Marathon Finalises Purchase Of 8 Shopping Centres In Spain & Italy

6 June 2017 – Expansión

The US fund Marathon Asset Management is negotiating the purchase of a new European portfolio to incorporate into its list of real estate investments. The company, one of the star shareholders of the Spanish property developer Vía Célere, together with Värde, is finalising the purchase of a portfolio, known as Bronze, comprising eight shopping centres located in several towns in Spain (2) and Italy (6).

These centres were acquired by the Pradera European Retail Fund between the end of 2006 and the middle of 2009 and their current market value amounts to €326 million. Six of the retail establishments are located in Italy. The largest, Domus Shopping Centre, has a gross leasable area (GLA) of 26,795 m2 and is located in Rome. Moreover, another is located in Formia, measuring 23,422 m2, called Itaca, and the Prato Sardo Shopping Centre, measuring 15,724 m2, is located in Nuoro, on the island of Sardinia. Three of these shopping centres are fully occupied, whilst the occupancy level of the property in Rome is 77%.

Spain

In the case of the Spanish component, Pradera is selling the La Marina shopping centre, located in Benidorm; and the Llobregat centre, located in Barcelona. La Marina covers a retail surface area of 35,599 m2 and its occupancy level stands at around 94%. Meanwhile, the Llobregat centre is smaller, with a GLA of 14,160 m2, and its occupancy rate amounts to around 66%.

The value of the Spanish establishments amounts to around €95 million. La Marina was one of the first properties to be purchased by Pradera’s retail fund, which spent €525 million on nine operations in Spain and Portugal in December 2006.

In fact, initially, Pradero included a Spanish third shopping centre in the sales process: the Travesía de Vigo centre. Acquired in 2007 for €40 million, this property, with a GLA of almost 10,000 m2, is currently worth €26 million. Although Pradera initially planned to sell, in the end, it has decided to exclude it from the batch for sale, explained sources close to the process.

Marathon already owns one shopping centre in Spain, given that at the beginning of last year, it acquired Bahía Azul in Málaga for €18.5 million.

Record investment

The operation by the US fund reflects the interest from real estate investors in shopping centres, after investment figures reached record levels in the last two years.

In 2016, investment in shopping centres amounted to €3,500 million, up by 59% compared to a year earlier. During the first three months of 2017, investment in commercial assets reached €1,365 million, which represented a significant proportion of the total investment in non-residential real estate (€2,326 million). Of that figure, several operations stand out, such as Intu Properties’ purchase of the Xanadú shopping centre, in Arroyomolinos (Madrid), for €530 million.

Recent purchases by international investors include the operation closed by the British management company Schroders, which spent €52.5 million on the acquisition of the Metromar shopping centre, in Sevilla.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Schroders Buys The Metromar Shopping Centre For €52.5M

25 May 2017 – Expansión

Schroder European Real Estate Trust has announced its first investment in Spain, after signing an agreement to acquire the Metromar shopping centre in Sevilla from UBS Asset Management.

The transaction price amounted to €52.5 million, which implies a future annual return of 6.2%, according to Schroders, based on the rental income generated by the property. The shopping centre’s tenants include Mercadona, Zara, Mango, Cortefiel and H&M. In total, Metromar’s rental income amounts to €4 million per year.

In terms of the structure of the deal, Schroder’s fund has directly acquired a 50% stake and has purchased the other 50% through Inmobilien Europa Direkt, a Swiss investor who is advised by the British manager.

UBS put the Metromar centre up for sale last year after acquiring it for €100 million in 2007, just before the outbreak of the real estate crisis.

According to the new owners of the shopping centre, which has a surface area of 23,500 m2, “Sevilla is expected to exceed the national average in terms of economic and consumer growth over the next five years”.

The operation has been partially financed using a loan amounting to €23.4 million.

This is the ninth acquisition by this Schroders real estate fund. Until now, the fund has focused its operations in France and Germany. Since its launch in 2015, the fund has made investments of €212 million.

“Commerce may be a key beneficiary of the economic recovery in Spain, which means that this acquisition represents a welcome addition to the portfolio, offering significant diversification for investors, as well as increasing our dividend yield”, said Tony Smedley, manager at Schroder European Real Estate Trust.

In recent months, overseas firms have been accelerating their purchases of shopping centres in Spain. For example, the British property developer Intu acquired Xanadú in Madrid; and yesterday, the French firm Klépierre announced its purchase of the Nueva Condomina shopping centre in Murcia for €233 million.

Retail Partners, EY and Gleeds have advised the British manager in its acquisition of Metromar. UBS has been advised by Cushman & Wakefield, Novasa and Ashurst

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake