El Corte Inglés Puts a RE Portfolio Worth Between €1.5bn & €2bn Up For Sale

21 December 2018 – Expansión

El Corte Inglés is preparing to shatter the real estate market. The distribution giant has engaged PwC to sell a mega-portfolio containing 130 properties with a valuation of between €1.5 billion and €2 billion, which would represent the largest divestment undertaken by the company to date.

The operation includes a large variety of assets, all of which are non-strategic, and includes shopping centres (not large department stores), logistics warehouses, supermarkets, offices and land. Once the period for receiving offers has closed and depending on the offers themselves, El Corte Inglés will reserve the right to reduce the size of the portfolio. According to market sources, the firm’s intention is not to find a single buyer but rather to slice up the assets into packages.

Real estate portfolio

The company chaired by Jesús Nuño de la Rosa is whereby accelerating the divestment plan launched to reduce debt with a view to obtaining an investment grade rating from the ratings agencies over the medium term.

El Corte Inglés is one of the main owners of real estate assets in Spain, with a portfolio worth more than €17 billion, larger even than those owned by the large Spanish Socimis, Merlin and Colonial, whose asset portfolios were worth €12.2 billion and €11.2 billion, respectively, as at June, and those of the large real estate companies such as Amancio Ortega’s Pontegadea, whose assets were worth €8.8 billion at the end of 2017.

With this large exposure to property, El Corte Inglés is taking advantage of the investor appetite in the market for real estate assets to clean up its balance sheet. Last year, real estate investment reached a new record with transactions worth €18.7 billion, including corporate operations, which represented an increase of 46%. Excluding purchases by companies, the investment figure also reached a historical maximum of €10.8 billion, according to data from CBRE.

In the framework of this plan, this summer, the company sold its centres in Parquesur and La Vaguada, both in Madrid to Unibail Rodamco, the largest operator of shopping centres in Europe. Those assets have a surface area of 20,000 m2 each and were sold for €160 million.

Original story: Expansión (by R. Arroyo & V. Osorio)

Translation: Carmel Drake

El Corte Inglés Closes its Biggest Sale of Buildings To Date for €160M

18 December 2018 – Iberian Property

To continue its policy of reducing debt through the sale of real estate assets, El Corte Inglés has closed its biggest sale of buildings so far, receiving €160 million for its centres in Parquesur and La Vaguada, both in Madrid.

Although the group will continue to operate in these commercial centres on a tenant basis, the properties will now be owned by Unibail-Rodamco-Westfield (URW). Thus, it is also selling the stores that it had in the interior, where URW already was co-owner. The Parquesur store measures 20,000 m2 and the La Vaguada store spans 20,200 m2, as reported by Cinco Días based on data from ‘La Asociación Española de Centros y Parques Comerciales’ (the Spanish Association for Shopping Centres and Retail Parks).

Through this transaction, El Corte Inglés is continuing its strategy of divesting non-strategic real estate assets. Thus, in 2018, it has carried out several sales, specifically, it sold two assets in Madrid to the Inbest Socimi in the summer for €100 million and another two assets in Valencia in October for about €90 million.

The value of the URW’s properties in Spain, not including this latest transaction, amounts to €3,823 million.

Original story: Iberian Property (by Jaqueline Cardoso)

Edited by: Carmel Drake

Redevco & Ares Purchase 70% of Parque Corredor Shopping Centre

2 February 2018 – Expansión

Yesterday, after more than a year and a half of negotiations, Redevco Iberian Ventures – the joint venture formed by Redevco and Ares – closed the purchase of 70% of Parque Corredor (located in Torrejón de Ardoz, Madrid) for €140 million. The new owners are preparing to give the asset a makeover, with an additional investment of €40 million, which will be used primarily to renovate the asset. Until now, Parque Corredor had a very fragmented ownership structure (…) and although the asset has an occupancy rate of 95% and receives more than 10 million visitors per year, investment is required for its repositioning.

With the completion of this operation, which has been advised by Deloitte, Cushman & Wakefield and Simmons & Simmons, Redevco Iberian Ventures has acquired the 40% stake held by Sareb – the largest shareholder until now -; the 14.5% stake held by Aermont (previously Perella Winberg); the 3.6% stake held by El Corte Inglés; and the 3% stake held by Bowling, as well as almost 10% held by smaller shareholders. On the other hand, Alcampo will retain its 24% stake in Parque Corredor, as will the Town Hall of Torrejón de Ardoz, which owns a municipal court there, and Toys R’ Us.

Parque Corredor is the third largest shopping centre in the Community of Madrid, behind Xanadú and Parquesur, and one of the largest in Spain, with a surface area of 123,000 m2 and 3,800 parking spaces. In the past, the centre was controlled by CatalunyaCaixa, which foreclosed a loan that had been granted to Testa. That stake was subsequently passed onto Sareb.

The new owners plan to reposition the shopping centre, which opened its doors in 1996. Redevco and Ares plan to spend €40 million on the complete renovation of the asset, which will be undertaken in stages and will not result in the temporary closure of the shopping centre. The remodelling plan, approved in July last year by the community of owners of the centre, is supported by the tenants.

Renovation

The proposed renovation will involve increasing the size of the stores so that some of its main tenants can open flagship stores there and making the leisure area more attractive to increase the number of visitors. The renovation work may take between 12 and 18 months. Parque Corredor is home to 180 establishments, an Alcampo supermarket measuring 24,000 m2 and nine cinema screens managed by Cinesa. Currently, the fashion and accessories section accounts for 24% of the shopping centre, with tenants such as Primark, H&M, El Corte Inglés, Sfera and Mango, amongst other brands. Next comes the Alcampo hypermarket (24%), the restaurant area (14%), leisure (10%), services (9%) and food, perfume and cosmetics (9%).

Competition

Inside Parque Corredor’s area of influence, the French firm Compañía de Phalsbourg plans to open the Open Sky shopping centre, measuring 85,000 m2. The construction work on that centre started in October last year.

Redevco Iberian Ventures, created in September 2015, acquired the Mercado de San Miguel in Madrid last summer for €70 million. In addition, last year, the joint venture company sold a portfolio of nine shopping centres to Vukile Property Fund, a company listed on the Johannesburg Stock Market (South Africa) through its Socimi Castellana Property for €193 million.

The company owned by Redevco and Ares has funds amounting to €500 million allocated for identifying and acquiring assets.

Original story: Expansión (by Rebeca Arroyo)

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

ECI Prepares To Sell Its 2 Stores In Parquesur (Madrid)

13 July 2017 – Voz Pópuli

El Corte Inglés is preparing to sell its stores in the Parquesur shopping centre, in Leganés (Madrid), according to financial sources consulted by this newspaper, under the framework of its asset sale policy to reduce debt. The group chaired by Dimas Gimeno occupies two spaces in Parquesur – which is owned by Unibail Rodamco – one for fashion and accessories, and the other for sports and leisure goods and the supermarket. El Corte Inglés assured this newspaper that no operations are currently active and that, in any case, it has remained as the tenant of other real estate assets despite divesting them.

According to real estate sources, the retail leader in Spain plans to sell various assets worth up to €150 million. Its portfolio of assets for sale includes not only the stores in Parquesur, but also others located in Burgos, Valencia and Madrid.

Leading this process is a stalwart of the Spanish company, Carlos Muñóz Gordobil, whom the sources consulted define as “a tough nut” and “old school operator”. The real estate sources argue that the prices that El Corte Inglés is asking for these buildings, which it considers to be non-essential, are too high.

The same sources indicate that El Corte Inglés’ real estate business is still weighed down by the purchase it agreed in 2014 to buy a plot on Paseo de la Castellana, adjacent to the centre that the group has in the area, which Adif sold through an auction. According to these sources, who are experts in the real estate sector, the figure paid by El Corte Inglés, €136 million, was “over the top”, as it exceeded the second highest offer submitted by more than €40 million. According to El Corte Inglés, the purpose of that purchase was to create its largest shopping centre in Spain, exceeding the one located in El Bercial (Getafe), which has a surface area of 180,000 m2.

In 2015, El Corte Inglés recorded profits of €158.13 million, up by 33.9% compared to the previous year and its turnover grew by 4.3%, to reach €15,219.84 million. Although the company has improved its revenues and has significantly decreased its debt, it still has to make some changes to facilitate negotiations with its creditor banks and secure better financing conditions, explained the financial sources consulted.

Four years ago, the retail group held debt amounting to €5,000 million, which put its business model in danger, and which essentially force it into a restructuring process in 2013. The sale of 10% of its capital to a sheik in Qatar, agreed in 2015, for €1,000 million; the sale of 51% of its financing arm to Santander in 2013; and the issue of promissory notes amounting to €300 million at the end of 2015, and of bonds through Hipercor, are just some of the measures taken by El Corte Inglés to reduce its debt to below €4,000 million.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Ivanhoé Puts Madrid’s Xanadú Shopping Centre Up For Sale

14 September 2016 – Cinco Días

It is going to be one of the largest operations in the real estate market. The Canadian giant Ivanhoé Cambridge has begun the process to prepare the sale of the Xanadú de Arroyomolinos shopping centre (in Madrid), one of the largest five shopping centres in Spain. The aim is to close the transaction during the first half of 2017.

Several real estate brokers have already registered their interest and, in turn, have started to sound out potential investors with high purchasing power, given that it is expected that the operation price will exceed €500 million; that would represent a record figure for a transaction involving a shopping centre in Spain.

Madrid Xanadú was inaugurated in 2003. The property was developed by a joint venture between the US multi-national The Mills and the Spanish company PGC (Parcelatoria Gonzalo Chacón), which sold its stake to its American partner a year later. The real estate company Ivanhoé Cambridge acquired the centre in 2007 for €770 million, in an operation that included two other retail complexes in the UK and Canada.

Located 29 km away from the centre of Madrid, Xanadú was an innovation more than a decade ago as it included an artificial ski slope, open all year round. The centre has a gross leasable and leisure area measuring 152,000 sqm, exceeded only by Puerto Venecia (Zaragoza), Marineda City (A Coruña) and Parquesur (in Leganés, Madrid), according to data from the Spanish Association of Shopping Centres and Retail Parks (AECC). The centre is home to range of stores including the Inditex group, H&M, Apple and Primark. Hipercor and El Corte Inglés also have shops there, although those assets would fall outside of this transaction.

The search for investors

Various source in the sector have confirmed that Ivanhoé Cambridge has commissioned the US real estate broker Eastdil Secured to start designing the sales process. It is likely that the firm will look for a partner with a presence in Spain (one of the large specialist consultancy firms) with more knowledge of the local market. The aim is that the process to look for possible buyers will begin between October and November so that an agreement can be reached from the beginning of next year onwards.

Eastdil Secured was in fact responsible for selling the Diagonal Mar shopping centre in Barcelona this summer to Deutsche Bank for €493 million, in a record deal that demonstrated investors’ confidence in the economic recovery in Spain and in the local real estate sector after the harsh years of the crisis, which began in 2008.

Expected to fetch at least €450 million

The various sources disagree with respect to the possible price of this asset, saying that it could range from €450 million to more than €500 million. In its favour, this shopping centre is one of the largest in the country, it houses many of the major retailers, and it also offers a vast leisure space. But, unlike Diagonal Mar, it is a long way from the city centre. Meanwhile, a spokesman for Ivanhoé Cambridge explained that the firm does not comment on “market speculation” about the investment strategy.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

GreenOak Buys ‘Sevilla Factory’ Shopping Centre For €15M

10 July 2015 – Expansión

The French-Dutch group Unibail Rodamco, one of the largest shopping centre owners in Europe, has closed the sale of one of its assets in Spain: the Sevilla Factory.

According to the Spanish Association of Shopping Centres, the property, which opened in the year 2000, has a constructed surface area of 20,000 m2, of which almost 16,000 m2 comprises retail space, and is spread across one floor. In addition, the shopping centre has 1,200 parking spaces.

The new owner of the centre is the fund GreenOak. That fund closed one of the largest shopping centre transactions in Spain last year, together with Baupost and the Spanish real estate company Lar, when it acquired seven properties in Madrid, Málaga, Barcelona, Burgos and Alicante. It paid €160 million to Vastned for those properties. According to real estate sources, the fund will now spend €15 million on Sevilla Factory.

Knight Frank has advised Unibail and Deloitte’s RE team has advised GreenOak. Both have declined to comment on the deal.

Background

Through this transaction, Unibail Rodamco continues with its plans to divest its shopping centres in Spain that have lower footfalls. Sevilla Factory receives an average of 1.9 million visitors per year.

To this end, in recent months, the company has sold several shopping centres and has been preparing new deals. In December, Unibail sold the Habaneras shopping centre in Alicante to the US fund Harber for €65 million. Whilst a few months earlier, it sold Albacenter to the Socimi Lar España for €28.4 million.

Now, the French-Dutch real estate company is considering selling Equinoccio in Majadahonda (Madrid) and Barnasud in Barcelona. Unibail Rodamco is also the owner of other shopping centres in Spain, such as La Vaguada and Parquesur in Madrid and Splau in Barcelona.

Meanwhile, GreenOak is one of the funds that is backing Spain most heavily at the moment. Since its creation in 2010, it has invested around $2,500 million. Now it is focused on four key markets: USA, Japan, England and Spain.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Klépierre, Invesco And TH Offer €350m For Plenilunio

19 January 2015 – Expansión

The home straight/ Orion receives three binding offers for the Plenilunio Retail Park. Unibail Rodamco withdraws from the process.

The sales process for one of the largest shopping centres in Madrid is in its final stages with three finalists. The French company Klépierre and the funds Tiaa Henderson (TH) and Invesco have all submitted binding offers for the property.

Invesco is the latest candidate to join the bid for the centre; the French-Dutch group Unibail Rodamco has withdrawn from the process. The shopping centre operator had expressed interest in acquiring Plenilunio to create a Golden Triangle in Madrid, as the owner of three landmark properties: La Vaguada, ParqueSur and through this transaction, Plenilunio. However, the high price offered by its competitors has put pay to Unibail Rodamco’s aspirations, explain industry sources. The British real estate company Grosvenor has also expressed interest in the centre, according to real estate sources.

Thus, TH – which bid alongside a sovereign fund -, Invesco and Klépierre would all be willing to pay €350 million for this property, which occupies a surface area of 220,000 square metres. Plenilunio has 70,000 square metres of retail space (GLA), distributed over three floors, plus 2,500 parking spaces, according to the Spanish Association of Shopping Centres. The property, which has an occupancy rate of almost 98%, generates annual rental income of €20 million.

Upon receipt of the binding offers, the current owner, the US fund Orion, must choose whether to negotiate with a single finalist or to conduct a final competition with two of the finalists. It is expected to take this decision quickly as it aims to close the sale during the first quarter of 2015, as revealed by Expansión on 17 December.

Plenilunio, which opened in May 2006, was developed by the Spanish real estate firm Riofisa (acquired soon after by Colonial). Before its opening, Banco Santander bought the property for €275 million, and then sold it onto Orion for €235 million in 2009.

The US fund controls the property through its company Orion Columba which adopted a Socimi structure in September 2013. The sale of Plenilunio is the second large divestment that Orion has undertaken in Spain in recent months – it closed the sale of the Puerto Venecia shopping centre in Zaragoza at the end of 2014. The property, the largest in Spain, was acquired by the British real estate company, Intu Properties for €451 million. In October 2013, Orion paid €144.5 million for the 50% of the centre that it did not already own.

Plenilunio is one of 80 shopping centres expected to change hands over the next few months in Spain, according to Deloitte Real Estate. In 2014, more than €2,100 million was invested in shopping centres across the country, driven by the sale of Marineda in La Coruña for €260 million and Islazul in Madrid for €232 million.

Original story: Expansión (Rocío Ruiz)

Translation: Carmel Drake