5 October 2015 – Expansión
Retail assets are maintaining their hegemony as the property kings in Spain, channelling the majority of the investments made during the first nine months of the year in our country. Shopping centres and retail parks are proving to be the most sought-after assets by international investors. Moreover, autonomous regions such as País Vasco, are being forced to make their commercial legislation more flexible following an order by the Supreme Court; and this is generating high expectations in the sector.
In this context, we saw the Socimi Merlin Properties’ acquire 50% of the Arturo Soria Plaza shopping centre last week. The price exceeded €30 million and experts have not ruled out the possibility that the company, led by Ismael Clemente, could end up buying the remaining 50% from Acciona.
The furore over shopping centres began in 2014, with a record investment figure of €2,926 million, compared with €451 million in 2013 and just €30 million in 2012. The figure in 2014 even exceeded the volume reached at the height of the boom, given that in 2006, at the height of the rise of the real estate sector and the development of this kind of property in Spain, total investment amounted to €2,898 million, according to the real estate consultancy Knight Frank.
In this way, the Spanish market was the fourth most preferred country for investors in shopping centres and retail parks in Europe last year. 28 shopping centres changed hands out of the total stock of more than 680 in the country.
The largest shopping centre operations in 2014 included: the sale of Marineda, in A Coruña, to Merlin Properties for €260 million; and the sale of Islazul, in Madrid, to Tiaa Henderson for €232 million. (…).
This year, the largest operation has been the sale of Plenilunio. The French shopping centre specialist, Klépierre, paid the US fund Orion €375 million for the Madrilenian centre. And Klépierre’s appetite for the Spanish market does not end there. The French company is looking to invest up to €400 million more…and already owns 19 properties across the country, including Plenilunio. (…).
Investors are backing this kind of asset, attracted by the reactivation of the Spanish economy and the recovery in consumption, which is already being felt in shopping centres. Last week, the Bank of Spain revealed that GDP increased by 0.8% between July and September. The organisation, led by Luis María Linde, expects the economy to grow by 3.1% in 2015. (…).
On the buy-side, the large Socimis have also starred in many of the largest shopping centre purchases. Lar España, Axiare and Merlin have all closed operations involving this kind of property in recent months. One example is Lar España’s recent acquisitions, which it completed following its €140 million capital increase – it purchased the El Rosal shopping centre, in Ponferrada (León) this summer for €87.5 million; it also bought the Megapark Barakaldo retail park and outlet centre, for €170 million. A few months earlier, it paid €67.5 million for the As Termas centre in Lugo.
And 2015 is proving equally as important. Between January and September, investors spent €2,588 million buying commercial assets (mainly shopping centres, but also high street premises and supermarkets) in Spain, an increase of 42% compared with last year. According to David Méndez, Retail Analyst at JLL, “Investors are looking for prime shopping centres, with gross leasable areas (GLA) of more than 40,000 m2 and a varied supply of reputable tenants”. (…).
“We expect total investment in the segment to exceed €3,000 million by the end of 2015, but it is still too early to say whether the figure will exceed the volume reached in 2014 (€3,344 million)”, said David Méndez, from JLL.
New legislation in País Vasco
Meanwhile, some operators are rubbing their hands after the Supreme Court adopted a decision last week to overthrow legislation introduced by the Basque government in 2009 imposing restrictions on shopping centres, whereby their sales area cannot exceed 25,000 m2. This veto by the Basque Executive sought to encourage small businesses and meant that the autonomous region’s legislation was one of the most restrictive in Spain regarding large stores, together with Cataluña and the Balearic Islands.
The Supreme Court was addressing a request made by Unibail Rodamco, which had come up against the Basque government in the courts over its intention to expand the Garbera shopping centre in Guipúzcoa. The high court maintained that the Basque legislation violates a European directive. Experts in the sector agree that this could result in an about turn in the market, with more investments forecast.
Original story: Expansión (by R. Ruiz and G. Martínez)
Translation: Carmel Drake