Deutsche Bank Acquires L’Aljub Shopping Centre in Elche for €170M

8 May 2018 – Expansión

Deutsche Bank is increasing its commitment to the Spanish retail sector by adding the L’Aljub shopping centre in Elche to its portfolio of assets in Spain.

Specifically, the German bank has signed an agreement with 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, for €170 million.

The operation has been advised by the consultancy firm Cushman & Wakefield, which has worked with the vendor, whilst CBRE has advised on the buy side.

With this acquisition, the entity is strengthening its position in the commercial sector in the country. In August 2016, Deutsche Bank purchased the Diagonal Mar shopping centre from Northwood for €495 million. That operation was the second largest transaction ever closed in the shopping centre sector in Spain, after the purchase of Xanadú.

Moreover, Trajano – the Socimi managed by Deutsche Bank – purchased the Alcalá Magna shopping centre from Incus Capital for just over €100 million at the beginning of last year. In addition, the firm also owns the Salera shopping centre in Castellón de la Plana.

The L’Aljub shopping centre was inaugurated in 2003 and spans more than 60,000 m2, spread over two floors and with a large underground car park.

Besides the commercial and leisure offering, L’Aljub is home to an Eroski hypermarket on the ground floor.

Specifically, the shopping centre contains 120 shops and has 3,200 parking spaces. Its most high-profile tenants include Inditex, H&M, Primark, Mango and Cines ABC.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Deutsche Bank Negotiates Sale Of Gran Vía Alicante

30 April 2017 – Expansión

The real estate market for shopping centres is unrelenting. In the latest deal, Deutsche Bank has hung the “for sale” sign up over Gran Vía Alicante. The German entity’s real estate division, RREEF, which has engaged the real estate consultancy firm JLL to sell this shopping centre, has already received several offers for the asset.

Whilst the operation has not been closed yet, one of the players lining itself up as a candidate to take over the shopping centre is the British fund Europa Capital.

Moreover, one of the other investors interested in the asset is a consortium formed by Eurofund Capital Partners and Patron Capital and Carmila, the real estate subsidiary owned by Carrefour, according to market sources, which value the asset at just over €50 million.

The centre has a retail surface area of 37,300 m2, however, that figure includes a hypermarket owned by Carrefour, measuring 17,050 m2, which falls outside of the perimeter of this transaction.

Specifically, the retail space for sale, which has a gross leasable area of more than 20,200 m2, contains around 80 stores distributed over three floors, as well as an underground car park with 1,600 spaces.

Tenants

The shopping centre, inaugurated in November 1998 and renovated in 2012, received almost 5.3 million visitors last year and has an occupancy rate of 95% of its gross leasable area.

The shopping centre’s main tenants include brands such as Primark, H&M, Lefties, Massimo Dutti, Pull & Bear, Juguettos, Calzedonia, Natura and Fosters Hollywood, amongst others.

Gran Vía de Alicante, located on Calle José García Sellés, competes with Plaza Mar 2, the largest shopping centre in the town, spanning 43,600 m2.

In addition, other nearby shopping centres include Parque Vistahermosa, measuring 34,000 m2, San Vicente Outlet Park, measuring 36,500 m2 and Puerta de Alicante, measuring 34,500 m2.

Investment

Shopping centres are one of the real estate assets that have sparked the most interest amongst investors in recent years.

In 2016 alone, more than €3,700 million was invested in this segment, which constituted the second largest market in the real estate sector after the office segment.

The main operations closed last year included the sale of Diagonal Mar (Barcelona), which was acquired by Deutsche Bank from Northwood in August for €495 million, and the sale of Gran Vía de Vigo, which the Socimi Lar España acquired from Oaktree for €145 million.

So far in 2017, another mega-operation has been closed with the British fund Intu’s acquiring the Xanadú shopping centre (Arroyomolinos, Madrid) for €530 million from Ivanhoé Cambridge.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

JLL: RE Inv’t Amounted To €8,757M In 2016

13 January 2017 – Expansión

Between January and December, investors spent €8,757 million buying tertiary assets, according to data from the real estate consultancy JLL. This figure is the second highest in the last decade, and is €650 million below the volume of sales and purchases recorded in 2015. That was the year when the invasion of international funds into Spain and the consolidation of the Socimis took the real estate market to figures never seen before, with a volume of investment upwards of €9,400 million.

But, unlike the previous year, 2016 saw the rise of commercial assets (primarily, shopping centres and high street premises) to lead the ranking in terms of real estate investment by segment, accounting for almost €3,000 million (€2,977 million, according to JLL) compared to €2,806 million spent on offices.

Two operations, the purchase of Torre Foster by Amancio Ortega, for €490 million and Merlin’s acquisition of Parque Adequa for €380 million, boosted the investment figure in the office segment, which, although hasn’t completely lost its appeal for buyers, has been relegated to second place due to a shortage of available prime space. (…).

Funds are selling off assets

The opposite is happening in the case of large commercial establishments. International funds’ interest in selling the properties that they bought during the crisis led to a boom in major operations last year, including the sale of the Diagonal Mar shopping centre by Northwood, which was acquired by one of Deutsche Bank’s real estate funds for €493 million; and the sale of Gran Vía de Vigo, for which the Socimi Lar España paid the fund Oaktree €145 million. (…).

In the case of hotels, despite significant one-off sales, such as the operation involving Hotel Villamagna, which was acquired by the Turkish group Dogus for €180 million, overall the investment volume fell from €2,739 million in 2015 to €2,155 million last year. Even so, the figure for 2016 exceeds the investment volume recorded in 2006, which previously held the record, when hotel sales amounted to €1,600 million (out of a total non-residential investment volume of €8,482 million).

Although commercial properties led the ranking as the preferred asset for investors, logistics assets also performed very well. Between January and December, €819 million was invested in logistics warehouses, platforms and centres, according to JLL. This figure practically doubles the purchases completed in 2015, when investors disbursed €434 million on these types of properties, according to the consultancy.

The key behind this success is due to the fact that logistics assets still offer high returns, compared with other properties, such as offices and shopping centres, which have lost some of their investment appeal, due to the high degree of interest in these assets in Spain.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Deloitte: 29 Shopping Centres Worth €1,531M Are Up For Sale

13 December 2016 – Expansión

Between January and October, investors spent €3,028 million buying shopping centres in Spain. That is a historical figure, which pulverises the volume registered in previous years. For example: in 2015, a record year in terms of real estate investment, investors spent 60% less on shopping centres than they did during the first ten months of 2016.

And this strong performance in the retail investment market looks set to continue, given that 29 more properties, with a combined value of €1,531 million, are expected to be sold during the final stretch of the year, according to Deloitte. (…) Of those, four have already changed hands, specifically, the outlet centres located in San Sebastián de los Reyes, Las Rozas and Getafe, which the joint venture owned by Nienver and Tiaa purchased on 23 November, as part of a wider European portfolio that also included three other centres in Italy and Poland, worth €700 million in total. Moreover, the same partnership completed the acquisition of the Nassica shopping centre in Getafe on the same day.

And these are not the only shopping centres that will be changing hands over the next few months, given that other new assets are expected to come onto the market next year, including the Madrid Xanadú shopping centre in Arroyomolinos.

In total, forecasts indicate that transactions amounting to almost €2,000 million (specifically, €1,932 million) will be closed in 2017, with another €604 million worth of shopping centres expected to be sold in 2018, according to sources at the professional services firm.

Gains

Most of the shopping centres that will have new owners over the next 18 months belong to overseas funds that bought these assets before the recovery of the sector, and which now have the opportunity to unwind their investments with significant gains just a few years after they bought them. “The decrease in the risk premium and the recovery in consumption are some of the reasons behind the 16% appreciation in this type of asset over the last 12 months”, said Javier García-Mateo, Financial Advisory Partner at Deloitte.

In fact, we have already seen operations of this kind in 2016, such as the sale of the Gran Vía de Vigo shopping centre, which the fund Oaktree sold in the summer to the Socimi Lar España for €145 million. The US fund had acquired the centre two years earlier for €115 million. (…). Meanwhile, Northwood sold Diagonal Mar for €495 million after buying it two years ago for around €150 million.

“Above all, the buyers of the shopping centres that will come up for sale in the short term will be core and core plus funds, which will take over from the more opportunist (distress) investors, which made their purchases during the previous period”, said García-Mateo. In this way, transactions amounting to €4,067 million are expected to be closed over the next two years; more than €1,200 million will be invested by institutional funds, insurance companies, and more risk-averse investors, followed by core plus investors, which will account for almost 40% of the total investment volume, compared with €108 million that opportunist funds are expected to invest in shopping centres, according to Deloitte.

Financing

Along with the improvement in the Spanish economy, another question that will help this investment volume will be the better access to financing for this kind of operation.

In this sense, more than 55% of the €4,067 million that is expected to be invested in shopping centres between now and 2018 will benefit from financing, for more than 50% of the total asset value, compared with 16% that will not be financed by any kind of loan.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Deloitte Is The Leading Advisor Of Shopping Centre Deals

20 October 2016 – Expansión

The Big Four are positioning themselves as major players in the market to advise real estate operations and are gaining ground in a segment that has been dominated by other players until now. The professional services firms are looking for new business niches in order to generate returns and strengthen their audit businesses, which generate significant recurring income for their balance sheets, but which are now mature markets, with limited margin for growth.

This effort has led the Big Four to dominate the transaction advisory sector and, in the case of Deloitte, it has managed to gain a foothold in the market that has been particularly dominated by real estate consultancy firms until now: the shopping centre segment.

Specifically, the company chaired by Fernando Ruiz now leads the ranking after participating in almost half of the major operations closed in 2016 to date. So far this year, transactions amounting to almost €2,000 million have been signed in the shopping centre segment, which has become one of the star products of the real state market, boosted by the economic recovery and improvement in consumption.

In this growing market, which still has further potential for growth, Deloitte has earned its place as an advisor of choice. Specifically, the professional services firm achieved a market share of more than 50% of the transaction volume, outperforming CBRE, with 32%, PwC, with 7% and JLL and Savills, with 4% each.

Deloitte participated alongside CBRE in the largest operation of the year so far in the shopping centre segment: Diagonal Mar (Barcelona). The asset was acquired by Deustche Bank from Northwood over the summer for almost €500 million. Deloitte advised the buyer whilst CBRE advised the seller.

The professional services firm has also advised Carrefour on its purchase of 36 supermarkets from Eroski for €205 million and TPG’s acquisition of the L’Aljub shopping centre in Elche (Alicante) for €100 million. Another major operation closed this year in this segment involved the Gran Via de Vigo shopping centre, which was acquired by Lar España in a deal advised by another Big Four firm, PwC.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Deutsche Bank Buys Diagonal Mar For €493M

10 August 2016 – Expansión

Deutsche Asset Management’s real estate investment division for Iberia, a subsidiary of Deutsche Bank, has confirmed its purchase of the Diagonal Mar shopping centre in Barcelona for €493 million.

Although the final price has been adjusted downwards with respect to the non-binding offer presented by the entity (which valued the asset at €505 million), it still exceeds the €451 million that Intu Properties paid for Puerto Venecia (Zaragoza) and the €375 million that Klépierre spent on the acquisition of Plenilunio (Madrid).

The operation also generates significant capital gains for Northwood, which acquired the property from the Irish bad bank Nama for €150 million in 2015. CBRE has advised this operation on the sell-side, whilst Deloitte advised the buy-side. (…).

Original story: Expansión

Translation: Carmel Drake

Deutsche Bank Buys Diagonal Mar For €495M

2 August 2016 – Expansión

Yesterday, Deutsche Bank completed the purchase of the Diagonal Mar shopping centre from Northwood for around €495 million, making it the largest shopping centre transaction in the history of the Spanish market.

In this way, although the final price has been adjusted downwards with respect to the non-binding offer presented by the entity (which valued the asset at €505 million), it still exceeds the €451 million that Intu Properties paid for Puerto Venecia (Zaragoza) and the €375 million that Klépierre spent on the acquisition of Plenilunio (Madrid).

The operation also generates significant capital gains for Northwood, which acquired the property from the Irish bad bank Nama for €150 million in 2015. CBRE has advised this operation on the sell-side, whilst Deloitte advised the buy-side.

Background

The shopping centre, located in district 22@ in Barcelona, has passed through many hands since the real estate company Hines was awarded the mixed use project at the end of the 1990s. The project included a residential area, offices, hotels and a large shopping centre, with a constructed surface area of 100,500 sqm and a gross leasable area (GLA) of 87,000 sqm, as well as 5,000 parking spaces.

In 2002, the German investment fund Deka paid around €240 million for the property, which, was subsequently sold, in 2006, to the Irish investment group Quinlan for €300 million, in its first operation in Spain. Nevertheless, following the burst of the Irish bubble, the asset was taken over by the banks.

Three years after that operation and in a very different economic environment, the property has generated a lot of interest. Specifically, 18 candidates submitted non-binding offers for the property, including Axa, Invesco, Hines, Unibail, the Singapore sovereign fund GIC, Blackstone and the Socimi Merlin, which was the only Spanish company that submitted an offer, for less than €450 million. Only four candidates participated in the final phase: CBRE Global Investment, ECE, Henderson TH and Deutsche Bank.

In order to reposition the asset, Deutsche Bank plans to invest €30 million over four years in a project that includes restructuring the top floor of the shopping centre to create more space for high-end fashion brands (€15 million), refurbishing the other floors with a budget of around €8 million and renovating the centre’s exterior façade for almost €7 million.

With this renovation, the purchaser expects to strengthen Diagonal Mar’s competitive position and increase its gross operating profit (EBITDA) over five years from €20 million in 2015 to more than €26 million.

Impact

The shopping centre, opened in November 2001, was designed by Jean-Louis Solal and the architect Robert A.M. Stern. Diagonal Mar is located in a prime spot, approximately five kilometres north east of the city centre. With more than 200 outlets dedicated to fashion, restaurants, leisure, a bowling alley and other services, the centre has 4,800 parking spaces and an outdoor space: La Terrassa del Mar. Diagonal Mar received 16.7 million visitors last year, up by 2.3% and generated net sales – excluding Alcampo (which falls outside of the transaction perimeter) – of €210 million, up by 8.5%. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Incus Capital Puts 3 Shopping Centres Up For Sale

6 July 2016 – El Confidencial

The retail market is on a roll. Whilst a few weeks ago, it was revealed that the British fund Northwood is looking for a buyer for Diagonal Mar, the second largest shopping centre in Cataluña; now, another investor, Incus Capital, wants to unwind some of its positions and raise funds through the sale of three commercial assets, which it purchased three years ago from Morgan Stanley for €30 million.

The assets for sale, which have been baptised as “the good”, “the bad”, and “the ugly” are: El Mirador de Cuenca (Cuenca), Los Alcores (Alcalá de Guadaíra-Sevilla) and Alzamora (Alcoy-Alicante). Morgan Stanley and Grupo Lar purchased these three centres in 2007 for €116 million just before the real estate bubble burst, and sold them to Incus Capital six years later, at a loss of €80 million.

According to several market sources, these three assets are back on the market once again, although no offers have been received yet, since the sales process is still in its preliminary phase. The sources consulted state that Incus will successfully close the operation before the end of the year with significant profits, in other words, for more than €30 million. CBRE is advising Incus Capital on the sale, but neither of the companies wanted to make any comments about it.

The three assets are on the market together once again. “Investors buzzing over Spain are looking for reasonably-sized transactions, and so it makes more sense to sell these assets together than separately. Investors prefer to make one purchase amounting to €30 million, than three amounting to €10 million each”, said one expert in the sector, who explained that, although these are not prime assets, given that they are located in smaller cities, they are dominant in their respective regions and do not face any competition, which makes them very attractive. In addition, Incus has carried out a very active management (of the assets), which means that they now have higher occupancy rates and are in a better condition than three years ago”.

The shopping centre segment has been particularly dynamic in the last two years and, according to experts in the real estate market, total investment in 2016 may exceed the figures recorded in 2015 (€2,000 million). During the first quarter of this year alone, retail investment amounted to between €750 million and €800 million, with several high profile transactions, including the purchase of the Festival Park shopping centre in Mallorca for €100 million and the fund Invesco’s purchase of a portfolio of Eroski supermarkets for just over €350 million.

Incus Capital was created in 2013 and these three shopping centres became its first portfolio of assets in the Spanish market. The firm was created by Andrew Newton (ex-Lehman Brothers) and Alejandro Moya (ex-Morgan Stanley).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

TH Real Estate Offers €450M For Diagonal Mar

14 June 2016 – Expansión

The owner of the shopping centre Diagonal Mar, the British fund Northwood, has received a binding offer amounting to €450 million from TH Real Estate. This amount almost triples the €160 million that Northwood paid for the Barcelona-based shopping centre in 2013.

It is not the only offer that has been presented, given that TH Real Estate’s proposal was accompanied by two others from funds whose name has not been revealed. The sale of the asset is being brokered by the consultancy firm CBRE, which has declined to comment on the deal, along with TH Real Estate.

Diagonal Mar is the largest shopping centre in Cataluña, with a surface area of 87,500 sqm. Nevertheless, not all of the property is up for sale, given that 27,000 sqm are owned by Alcampo (which will hold onto its space).

Northwood acquired the centre at the worst time of the crisis, in 2013, from the Irish bad bank, which means that it could end up generating capital gains of €290 million in less than three years.

The investor

TH Real Estate is owned by the financial services provider TIAA. The origin of the company dates back to the London-based real estate manager, Henderson Real Estate, which was absorbed by the US group TIAA in 2014 to create TH Real Estate, which is also headquartered in the USA.

TH Real Estate manages real estate assets all over the world, covering 26,800 sqm, for around 50 investment funds and other operating mandates.

As well as TIAA’s assets in the USA, this platform integrates properties worth €83,900 million in total, which makes it one of the largest property managers in the world.

In Spain, TH Real Estate owns several shopping centres, including Islazul, in Madrid, measuring 90,000 sqm; Nervión in Sevilla, measuring 25,000 sqm; and Bulevar Getafe in Madrid, measuring 27,150 sqm. It also owns an industrial park in Alovera (Guadalajara) measuring 42,000 sqm.

The company has been present in Spain since 2007 and its Madrilenian headquarters is headed up by Manuel Martín. In recent years, as well as investments in operating assets, TH Real Estate has also undertaken co-investment projects, such as in the case of the Viladecans outlet (in Barcelona), where it joined forces with Neinver.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Northwood Puts Diagonal Mar Shopping Centre Up For Sale For €500M

9 May 2016 – Expansión

The US investment firm Northwood has put the Diagonal Mar shopping centre in Barcelona up for sale, for an estimated price of €500 million, according to sources close to the deal.

CBRE, the agency responsible for the management and leasing of the shopping centre since it was opened in 2001, has been appointed to manage the sale. Sources at the real estate consultancy declined to make any comment. The investment firm bought the shopping centre in May 2014 from a group of investors represented by Avestus Capital Partners, however that retained the asset management of the property.

Diagonal Mar – one of the largest shopping centres in Cataluña – covers a surface area of almost 88,000 sqm, including 27,100 sqm owned by Alcampo.

Opened in November 2001, the centre was designed by Jean-Louis Solal and the architect Robert A.M. Stern. Diagonal Mar is located in a prime position, situated approximately five kilometres to the north west of the city centre, in the 22@ district.

This centre has more than 200 stores dedicated to fashion, restaurants, leisure, a bowling alley and other services, as well as 4,800 parking spaces, provided free of charge for three hours.

Moreover, the shopping centre has an open air leisure and restaurant area, “La Terrassa del Mar”, which is open to customers, neighbours, employees from the office towers and tourists from nearby hotels in the area.

More than 3,000 jobs

Diagonal Mar received 16.7 million visitors last year, which represented an increase of 2.3% with respect to the previous year, and resulted in a 9% increase in sales during the period.

The centre owned by Northwood employs more than 3,000 people. The centre’s current tenants include Media Markt, Fnac, Primark, Zara, H&M and Cinesa, amongst others.
In addition, brands such as Revlon, Napapijri and the toy store Drim have opened shops in the centre within the last year.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake