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