until now that the group has decided to complete the process by adding the word Intu to the name of the complex, whereby following in the footsteps of Intu Asturias.

Now, the next step will be for Intu to apply the same strategy to the Xanadú shopping centre. The British group completed the purchase of that shopping centre, located in Arroyomolinos (Madrid), from Ivanhoé Cambridge for more than €520 million in March last year. That acquisition was the largest operation since Deutsche Bank paid €495 million for Diagonal Mar.

In May of the same year, Intu created a joint venture with TH Real Estate to share the ownership of the Madrilenian shopping centre, transferring 50% of the complex to TH Real Estate for €264.4 million, half of the amount that it had paid for Xanadú.

That shopping centre, constructed in 2003, has a total surface area of 153,695 m2 spread over two storeys and with a total of 220 stores, making it one of the largest retail complexes in Madrid. Its tenants include Inditex, El Corte Inglés, Hipercor, Bricor, Decathlon, Primark and Apple. Xanadú Madrid receives almost 13 million visitors per year and generates sales of around €230 million.

Shopping centres on the rise in Spain

Intu’s commitment to Spain comes at a good time for this retail format in the country. Sales registered at these complexes rose by 3.5% in 2017, to exceed €43.5 billion.

Specifically, revenues in the sector amounted to €43.59 billion in 2017. The market share of shopping centres and retail parks rose to reach 17.9%. Last year, around 1,900 million visits were registered at these complexes.

Meanwhile, investment in the sector soared by 35% in 2017, to €2.7 billion. During the course of last year, 29 transactions were closed involving 36 assets, according to data from the Spanish Association of Shopping Centres and Retail Parks (AECC).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Deka Puts Most of its Recently Acquired Inditex Stores Up for Sale

23 April 2018 – Eje Prime

After closing one of the most important real estate operations of the year, Deka is looking to capitalise on its investment with a new knock-on effect. The German fund manager has just put back on the market the majority of the stores that it purchased at the beginning of the year from the Galician giant Inditex, in an operation worth around €400 million, according to sources close to the sales process, speaking to Eje Prime.

According to the same sources, Deka has divided the portfolio into three. The first part comprises two properties, which the fund is going to hold onto, those at number 16 Calle Preciados, in Madrid (with 2,725 m2 of retail space) and number 58 Calle Pelayo, in Barcelona (with 5,134 m2 of retail space).

The second and third parts of the portfolio are already up for sale. The aim of Deka is to divest the assets located in secondary cities (such as those located in Zamora, Albacete and Ciudad Real) by placing them on the market and also to listen to offers for the assets located in cities such as Valencia and Madrid, which, although they are not strategic for the fund, it is not in a rush to sell.

Deka, which will also hold onto one of the two properties that it purchased in Lisbon (located on Calle Augusta), acquired the 16 assets in January for approximately €400 million, and chains belonging to the Inditex group continue as the tenants of those establishments.

These two moves, both the purchase and the sale, demonstrate Deka’s interest in the Spanish market. As Eje Prime revealed, Deka’s route map involves doubling its investment volume in the country from €1 billion to €2 billion over the next five years.

Currently, the fund manager owns a portfolio of tertiary assets in Spain including the office buildings on Avenida Diagonal 640 and Sarrià Forum in Barcelona and the mixed-used (office and retail) property El Triangle, also in the Catalan capital. Moreover, the group owns the Ballonti shopping centre in Bizkaia, which it recently put on the market for around €150 million, and the Espacio Mediterráneo shopping centre in Cartagena, as well as the Hotel Meridien de Las Ramblas in Barcelona and another vacation hotel in Mallorca.

The company’s presence in the Spanish real estate sector dates back to the 1990s when it had a portfolio of assets with a very similar volume to its current size. At that time, Deka owned large spaces such as the Diagonal Mar shopping centre in Barcelona and the Castellana 35 and Castellana 79 buildings in Madrid. But, in around 2006, according to Esteban de Lope, Director of the Retail Property Fund Management Department at Deka, “an opportunity arose and we sold almost all of our portfolio at a significant profit”.

After hiding in the shadows for five years, competing in other European markets such as the French, British, Belgian and Dutch, as well as its own German real estate market, Deka returned to Spain in 2010 with the acquisition of the Avenida Diagonal 640 building.

The sale of the batch of assets acquired from Inditex coincides with the group’s desire to divest some of its businesses in Spain. Lope said that “given the nature of the market, it is easier for Deka to divest than to purchase”. “The Inditex portfolio was an exception” – says the director – “they wanted to sell quickly, but they needed to be certain that the buyer had money to invest; thus an opportunity arose, with the condition of us having to move very fast”.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Deutsche Bank Negotiates Purchase Of L’Aljub Shopping Centre

9 November 2017 – Expansión

The real estate sector is heading for a new investment record this year and shopping centres are one of the star segments on the rise. Deutsche Bank, which marked a milestone in 2016 with its purchase of Diagonal Mar, wants to strengthen its position in this market and to this end, is negotiating the acquisition of the L’Aljub shopping centre, located in Elche. The operation could be closed for a price of more than €170 million, according to market sources.

L’Aljub is currently owned by the fund Seva (Southern European Value-Add Mandate), managed by TH Real Estate for the investors TPG Real Estate – the real estate platform of the international manager TPG – and Partners Group. The consultancy firm Cushman & Wakefield is advising the vendor and CBRE the buyer.

This investment vehicle, which also owns two other retail assets in Italy, has a combined value of €300 million. The three assets were acquired a year ago from TH Real Estate for €250 million.

In addition to the retail and leisure premises, L’Aljub also houses an Eroski hypermarket on the ground floor. TH Real Estate purchased that store from Eroski a month ago through this investment vehicle for €18.7 million.

This investment in L’Aljub includes the hypermarket, which has a surface area of 9,900 m2, as well as the space leased by Primark (4,500 m2) and the gas station (200 m2), operated by Eroski.

The shopping centre was inaugurated in August 2003 and has a surface area of more than 60,000 m2, spread over two floors, as well as an extensive underground car park. The centre is home to 120 stores and 3,200 parking spaces (free of charge). Some of its most high profile operators include Inditex, H&M, Primark, Mango and Cines ABC.

If the negotiations prove fruitful, Deutsche Bank would strengthen its position in the retail segment in Spain. Last year, the company purchased the Diagonal Mar shopping centre (Barcelona) for almost €500 million. After the purchase of Xanadú, that operation was the second largest ever closed in the shopping centre segment.

Investment

Another example of the interest in this type of asset was the purchase of Xanadú by Intu Properties in March for €530 million. Subsequently, the British created a company with TH Real Estate to share ownership of the Madrilenian shopping centre.

Banca March has also decided to back this kind of asset with the purchase of the ABC Serrano shopping centre in Madrid this summer for €130 million, debt included. Meanwhile, Klépierre acquired Nueva Condomina in Murcia for €230 million earlier this year.

In this way, investment in the segment during the 10 months to October amounted to €2,300 million, which suggests a high volume year, behind only the historical maximum, recorded last year, of €2,700 million.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Deutsche Bank Invests €32M On Complete Renovation Of Diagonal Mar

22 September 2017 – Eje Prime

Deutsche Bank is subjecting one of its star assets in Spain to a facelift. The company is going to invest €32 million on the comprehensive renovation of a shopping centre that it purchased last year for €493 million, according to Isabel Bofill, the manager of the complex, speaking to EjePrime (…)

“In accordance with the needs of the market, we have decided to cut the cinema space in half and add an extra 5,000 m2 to retail”, explains Bofill. The complex is already immersed in the construction work and has all of the permits necessary for this new area of the shopping centre to start to take shape.

“It has taken us several years to get to this point, to give the shopping centre a facelift, but Deutsche Bank’s commitment to position Diagonal Mar (in the market) is real”, says Bofill. The first phase of this construction project will involve converting the third floor of the complex, which has been used only for leisure until now, into another floor for retail, together with restaurants and cinemas (…).

Although the decision regarding how many new stores will be created as a result of the construction work has yet to be taken, Bofill says that one of the objectives of this renovation is to respond to the current needs of retail: the megastores. “A shopping centre has to be in constant movement: when an operator disappears, it is not bad, it is simply the end of a phase”.

