Tag: real estate strategy

Lidl Boosts its Real Estate Business with €300M Investment

27 December 2017 – El Economista

Lidl is strengthening its commitment to the real estate sector. The German supermarket chain is planning to invest around €300 million next year (2018) buying up land and stores on/in which to open new supermarkets. Contrary to what most of the distribution sector is doing (the majority of retailers are selling their properties and leasing stores instead so as to focus on their core retail businesses), the German giant is standing firm in its commitment to the real estate recovery in Spain and so will continue investing.

With a current network of 540 stores, the idea is to own the largest possible number of stores. The average sales area amounts to around 1,500 m2, and so Lidl is looking for spaces measuring between 4,000 m2 and 9,000 m2, to allow space for warehouses and parking.

“Although we haven’t set an exact figure yet, the idea is to maintain the same rate of store openings as this year (2017), which means that we would open between 30 and 40 establishments in 2018”, explain sources at the company. Lidl arrived in Spain in 1994 and closed 2016 with a turnover of more than €3.335 billion, which represented an increase of 9.5% compared to the previous year. The company has also consolidated its position as the fifth largest operator in the sector with a market share of 4.3%, behind only Mercadona, Dia, Carrefour and Eroski, according to the latest market research published by the consultancy firm Kantar Worldpanel.

Presence at real estate fairs

Loyal to its real estate strategy, Lidl has already attended the recent exhibitions of the Barcelona Meeting Point fair to search for business opportunities. Moreover, it has decided to diversify its store opening strategy and enter, for example, traditional food markets (‘mercados de abastos’) and shopping centres.

In the case of the first, the German company has committed to opening stores in Barcelona, in the Sant Antoni and Vall d’Hebrón markets, and in Madrid, in the Tetuán market, in a strategy similar to the one being carried out by Mercadona. In the case of shopping centres, it has already opened its first store in this type of space in Islazul, in Madrid. Moreover, as well as new stores, Lidl is also making very significant investments in improving and modernising its existing stores.

Original story: El Economista (by Javier Romera)

Translation: Carmel Drake

Acciona Rules Out Socimi Creation & Replaces Walter de Luna As CEO

17 November 2016 – Expansión

Acciona has revised its real estate strategy after spending the last year working on its stock market debut and searching for a partner for its real estate division, which is worth more than €1,000 million.

The rethink has resulted in the departure of Acciona Inmobiliaria’s CEO, Walter de Luna (pictured above), the star recruit from Sareb, who joined the group owned by the Entrecanales family in 2014, with the aim of listing the company on the stock exchange, whereby taking advantage of the recovery in the market.

After 18 months working on a possible IPO and being advised by Morgan Stanley, Acciona has decided to cancel its stock market plans, due to an increase in the uncertainties and volatility surrounding such markets. That same uncertainty also put pay to its plans to list its renewable assets on an overseas stock market, through a yield (high dividend) vehicle in the USA.

The company has now redefined its strategy, which, in principle, sets aside the real estate activity and focuses on development. This change means that its rental portfolio (1,382 homes, 36 premises, two hotels, several office buildings and 155,000 m2 of land) will be moved into the main portfolio, as assets available for sale.

Acciona has just executed one divestment, with the sale to the Socimi Merlin of its 50% stake in the Arturo Soria Plaza shopping centre, for €44 million. Sources in the sector indicate that the construction company chaired by José Manuel Entrecanales is holding conversations with Merlin to sell other assets to the Socimi, such as Urbanizadora el Coto, which other investors have also expressed interest in.

The revenues obtained from the sale of Acciona’s rental assets will be used to invest in new developments. Acciona currently has a stock of around 300 homes, of which around one hundred are located in Mexico and Poland.

In 2015, Acciona carved out its pure property development business from its real estate business. Its rental homes, buildings and land were transferred into a new company called Acciona Real Estate, whose most recent valuation, according to the company, amounted to €630 million. In total, the division is worth €1,200 million.

The real estate company was born with a debt of €199 million. An important part of the subsidiary is Urbanizadora del Coto (rental homes and premises in Madrid), which Acciona purchased from the Cavero family in 2006.

According to the accounts for 2015, the real estate division saw its turnover fall by 45% to €51 million and its EBITDA decrease by €3 million to €6 million, compared with the previous year. Acciona’s share price closed down 1.2% yesterday at €63.80 per share.

Original story: Expansión (by C. Morán and R. Arroyo)

Translation: Carmel Drake