Carmila Acquires La Verónica Shopping Centre in Antequera for €16M

4 January 2019 – Diario Sur

Carmila, Carrefour’s real estate subsidiary, has acquired a shopping centre spanning 12,000 m2 in Antequera for €16.1 million plus eight other establishments across Spain for €9.6 million, bringing the total investment made by the firm to €25.7 million.

The La Verónica shopping centre, which comprises 57 retail premises, is located in an expanding business area of the city in the province of Málaga, adjacent to a Carrefour hypermarket, which the French company purchased from Eroski, according to a statement issued yesterday to this newspaper.

The stores are home to brands such as Inditex, OVS Kids and Springfield, and the shopping centre also has a multi-screen cinema. According to Carmila’s estimates, with the current renovation of the complex, the shopping centre will offer organic growth over the medium term, which will increase its profitability by up to 100 basis points.

The other eight establishments acquired by the real estate company across Spain include six stores located in a shopping centre that already formed part of its portfolio and two other shops that the group will end up buying in the second half of the year.

In addition, Carmila has completed the sale of a batch of medium-sized stores to Klépierre, owner of the Turin-Grugliasco shopping centre, located in the Italian city, for €16.3 million.

Original story: Diario Sur 

Translation: Carmel Drake

Klépierre to Invest €45M in Expansion of Maremagnum Shopping Centre in Barcelona

3 May 2018 – Eje Prime

The world’s shopping centre giants are very much focused on Spain. Whilst at the beginning of the year, Unibail-Rodamco announced that it was putting up for sale four non-strategic shopping centres in Spain, today, it is another French firm, Klépierre, who is picking up the gauntlet and redoubling its commitment to the country. The company is going to invest €45 million in the expansion of its Maremagnum shopping centre, located in Barcelona, according to sources at the company speaking to Eje Prime.

The group estimates that it will spend €45 million to increase the complex by 8,000 m2, space that will be added to the second floor and sides of the shopping centre. According to the company, the building work will begin in the coming months, although it is not expected to be completed until the second half of 2021. This is the only renovation or expansion project that Klépierre currently has planned in Spain for the next few years.

Maremagnum is one of the jewels in the crown of Klépierre. Located in one of the most touristic enclaves of Barcelona and where a large number of cruise ships disembark every day, the complex was launched in 1995 and was renovated in 2012.

Currently, Maremagnum has a total surface area of 22,542 m2, of which 18,800 m2 are dedicated to commercial activity. More than 154 brands operate in the shopping centre, including the Swedish giant H&M, the majority of the Inditex chains, the US firm Victoria’s Secret and restaurant operators such as McDonalds.

Maremagnum has formed part of Klépierre’s portfolio since 2015 when it completed the purchase of the Dutch company Corio for €7.2 billion. The French group completed the acquisition of Corio after launching a public exchange offer in October 2014 for 93.6% of the shares in circulation.

The objective of the French real estate company with that purchase was to expand its presence in countries such as France, Italy, Spain and Portugal, given that Corio owned complexes in seven counties and in urban centres such as Amsterdam and Istanbul, as well as in cities such as Madrid, Rome, Turin, Utrecht and Berlin.

Specifically, following that merger, Klépierre took ownership of an asset portfolio comprising 178 shopping centres spread over 16 European countries with a combined asset value of €21 billion. In this way, after the merger, Kléperre’s portfolio in Spain comprised around twenty shopping centres, worth more than €2.26 billion, and which generate a profit of €110 million for the group (…).

Good results for the sector in Spain 

In macroeconomic terms, shopping centres are performing well in Spain at the moment. Turnover for these types of assets rose by 1.5% last year with respect to the previous year, whilst visitor footfall grew by 1.1% YoY.

The sectors that performed the best last year with respect to 2016 in terms of sales were the home, leisure and restaurant sectors, with increases of 5%, 3.7% and 2.7%, respectively, according to a report from Cushman&Wakefield.

According to the real estate consultancy, new additions such as customer advisory services and sensory and emotional perception, which create new experiences for users, have helped this increase in shopping centre sales figures and visitor numbers. Nevertheless, consumer electronics stores saw their sales fall by 1.8% last year, with respect to 2016.

The occupancy rate of the assets analysed was 91% in 2017, three points above the level last year. The higher demand for retail space also led to increases in rents in shopping centres, which saw rental prices rise by 1.4% last year.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Carrefour Property Manages 20% of Spain’s Retail Space

2 April 2018 – Eje Prime

Carrefour Property is continuing to expand its map of shopping centres in Spain. The real estate subsidiary of the French distribution group has started the second quarter of the year with a portfolio of retail space under management spanning more than 2.6 million m2. That figure represents 20% of the total surface area of shopping centres in Spain.