Bofill was referring to the departure of Fnac from Diagonal Mar, which is due to leave shortly, whereby freeing up 3,900 m2 of space for new players (…).

The comprehensive renovation of Diagonal Mar is expected to be completed by next June. To this end, Deutsche Bank has also committed to carrying out a rebranding of the whole complex and to a general overhaul of the whole centre. “We are going to change the lighting, the floors, the rest areas…we want it to be a completely new commercial thoroughfare”, explains the director.

Perhaps one of the most ambitious proposals at Diagonal Mar, which increased its footfall by 2.5% last year to 17.1 million visitors, is its plan to change the whole façade of the property. “It is old and if we want to project a younger image and appeal to new consumers, we have to make way for a guise that belongs in the 21st century”, explains the director.

Diagonal Mar is currently managed by the real estate consultancy firm CBRE.

Diagonal Mar was designed by Jean-Louis Solal and Robert A.M. Stern and inaugurated in 2001. Located next to the 22@ district in Barcelona, the shopping centre has a gross leasable area of approximately 90,000 m2 and its tenants include brands such as Alcampo, Cinesa, Media Markt, Primark, H&M and the Inditex Group.

Deutsche Bank acquired Diagonal Mar through its real estate arm in Spain, Deutsche Asset Management (Deutsche AM) (…), which has assets under management worth €1,300 million.

The company’s portfolio in the Iberian Peninsula currently comprises 17 real estate assets, specifically: seven shopping centres; seven office buildings; and three logistics assets, with a combined gross leasable area of 420,000 m2 (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Aguirre Newman: Inv’t In Shopping Centres Amounted To €3,500M In 2016

8 May 2017 – Iberian Property

Total investment in shopping centres in 2016 amounted to €3,500 million, an increase of 59.1% compared to 2015 and the highest on record, according to the Estudio de Mercado Centros Comerciales 2016/2017 published by Aguirre Newman.

During the first trimester of 2017, elevated investment activity continued, with more than €1,000 million invested in transactions involving shopping centres.

Thanks to this level of investment, in 2016, the shopping centre segment was the second most dynamic real estate market, after offices, for the second year running. As regards the kind of buyer, institutional investment funds were the most active, accounting for more than 52% of the total volume, as were the Socimis, with more than 38%. The remaining activity was undertaken by real estate companies and private investors.

In 2016, more than 35 investment transactions were closed, seven of which involved portfolios. The main transaction involving a single asset took place in Barcelona, with Deutsche Bank’s purchase of the shopping and entertainment centre Diagonal Mar, for just over €490 million. Also, the purchase of Metrovacesa by Merlin Properties had a very significant impact on the shopping centre figures, accounting for around 28% of the total transaction amount.

During 2016, there was a slight containment of initial yield rates “due to the positive macroeconomic environment and the perception of a potential return to an upswing in rents”, according to Aguirre Newman. In the case of “gold” shopping centres, transactions closed in a punctual manner, below 4%, a record low for yields in this market.

The report from Aguirre Newman also points out that new supply incorporated into the 2016 market covered a gross leasable area (GLA) of more than 273,000 m2. The main shopping centres inaugurated in 2016 were Parque Nevada (Granada) and FAN Mallorca Shopping (Palma de Mallorca). Of the 273,000 m2 of new space, 17% was the consequence of the expansion of existing shopping centres.

Original story: Iberian Property

Translation: Carmel Drake

Aguirre Newman: Inv’t In Shopping Centres Exceeded €1,000M In Q1

4 May 2017 – Expansión

Shopping centres are continuing to capture investor interest and in Q1, retail represented the second most active real estate segment, exceeded only by offices. After a record-breaking year in 2016, with an investment volume of more than €3,500 million, up by 59%, investment activity in this type of asset continued during the first quarter of 2017 to amount to more than €1,000 million, according to a study compiled by Aguirre Newman.

Milestones such as Deutsche Bank’s purchase of the Diagonal Mar shopping centre (Barcelona) for €495 million last August and Intu’s recent acquisition of the Xanadú shopping centre in Arroyomolinos (Madrid) for €530 million have carried this market to historical maximums.

