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

French fund Klépierre Acquires Plenilunio For €375M

17 March 2015 – Cinco Días

The shopping centre in Madrid, which measures 70,000 square metres, is home to brands such as H&M, Primark and Media Markt.

The active market for the sale and purchase of shopping centres in Spain recorded another milestone yesterday. The French fund Klépierre announced the acquisition of the Plenilunio shopping centre in Madrid, from Orion Capital Managers for €375 million. The transaction had been in the pipeline for months and was expected to close during the first half of the year.

The Plenilunio shopping centre is located in Madrid and measures 70,000 square metres. It is home to brands such as Primark (where the Irish company has its largest store in Spain, although its flagship store on Gran Vía will take over that title when it opens later this year); Inditex, Mercadona, H&M, Mango and Media Markt.

The transaction announced yesterday is the second largest ever involving a shopping centre in Spain. The largest involved the sale of Puerto Venecia in Zaragoza. The investment fund Orion, which was also the vendor of Plenilunio, received €451 million from that sale. Through these two transactions, which have taken place within four months of each other, more than €820 million has changed hands in the sale and purchase of shopping centres. The third largest sale in Spain was also closed in 2014 involving the Marineda City shopping centre in La Coruña, which was sold for €260 million.

Plenilunio is the first large sale to be closed in 2015, after record figures were registered in the shopping centre real estate market in 2014 – total investment amounted to €2,500 million, according to data from the Spanish Shopping Centre Association (‘Asociación Española de Centros y Parques Comerciales’ or AECC). The organisation itself thinks repeating the volume recorded last year again this year will be challenging.

The sector’s trade association also highlighted the importance of contributions from overseas funds to ensuring that investment volumes in Spain are higher than their pre-crisis levels. The French firm that has acquired Pleniluno already has a presence in the country through the La Gavia and Príncipe Pío shopping centres in Madrid; Meridiano in Santa Cruz de Tenerife and Maremagnum in Barcelona.

Turnover of €21 million per year

The French investment group confirmed yesterday in a statement that it expects the Plenilunio shopping centre, which had an occupancy rate of 99.3% at the end of last year, to generate annual revenues of €21 million. Its turnover increased by 15% last year. The fund said it has “plans to differentiate” the property, which (it expects) will result in improved cash flows.

Klépierre reported that it had paid the €375 million consideration using its own funds. The group ended last year with liquidity of €2,700 million. Nevertheless, according to the statement, it does not rule out (the possibility of taking out) a mortgage loan (on the property). The company estimates that it has assets in Spain valued at €1,400 million. PwC advised Klépierre on the transaction and Cushman and Wakefield advised Orion.

The French group confirmed that Plenilunio is a “dominant shopping destination” in Madrid, with more than 10.5 million visitors per year and a catchment area of 1.5 million inhabitants. Its proximity to the centre of the city, its visibility from the main arteries (roads) into and out of the city and its good public transport links are the main attractive features for the company. It said that 14,000 homes are currently being built in the area, which in general has a purchasing power than is 30% higher than the Spanish average and where 33% of the population falls into the highest income bracket.

Original story: Cinco Días (by Diego Larrouy)

Translation: Carmel Drake