The long list of retail plots controlled by the subsidiary of the Carrefour giant has increased in recent months with the management of the following centres: Gran Vía de Hortaleza (Madrid), Puerta de Alicante, Augusta (Zaragoza) and La Verónica (Málaga) in recent months, according to a statement issued by the company.

In total, Carrefour Property España manages 110 centres throughout the country: 82 centrally and the remaining 28, all of which are large shopping centres, through specific teams at each site.

The company’s Director of Shopping Centres, Antonio Fidalgo, stressed that “the management of retail spaces is one of the most important areas of our business, given that we not only manage our own centres, we also manage centres owned by other companies such as Merlin Properties, Klépierre, Carmila, Grupo Lar and Pradera, amongst others”.

Original story: Eje Prime

Translation: Carmel Drake

Unibail Will Invest at Least €800M in Spain Over 6 Years

26 January 2018 – Expansión

Unibail-Rodamco, the largest European real estate group, has committed investments for projects in its portfolio in Spain amounting to, at least, €800 million between now and 2024; it has already disbursed €120 million of that figure.

The Director of Development and Investments at Unibail-Rodamco in España, Javier Solís (pictured above, left), explained yesterday at a meeting organised by IESE, Tinsa and Savills Aguirre Newman, that the company has projects in its portfolio spanning a new gross leasable area (including extensions) of 187,000 m2 and a total committed investment of more than €800 million, reports Efe.

Of the projects underway, the director highlighted the shopping centre in Benidorm (Alicante), whose construction has already commenced and which is expected to open in 2020. In his opinion, the increase in visitor numbers and sales at shopping centres suggests “that returns have the potential to rise”.

The director explained that some of the investment planned for the coming years will be spent on improving its assets so that “they are more than just a place to shop”. In this sense, Solía advocates transforming them into centres for meeting up, having fun and being entertained, for enjoying new gastronomic experiences and with higher standards in terms of energy efficiency and sustainability.

In terms of future possible purchases, Solís said that the company’s intention is to incorporate new assets that are already operational, although, for the time being, it does not have any operations on the table.

In Spain, Unibail-Rodamco owns a dozen shopping centres and has two more under development. Its most high profile assets include Parquesur and La Vaguada (in Madrid) and Les Glòries and La Maquinista (in Barcelona), worth around €3.7 billion.

Westfield

Unibail-Rodamco, which has a presence in 11 European countries, reached an agreement at the end of 2017 to purchase its Australian rival Westfield for $24.7 billion (€19.8 billion).

The operation will result in the creation of a colossus with a gross asset value of €61.1 billion and a presence in 13 countries. Following the integration, Unibail-Rodamco will extend its competitive distance over its main European rivals, Klépierre and Hammerson. Indeed, one month ago, the latter announced an agreement to purchase Intu and grow in the shopping centre segment.

Original story: Expansión

Translation: Carmel Drake

Deloitte: Inv’t In Retail Sector Will Reach €3.046bn in 2017

23 November 2017 – Expansión

Shopping centres have reached their cruising speed. After breaking all records last year, with a transaction volume of €3.769 billion, investment in the sector is maintaining its strong dynamism and could reach €3.046 billion by year-end. That would represent the second highest annual figure for a decade, according to research by Deloitte for The Shopping Centre Handbook.

So far this year, investment in shopping centres has amounted to €2.296 billion, which represents 30% of the total volume invested in the non-residential real estate market in Spain. Moreover, the remaining weeks of the year are expected to be particularly busy, which should allow the figure to exceed the €3 billion threshold in 2017.

Historical operations, such as the purchase of Xanadú (Arroyomolinos, Madrid) by the British fund Intu Properties for €520 million and the subsequent sale of 50% of that asset to TH Real Estate for €264 million; and the acquisition by Klépierre of Nueva Condomina, in Murcia, for €230 million, have catapulted investment this year despite the fact that, if the outstanding operations in the pipeline materialise, the total volume will be 19% lower than in 2016.

Record operation

Compared with other countries in Europe, Spain is consolidating its position as the third largest market in terms of investment, accounting for 16% of total volume. In this sense, the purchase of Xanadú leads the ranking of the largest operations transacted in Europe this year. Nueva Condomina also features in the list of top 5 deals, together with the purchase of Rathaus Galerie Leverkusen, (Germany) and Le Befane Shopping Centre (Italy), both of which were acquired by Union Investment, for €220 million and €244 million, respectively.

“Investors in shopping centres in Spain believe that the strong macroeconomic outlook will continue to boost household consumption and with that, the valuation of retail assets”, said the Partner in Financial Advisory at Deloitte, Javier García-Mateo.

In terms of the investor profile, García-Mateo explains that this year, “the stage has been shared by Spanish Socimis, which have seen their stake of total investment fall to 16%, to the benefit of international funds, which are looking to build large multi-country platforms”.

The Director of Financial Advisory at Deloitte, Ana Granado, also points out that this year, financing for shopping centres amounting to between €1.2 billion and €1.5 billion has been closed. “The traditional banks are being joined by a select group of alternative providers of capital, which are willing to finance the development of land and projects in the transformation and renovation phase”, she said.

Regarding the supply, currently, the average commercial density of shopping centres in Spain amounts to 285 m2 for every 1,000 inhabitants. By province, Zaragoza (with 638 m2 for every 1,000 inhabitants) and Las Palmas (with 641 m2 for every 1,000 inhabitants) are the Spanish provinces with the highest commercial density. At the other end of the spectrum are Lérida, with 40 m2 for every 1,000 inhabitants and Gerona, with 65 m2 for every 1,000 inhabitants.

Renovation

In terms of the commercial park, José María Espejo, Senior Manager at Deloitte Financial Advisory, indicates that 45% of the current supply of shopping centres is showing signs of significant technical obsolescence. “Any renovation processes will have to go hand in hand with some major capex investment”, he said.

According to Deloitte’s calculations, the amount of investment required to reposition the obsolete assets amounts to around €1.08 billion.

By way of example of some of the shopping centres that have been repositioned in recent years, La Moraleja Green, in Madrid stands out, with an investment of €10 million. That shopping centre, located in Alcobendas and inaugurated in 1995 is owned by Kennedy Wilson, which bought it from ING Real Estate in December 2015 for €71 million. Meanwhile, Unibail Rodamco, has invested €148 million in the repositioning of the Glòries shopping centre in Barcelona and Intu has spent €12 million on improvements at its shopping centre in Asturias.

Omni-channels

In terms of challenges for the future, commercial spaces are going to have to adapt to cater for the new habits of consumers and to make e-commerce an ally.

According to the report, shopping centres are at very preliminary levels of evolution and only the most advanced have online shopping platforms, mobile applications and loyalty programs for their clients.

Specifically, the level of omnichannel use of shopping centres in Spain amounts to 33%. By category, retail outlets achieve the highest degree of omnichannel use, whilst shopping centres bring up the rear in terms of their degree of digitalisation.

Original story: Expansión (by Rebeca Arroyo)

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

Catella: RE Inv’t Rose By 60% During First 8 Months To €7,061M

25 September 2017 – Expansión

The Spanish real estate market is still a magnet for investment at the global level. In this way, during the 8 months to August, investment in tertiary real estate assets (in other words, non-residential properties) rose to €7,061 million. That volume is 62% higher than the figure registered during the same period in 2016, according to data from the consultancy firm Catella (…).

By type of properties, commercial assets accounted for 45% of the total investment, with a volume of more than €3,200 million, up by 52% compared to the first eight months of 2016. In fact, that figure already exceeds the amount recorded for last year as a whole and is very close to the record investment made in 2007, when commercial assets worth more than €3,590 million were sold, according to sources at the consultancy firm.

Of that amount, investment in shopping centres accounted for 60% of total retail investment, amounting to €1,929 million. The figure is explained by the completion of major operations, such as the purchase of Xanadú, in Arroyomolinos (Madrid), on which Intu Properties spent €530 million; and the operation involving Nueva Condomina, in Murcia, which Klépierre purchased for €233 million.

Interest

Large assets were not the only retail assets to spark interest: high-street premises were also on investors’ radars. As such, €711 million was spent on that type of property between January and August, with highlights including operations such as the purchase of Preciados 9, the future flagship Pull & Bear store in the centre of Madrid, by Generali for €98 million. Meanwhile, investors spent another €516 million on retail parks and supermarkets, with the operation involving a portfolio of nine retail parks leading the way – the South African investor Vukile spent €193 million on that purchase.

In the case of offices, investment increased by 46% to reach €1,512 million. “The Boston portfolio – comprising 14 office buildings located in Barcelona, Madrid and Valencia – owned by BBVA and acquired by Oaktree for €180 million has been the most important transaction so far this year. In Madrid, the most significant transaction saw the acquisition of the Manoteras business park by Tristan Capital (€103 million), whilst, in Barcelona, the most high-profile deal has been the purchase of Torre Agbar by Merlin Properties (€142 million”, say sources at Catella.

During the first 8 months of 2017, hotel purchases rose by 25% to reach €1,760 million, thanks to operations such as the one involving Edificio España, for €272 million, as well as the purchase starring the international fund London & Regional (which acquired four hotels located on the coast and islands for €240 million), as well as others involving Starwood and KKR.

Moreover, the logistics sector has not been left behind in terms of the increase in investment. Between January and August, that segment saw investment grow by 31% to reach €575 million. (…). In this area, the most significant operation has been the sale of GreenOak’s portfolio to P3 Logistics Park for €243 million.

Whilst retail assets were the star product by type of property, international funds continued to be the undisputed stars in terms of buyer profile.

Between January and August, funds accounted for 42% of the total volume invested; whilst real estate companies represented 28% of the total (…). Meanwhile, the Socimis, who were the most active investors in 2014 and 2015, have seen their share of the cake decrease to 11% so far this year.

“On the other hand, core investors have returned to the market, with the acquisition of prime properties located in Madrid and Barcelona. Insurance companies, family offices and other institutional investors have purchased assets such as offices and retail premises in Madrid, with yields of around 3%”, said Carlos López, Partner at Catella.

Year-end

“…We expect 2017 to be a record-breaking year, with an investment volume of around €10,000 million, compared to the figures of more than €8,500 million in tertiary investment in 2016”, says López (…).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

CBRE: RE Inv’t Rose By 38% To €6,100M In H1 2017

4 July 2017 – El Confidencial

Investor appetite for the Spanish real estate sector is continuing to rise and our country is getting ready to close yet another historical year in terms of investment volumes. For the time being, the first half of the year has seen record investment figures, with an investment volume of €6,100 million during the six months to June, up by 38% compared to the same period last year, according to data from CBRE.

There are five mega-operations behind this result, which have determined the strong start to the year: the purchase of the Madrid Xanadú shopping centre by Intu Properties, which paid €530 million for the property; the acquisition of the Buffalo portfolio, worth €300 million, by Blackstone; the sale of Edificio España to Riu for €272 million; the sale by GreenOak of the Acero logistics portfolio to GIC for €243.3 million; and the purchase of the Nueva Condomina shopping centre by Klépierre for €233 million.

And all indications are that between now and Christmas, there will be another similar run of operations, an expectation that allows experts to predict that investment will exceed the €10,000 million threshold for the third year in a row.

Some of the operations called to collaborate in the record-breaking figures are on course, such as Hispania’s sale of its office portfolio, for which the Socimi has received half a dozen offers for around €500 million; the sale of Parque Corredor by Sareb; and several portfolios that the banks are bringing onto the market; whilst others are well underway, such as the purchase of nine retail parks and properties that the South African fund Vukile Property has just agreed – it will acquire a portfolio of retail properties from the joint venture between Redevco and Ares for €193 million.

More appetite, lower returns

The main driver of investment during the first half of the year was the retail segment, which accounted for one-third of total investment (€1,900 million), boosted by the recovery in consumption. The other side of the coin corresponded to the residential segment, which saw a decrease of 20% with respect to the first half of last year, whereas the hotel sector continued to benefit from the boom in tourism and accounted for 29% of the total (€1,750 million).

Nevertheless, all of this buyer appetite means that returns are now at minimum levels…and they are still falling. The logistics and hotel sectors are the only markets capable of offering attractive yields, with average returns of 5.85% and 5.75%, respectively, although those numbers fall well below the figures achieved just two years ago (7% and 8%).

Yields on shopping centres have decreased to 4.25%; office returns have fallen to 4%, whilst the profitability of high-street premises barely reaches 3.5%. Despite this narrowing, international funds, which have been backing our country for a while and other new funds, which are just arriving, have Spain at the centre of their targets and are starring in these record figures.

In this way, whilst last year, the Socimis were the undisputable investment leaders, accounting for 43% of the total, this year, they represent just 14%; meanwhile, investment funds account for 34% of the total, with the US, British and French funds leading the ranking of overseas investors.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Klépierre Buys Nueva Condomina Shopping Centre (Murcia)

25 May 2017 – Expansión

Klépierre has strengthened its presence in Spain with the purchase of the Nueva Condomina shopping centre (Murcia), which is worth €233 million, according to a statement issued by the French multi-national.

Specifically, as a result of this acquisition, Nueva Condomina is now the third most important asset in Klépierre’s Spanish portfolio in terms of net rental income.

The property covers a surface area of 110,000 m2, split between the shopping centre (73,000 m2) and the retail park (37,000 m2).

Last year, the Murcian shopping centre received more than 11 million visitors and recorded store sales of €257 million. Tenants include several brands from the Inditex group, as well as Mango and Fnac.

Original story: Expansión

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