Institutional investment funds account for 52% of the total investment volume, followed by Socimis, with 38%, and then real estate companies and private investors. The forecasts indicate that investors’ interest in this market will continue in 2017, although “it will be hard to achieve the investment volume recorded in 2016 given the lower supply of products for sale”.

Aguirre Newman’s study predicts that around 235,000 m2 of new surface area will be incorporated into the market this year, compared with 273,000 m2 last year. Of the total, 80% will correspond to new supply, whilst the remaining 20% will be generated by the expansion of existing shopping centres.

By autonomous region, Andalucía, Madrid, Valencia and Cataluña account for 55% of the shopping centres in Spain and 58% of the gross leasable area (GLA). By contrast, Cantabria, La Rioja and Ceuta are the autonomous regions with the smallest gross leasable areas, alongside Melilla, which is the only region not to have any shopping centres at all.

In terms of returns, the initial rate required for the best shopping centres will continue to range between 4% and 4.5% although that figure may be lower for certain very unique assets.

According to the study, demand for retail premises from medium and large chains will continue to focus on the best performing shopping centres, whilst small local traders, which have a more limited appeal, will opt for the poorly positioned centres.

Original story: Expansión (R. Arroyo)

Translation: Carmel Drake

Deutsche Bank Negotiates Sale Of Gran Vía Alicante

30 April 2017 – Expansión

The real estate market for shopping centres is unrelenting. In the latest deal, Deutsche Bank has hung the “for sale” sign up over Gran Vía Alicante. The German entity’s real estate division, RREEF, which has engaged the real estate consultancy firm JLL to sell this shopping centre, has already received several offers for the asset.

Whilst the operation has not been closed yet, one of the players lining itself up as a candidate to take over the shopping centre is the British fund Europa Capital.

Moreover, one of the other investors interested in the asset is a consortium formed by Eurofund Capital Partners and Patron Capital and Carmila, the real estate subsidiary owned by Carrefour, according to market sources, which value the asset at just over €50 million.

The centre has a retail surface area of 37,300 m2, however, that figure includes a hypermarket owned by Carrefour, measuring 17,050 m2, which falls outside of the perimeter of this transaction.

Specifically, the retail space for sale, which has a gross leasable area of more than 20,200 m2, contains around 80 stores distributed over three floors, as well as an underground car park with 1,600 spaces.

Tenants

The shopping centre, inaugurated in November 1998 and renovated in 2012, received almost 5.3 million visitors last year and has an occupancy rate of 95% of its gross leasable area.

The shopping centre’s main tenants include brands such as Primark, H&M, Lefties, Massimo Dutti, Pull & Bear, Juguettos, Calzedonia, Natura and Fosters Hollywood, amongst others.

Gran Vía de Alicante, located on Calle José García Sellés, competes with Plaza Mar 2, the largest shopping centre in the town, spanning 43,600 m2.

In addition, other nearby shopping centres include Parque Vistahermosa, measuring 34,000 m2, San Vicente Outlet Park, measuring 36,500 m2 and Puerta de Alicante, measuring 34,500 m2.

Investment

Shopping centres are one of the real estate assets that have sparked the most interest amongst investors in recent years.

In 2016 alone, more than €3,700 million was invested in this segment, which constituted the second largest market in the real estate sector after the office segment.

The main operations closed last year included the sale of Diagonal Mar (Barcelona), which was acquired by Deutsche Bank from Northwood in August for €495 million, and the sale of Gran Vía de Vigo, which the Socimi Lar España acquired from Oaktree for €145 million.

So far in 2017, another mega-operation has been closed with the British fund Intu’s acquiring the Xanadú shopping centre (Arroyomolinos, Madrid) for €530 million from Ivanhoé Cambridge.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

TH Real Estate Negotiates With Intu To Buy 50% Of Xanadú

21 April 2017 – Expansión

Intu has found a partner for its mega-investment in the Madrilenian shopping centre Xanadú, which it purchased from Ivanhoé Cambridge in March for €530 million. Specifically, the British fund is holding advanced negotiations with TH Real Estate to transfer it 50% of the shopping centre.

