Tag: Intu

Shareholders Expected To Approve Intu’s Purchase Of Land In Malaga

6 March 2015 – Expansión

The British property developer has called a shareholders’ meeting to approve (its construction of) one of the largest shopping and leisure complexes in Spain.

The company that owns Puerto Venecia in Zaragoza (pictured above) and Parque Principado in Asturias is going to construct its third shopping centre in Spain, if its shareholders approve the plans at their meeting on 15 April.

In a statement issued yesterday (Thursday) to the London Stock Exchange, Intu Properties announced its decision to exercise a call option to purchase 30 hectares of land close to Torremolinos (Málaga) for €37.5 million. The company has already invested €4.2 million preparing for the project and it may also buy another adjacent site for €4.8 million.

The vendor of the land in Málaga is the Peel Group, a company that holds a stake in Intu, and so the other shareholders should authorise the transaction at their meeting. Moreover, Peel has committed to investing the money it receives from the sale of the site in Málaga into shares in the company, which is listed in London.

If the agreement is approved, Intu will invest €450 million in the development of a new shopping centre between 2015 and 2018. Its objective is to obtain an annual return of 7% on this investment from the rental of shops and restaurants in the complex. Intu plans to look for partners to buy shares in the development company that will build the centre.

In addition to its shopping centres in Zaragoza and Asturias, and its project in Málaga, the Intu group is planning other developments in Valencia, Vigo and Palma de Mallorca. Intu’s share price rose by 1.1% in trading on the London Stock Exchange on Thursday.

Original story: Expansión (by R. Casado)

Translation: Carmel Drake

Klépierre, Invesco And TH Offer €350m For Plenilunio

19 January 2015 – Expansión

The home straight/ Orion receives three binding offers for the Plenilunio Retail Park. Unibail Rodamco withdraws from the process.

The sales process for one of the largest shopping centres in Madrid is in its final stages with three finalists. The French company Klépierre and the funds Tiaa Henderson (TH) and Invesco have all submitted binding offers for the property.

Invesco is the latest candidate to join the bid for the centre; the French-Dutch group Unibail Rodamco has withdrawn from the process. The shopping centre operator had expressed interest in acquiring Plenilunio to create a Golden Triangle in Madrid, as the owner of three landmark properties: La Vaguada, ParqueSur and through this transaction, Plenilunio. However, the high price offered by its competitors has put pay to Unibail Rodamco’s aspirations, explain industry sources. The British real estate company Grosvenor has also expressed interest in the centre, according to real estate sources.

Thus, TH – which bid alongside a sovereign fund -, Invesco and Klépierre would all be willing to pay €350 million for this property, which occupies a surface area of 220,000 square metres. Plenilunio has 70,000 square metres of retail space (GLA), distributed over three floors, plus 2,500 parking spaces, according to the Spanish Association of Shopping Centres. The property, which has an occupancy rate of almost 98%, generates annual rental income of €20 million.

Upon receipt of the binding offers, the current owner, the US fund Orion, must choose whether to negotiate with a single finalist or to conduct a final competition with two of the finalists. It is expected to take this decision quickly as it aims to close the sale during the first quarter of 2015, as revealed by Expansión on 17 December.

Plenilunio, which opened in May 2006, was developed by the Spanish real estate firm Riofisa (acquired soon after by Colonial). Before its opening, Banco Santander bought the property for €275 million, and then sold it onto Orion for €235 million in 2009.

The US fund controls the property through its company Orion Columba which adopted a Socimi structure in September 2013. The sale of Plenilunio is the second large divestment that Orion has undertaken in Spain in recent months – it closed the sale of the Puerto Venecia shopping centre in Zaragoza at the end of 2014. The property, the largest in Spain, was acquired by the British real estate company, Intu Properties for €451 million. In October 2013, Orion paid €144.5 million for the 50% of the centre that it did not already own.

Plenilunio is one of 80 shopping centres expected to change hands over the next few months in Spain, according to Deloitte Real Estate. In 2014, more than €2,100 million was invested in shopping centres across the country, driven by the sale of Marineda in La Coruña for €260 million and Islazul in Madrid for €232 million.

Original story: Expansión (Rocío Ruiz)

Translation: Carmel Drake

Real Estate Sector To Close A Record Year In Spain

30/12/2014 – Expansión

BOOM INVESTOR / The arrival of international funds and launch of large investment REITs have increased investment over previous years to 9 billion euros. Both number of operations and total figures have soared. Large shopping malls and prime-location office buildings have been the most sought-after assets in 2014.

After more than five years of business decline, it was forecast that recovery would come to the Spanish real estate sector in 2014. However, the most optimistic scenario has played out in reality and exceeded all expectations.

Awaiting the year-end figures, this is already the second best year over the past decade, surpassed only by 2007, amidst the boom of the Spanish economy. “The market this year has been considerably more active than back in 2007. A larger number of assets and in higher volumes have been purchased, when compared to the 2007 prices,” explained experts from the Research division of JLL España.

So far this year, more than 6.18 billion euros have been invested in real estate for tertiary use (i.e. non-residential), according to Deloitte Real Estate.

This figure goes even further up to 9 billion, according to the Aguirre Newman consultancy, taking into account various debt portfolios secured with real estate assets as well as sale of land and housing.

These figures are double those recorded in 2013, 2012 and 2011 and attributable to a combination of several factors. “2014 was a year in which we had all the factors to foster investment: overall improvement of the economic situation, the rise of new players with liquidity and willingness to invest (the REITs), the return of funding and the need to sell certain close-ended funds,” says Javier Garcia-Mateo, director of Deloitte Real Estate.

New investors

Among the factors which most influenced the increase in investment are the new players in the sector: the REITs. Only four major listed real estate companies – Merlin Properties, Real Hispania, Lar Spain and Axia Real Estate, have invested over 2.4 billion euros. Among those investments made by December 24 was the purchase of the largest shopping mall in 2014: the Marineda City in La Coruña, by Merlin Properties for 260 million euros.

Just three days ago, the British realtor Intu Properties beat this record by paying €451 million for Puerto Venecia in Zaragoza. With these transactions, investment in shopping malls in 2014 amounted to €3 billion, the same amount invested in the entire real estate sector back in 2013.

The malls are not the only type of commercial property that has defined large-scale transactions. Street locations have also been blue-chip investment. Thus, companies such as Mango bought properties in Madrid and Bilbao to open large stores, while international funds, such as Axa Real Estate and Deka seek to be the landlords of the major brands on Gran Via in Madrid.

In the case of office space, investment has soared from January to September over 200%, up to 2.4 billion, according to CBRE. These figures are due to the purchase of portfolios, as for example, in addition to its four buildings in Barcelona and Madrid, Blackstone has acquired other four from SAREB a few days ago.

In terms of offices, it’s worth noting the purchase of two properties in Barcelona — Torre Agbar and Paseo de Gracia 111 — that will be turned into luxury hotels, as well as the numerous buildings sold by public administrations like that of the Generalitat.

“We are at the close of a fiscal year of a great deal of investing activities and we should expect the same level of activity for the next year on the market, though with certain changes in the investors’ profile,” states Jaime Pascual, CEO of Aguirre Newman.

Original article: Expansión (by Rocío Ruiz)

Translation: Aura REE

British Real Estate Company Pays 451 Million For Spain’s Largest Shopping Mall

26/12/2014 – lainformacion.com

The British property group, Intu Properties, has struck a deal with the Orion European Real Estate fund to acquire the Puerto Venecia complex in Zaragoza, the largest shopping mall in Spain, for €451 million.

The acquisition of Puerto Venecia mall by Britain’s Intu follows the group’s purchase of the Parque Principado shopping mall in Oviedo last year.

Puerto Venecia has a retail park of 82,600 square meters which opened in 2008, as well as a leisure and fashion area of 130,000 square meters which opened back in October 2012.

The Orion European Real Estate III fund had a 50% stake in the shopping mall since it was built and launched in 2008, and last year British Land acquired the remaining 50% for €144.5 million.

Rental income from Puerto Venecia shopping mall, which houses stores such as El Corte Inglés, H&M and Apple, is estimated at €22.4 million, according to Intu Properties, which estimates a net initial return of 5%.

“The transaction substantially accelerates our activities in Spain, which is a country where we see major opportunities for the type of genuinely regional destination center in which the Group specializes,” commented David Fischel, the CEO of Intu.

In this sense, Finchel highlighted that Puerto Venecia offers an attractive combination of shopping, dining and entertainment experiences, emphasizing that the mall is recording a strong growth in retail sales and provides an “excellent template” for the future development of sites “such as in Malaga,” where the British company expects to make significant progress in 2015.

Original article: lainformacion.com

Translation: Aura REE

Blackstone, Cerberus, Apollo, Intu & Singapore’s Government Poach Real Estate Bargains in Spain

6/10/2014 – Expansion

Blackstone, Cerberus, Apollo, Intu, the Singapore Sovereign Wealth Fund and China’s richest man are only few examples of big-name international investors who have carried out significant transactions on the property market in Spain over the past months.

In its latest report, CBRE Spain tries to answer the question what is the investor boom due to? Presently, the country’s market is the third hottest in Europe, ranking just behind the United Kingdom and Germany. Unlike its opponents, Spain has got up its sleeve historically low property prices and pretty positive outlook for economic recovery.

‘Since first real estate purchases back in July 2013 by foreign private equity firms like Goldman Sachs or Blackstone, we have observed a money-pouring fever on the part of all kinds of investors, ranging from international funds, private equity and family offices, as well as other locally found partners and sources of capital’, says Alejandro Campoy, general director for Investment at Aguirre Newman.

Their arrival marked the Spanish non-residential sector with a €3.23 billion FDI (Foreign Direct Investment) spent on offices, retails and logistics hubs.

What are they looking for? Great majority of foreign equity groups strives at value-adding and they do not hesitate to buy a property requiring refurbishment as long as an attractive discount is applied. For instance, a joint venture established by Baupost, Green Oak and Socimi (REIT) Lar acquired six retail parks for €160 million in total. To compare, Oaktree alone bought the Gran Vía de Vigo shopping center for €115 million.

Other, more conservative investors opt for prime assets rented by trustworthy tenants. To give an example, the headquarters of IBM has been purchased by Mexican group Financess, while the one of Vodafone by London & Regional Properties for €117 million.

Aside from custom investors from the U.S.A. and Europe, last months have also seen equity flowing from sovereign wealth and pension funds of China, Korea and Singapore. From January to June, the Asian countries mainlined €368 million, whereas during the entire year 2013 the amount post €50 million.

The most recent Asian investment examples are: the purchase of 30% stake in Spanish property manager GMP for more than €200 million by Singapore Sovereign Wealth Fund (GIC) or the hotel-entertainment project of Wang Jianlin, the richest man of China who bought the Edificio España iconic building in Madrid earlier this year.

When it comes to corporative investments, Spanish Socimis shone on this field like stars. With support of billionaires like George Soros or John Paulson and big-name companies like Cohen & Steers, Pimco or Goldman Sachs, all freshly listed REITs could do property shopping for more than €1.6 billion year-to-date.

 

Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE

Intu is planning to go public with its Spanish real estate company.

Intu Properties is studying the creation of a holding which would include all its real estate assets in Spain with the intention of going public in the Madrid Stock Exchange and thus obtaining capital from other investors to finance its development.

The British company would include in this company the mall Parque Principado, in Asturias, acquired last month jointly with the Canadian pension fund CPPIB. The holding, that would work as a socimi (listed public limited companies for real estate investments), would also include projects to build other distribution complexes in Málaga, Vigo and Valencia.

David Fischel, managing director at Intu Properties, declares that “there is a high possibility of creating a listed real estate group with the Spanish assets”, an option with many tax benefits, according to experts. Intu “would keep more than 50% of the holding and the entrance of other investors would make it easier to carry out investments in Spain without removing too many resources from the United Kingdom”.

For the moment, and in order to finance Parque Principado, Intu is searching for a credit for half of the price of the operation. Its cost could be around 6%, according to sources within the market.

Deducting this loan and the money CPPIB is providing for its 50% of shares, the amount to be paid by Intu would reach 40 million Euros. If it develops the one in Malaga, which is the most advanced project, the group hopes to invest a similar amount in capital, without taking in account the debt it will need for the construction.

Fischel considers that “it is the right moment to invest in Spain. The economic situation is stabilizing and the country seems to be one and a half or two years behind the United Kingdom, where we are starting to see the recovery. The acquisition of Parque Principado provides a base to take advantage of the potential recovery in Spain and to develop other projects”, Fischel declares, who has been working for 28 years in Intu.

After the acquisition of the Asturian complex, the priority for Intu properties is to grow organically in Spain. But the company does not discard further acquisitions such as Puerto Principado, where the former owners (CBRE and Sonae Sierra) faced the refinancing of the debt. “There is an opportunity of acquiring great malls of a high quality at a low price”, Fischel declares. In the Asturian centre, it hopes to obtain an annual yield of 7,2%.

But for the moment, the company is not analyzing actively any further acquisition. Its priority is to follow up the evolution of Parque Principado, and use this experience to develop the centers in Malaga, Valencia and Vigo, where it already has the plots.

“We want to have a base in the country, with centers in different locations that will allow us to negotiate agreements with chains of stores”, Fischel explains. “One of the reasons for the opportunities we see in Spain is that there are not very many projects ot develop new centers, when great international chains such as Primark and H&M have expansion plans, while those companies already established, such as Inditex rationalize their stores rotating towards the most important shopping malls.

Source: Expansión