8 June 2018 – Eje Prime
The portfolio of shopping centres jointly owned by Sonae Sierra and CBRE Global Investors could be on the verge of having a new owner. The German company ECE is reportedly finalising the purchase of three shopping centres from the two groups for between €450 million and €500 million, according to sources close to the operation speaking to Eje Prime. Sonae Sierra and CBRE GI jointly own these three assets (50% each).
With the purchase of this portfolio, ECE would begin to acquire its first assets in Spain, given that since it carried out the acquisition of Auxideico Gestión in 2010, a company specialising in the management of retail complexes and which previously belonged to ING Real Estate Development, it has not closed any transaction of this kind.
The centres that may be added to the portfolio of the German firm ECE are: Gran Casa en Zaragoza, the largest of the three; Valle Real (Cantabria); and Max Center (Barakaldo, Bizkaia). The two current owners already announced when the sales process was launched that they expected to pocket around €500 million from the sale.
If the operation with ECE goes ahead, it will represent the real estate giant’s first purchase in Spain since its arrival. Eight years ago, the group headquartered in Hamburg and the leader of the European market in urban shopping centres, acquired the Spanish firm Auxideico Gestión, which was, at the time, responsible for the management of fourteen shopping centres.
Until last year and following its acquisition by ECE, the group controlled more than 25 retail complexes in Spain, including Albufera Plaza, Montecarmelo and Moraleja Green in Madrid, Alcalá Magna in Alcalá de Henares and Parc Central in Tarragona. In 2017, Auxideico finally stopped operating in Spain due to “its small business volume”, according to sources in the sector. Across Europe, ECE has more than 195 shopping centres under management.
ECE, a giant with a healthy investor appetite
Founded in 1965 by Werner Otto, ECE now has more than half a century of experience in the sector under its belt. The family-owned company develops, plans, builds, leases and manages shopping centres and invests in real estate projects.
With a retail surface area of 7.2 million m2 and around 21,000 retail operators, the shopping centres managed by ECE generate annual sales of more than €23 billion and have a market value of €30 billion. Moreover, ECE has a stock of shopping centres under construction and being planned, with an investment volume of €3.2 billion.
ECE, in addition to specialising in the management of shopping centres, also operates in the real estate sector with other types of assets. The company owns a portfolio of logistics assets spanning 913,000 m2 and office buildings measuring 1 million m2.
Shopping centres, a good business in Spain
The fact that a group such as ECE is showing interest again in this business in Spain is due to the good outlook that the studies predict for the sector. Spanish people both visited and spent more in shopping centres in 2017, and the turnover in this types of assets increased 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 household, leisure and restaurant segments, with increases of 5%, 3,7% and 2,7%, respectively, according to a report from Cushman&Wakefield (…).
Shopping centres will continue to be the most sought-after assets by investors, primarily international funds. The Spanish retail market closed 2017 with 555 active shopping centres and a stock spanning 15.8 million m2, according to the Spanish Association of Shopping Centres (AECC).
Original story: Eje Prime (by C. Pareja)
Translation: Carmel Drake