According to sources in the market, TH Real Estate, which bid for the asset by itself in the tender, has engaged Cushman & Wakefield to advise it in this operation. The fund manager declined to make any comment about the deal.

The purchase of Xanadú by Intu was partially funded through a five-year loan from Santander, BBVA, Credit Agricole and CaixaBank, amounting to €263 million. Intu contributed the rest of the investment using its own funds.

The shopping centre, excluding the management company and the Snowzone, was valued in February this year at €526 million, which represents an initial net return of 4.4%.

The asset, located in the Madrilenian municipality of Arroyomolinos, sparked interest amongst several investors, although only Intu and TH Real Estate reached the final round, and the latter may now become an ally in the deal anyway.

The purchase of Xanadú represented the largest operation involving a shopping centre in the history of the market in Spain, ahead of the €495 million that Deutsche Bank paid for Diagonal Mar (in Barcelona) in August, the €451 million that Intu paid for Puerto Venecia (Zaragoza) and the €375 million that Klépierre paid for Plenilunio (Madrid).

Xanadú, constructed in 2003, is currently home to more than 220 establishments. It has a surface area of 153,000 m2 and 8,000 parking spaces. The shopping centre – one of the largest in Spain – receives almost 13 million visitors per year and generated sales of around €230 million last year.

Original story: Expansión (by R. Arroyo and R. Casado)

Translation: Carmel Drake

Sareb Finalises Sale Of Parque Corredor To Redevco & Ares

6 April 2017 – El Confidencial

One of the most entangled real estate operations in recent times is about to see the light. Namely, the sale of the Parque Corredor shopping centre, a giant in the retail sector, with a surface area of 123,000 m2 and 180 stores, located in the Madrilenian town of Torrejón de Ardoz, which Sareb has been trying to sell for four years.

It is the commercial jewel in the crown of the entity chaired by Jaime Echegoyen. The bad bank is the main shareholder, with 40% of the share capital, which it inherited from Catalunya Caixa. But, until now, that stake had been insufficient to convince any buyer, given that it does not guarantee control over the centre. Nevertheless, Sareb has teamed up with Perella to sell their shares to Redevco and Area Group en bloc, a move that will allow the new owners to acquire almost 60% of the share capital. All of the parties have declined to make comments.

The operation has been on the cards for months and although it has not been completed yet, according to the sources consulted by El Confidencial, conversations are in an advanced stage and are likely to come to fruition. El Corte Inglés may play an important role in the outcome given that together with Alcampo, it owns another 25% of the centre’s share capital, and their stake could also end up forming part of the transaction.

Sareb is being advised in the operation by Knight Frank, Perella is being advised by Cushman & Wakefield, whilst Redevco and Ares are working with Deloitte.

Depending on the total percentage that ends up being acquired, the final amount of the operation could reach €120 million, whereby valuing the entire centre at around €200 million, an amount that would allow Parque Corredor to join the growing number of shopping centres whose sales have exceeded €100 million, such as Xanadú (€530 million), Diagonal Mar (€495 million), Puerto Venecia (€451 million), Plenilunio (€375 million), Gran Vía Vigo (€145 million), Nassica (€140 million) and L’Aljub and Alcalá Magna (both €100 million).

Shopping centre alliance

Redevco and Area Management decided to join forces a year and a half ago, when they created a joint venture, Redevco Iberian Ventures, endowed with €500 million of capital and with the aim of acquiring shopping centres in Spain and Portugal. The new company was constituted with six assets, contributed by the two shareholders, and the objective of closing several acquisitions. The first was completed last spring, when it purchased six shopping centres in Extremadura and Andalucia, with a combined surface area of 84,250 m2, from Bogaris for €95 million. (…).

With Parque Corredor, the joint venture is acquiring a great asset near to the Spanish capital, but it needs significant renovation work, and the associated investment is estimated to amount to around €15 million, according to real estate sources. (…).

The shopping centre receives 10 million visitors per year and its tenants include Primark, H&M, Kiabi, Alcampo, Toys “R” Us and Cinesa cinemas. (…).

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake