Intu Denies Any Plans to Sell its Stake in the Intu Xanadú in Madrid

1 November 2019 – Intu Properties has insisted on its long-term commitment to the Intu Xanadú shopping centre, of which it owns 50%. Nuveen, formerly known as TH Real Estate, owns the other 50% and has also stressed its intention to stay on as a long-term investor in the asset.

Intu Xanadú has 204 stores and well-known tenants including El Corte Inglés, Aliexpress Plaza, Zara, Primark, Apple, H&M, Mango, and Decathlon.

Intu acquired the shopping centre two years ago from Ivanhoe Cambridge for €530 million, subsequently selling 50% to Nuveen for €264.4 million.

Original Story: Idealista – P. Martinez-Almeida

Adaptation/Translation: Richard D. K. Turner

British Real Estate Firms May be Forced to Sell their Shopping Centres in Spain

16 June 2019 – Expansión

Two of the largest British real estate companies with interests in Spain are considering selling off some or all of their assets on the Iberian peninsula in light of the challenging climate in the retail sector at home.

The bankruptcy and restructuring of several high-street stores – including the department store group Debenhams and the owner of Top Shop, Arcadia – are leaving many premises in the UK empty. As such, questions are being asked about the debt on the balance sheets of the landlords of those properties, causing a rethink in their overseas strategies.

In this context, Intu Properties and Hammerson have both launched asset sales plans in an attempt to raise GBP 600 million and €500 million, respectively. In Spain, Intu owns 50% of Xanadú (Madrid), Puerto Venecia (Zaragoza) and Parque Principado (Asturias), and is also building a new complex in Málaga. It would likely sell its stakes to its existing partners – TH Real Estate in the case of Xanadú and CPPIB in the case of Puerto Venecia and Parque Principado – although it is also holding conversations with third parties in order to maximise the price of any potential sales.

Meanwhile, Hammerson, which specialises in outlet stores, is considering selling some of its shares in the Las Rozas Village (Madrid) and La Roca Village (Barcelona). It owns direct stakes in both of those complexes, as well as a 25% in Value Retail, a company that holds stakes in 9 outlets across Europe, including Las Rozas and La Roca. In total, Hammerson owns 41% of La Roca and 38% of Las Rozas.

Nevertheless, in parallel, Hammerson is looking to increase its stake in Vía Outlets from 47% to 50%. Vía Outlets is another outlet group, worth GBP 400 million, which owns 11 centres across Europe with 2 in Spain, specifically, in Mallorca and Sevilla.

Original story: Expansión (by Roberto Casado)

Translation/Summary: Carmel Drake

Intu Considers Selling its 4 Shopping Centres in Spain to Pay Off Debt

6 March 2019 – Expansión

The British retail giant, Intu Properties, is considering putting up for sale its real estate assets in Spain in order to pay off some of its debt. The company’s stock market value has plummeted to €2 billion in recent months, and its debt amounts to more than €5 billion, following two unsuccessful takeover bids for the company last year.

The firm has reportedly received expressions of interest for its Spanish portfolio, which is worth €1 billion in total, from several large international investors. The assets in question are Xanadú (Madrid), Puerto Venecia (Zaragoza), Parque Principado (Asturias) and a mega-project currently under construction in Málaga.

No formal sales process has been initiated yet but a number of unsolicited offers have been received. Nevertheless, legal sources state that the firm would have to offer the right of first refusal to its shareholder partners in each case, namely CPPIB in the case of Puerto Venecia and Parque Principado, and Nuveen (previously TH Real Estate) in the case of Xanadú, before opening any sales process to the wider market.

Other potential suitors include Castellana Properties (the firm backed by the South African investor Vukile) and the Slovenian group J&T.

Original story: Expansión (by Roberto Casado & Rebeca Arroyo)

Translation: Carmel Drake

Blackstone Considers Buying Neinver from the Losantos Family for €500M

23 January 2019 – El Confidencial

Neinver, a property developer and operator of shopping centres, specialising in outlets – focused on offering discounted products – is up for sale and the US fund Blackstone is one of the buyers that is evaluating the operation. The Losantos family is asking around €500 million for the company, which has become one of the major operators in the shopping centre sector in Europe, and which would fit well into Blackstone’s portfolio given the stable rents generated by its properties and land, according to explanations provided by sources in the real estate sector.

Spokespersons from Neinver consulted about the negotiations indicated that “they decline to comment on rumours” regarding the sale operation, one of the largest underway in the sector in Spain this year from a corporate perspective.

Nevertheless, other financial sources have assured that the Losantos family has entrusted the sale of the company to Credit Suisse, which has drawn up a sales book that it has been promoting since the end of the year and which is being considered by several funds.

Blackstone is the favourite because it has already acquired assets from Neinver. In November last year, the property developer placed a package of industrial warehouses and logistics assets with Blackstone for €290 million. Therefore, this fund, the largest overseas investor in the Spanish real estate sector, is an old acquaintance of the Losantos family.

Neinver is chaired by José María Losantos del Campo. It is the largest operator of outlet centres in Spain and Poland, where it operates under two own brands: The Style Outlets and Factory. It has developed some of its assets in association with the fund TH Real Estate. In total, it has promoted and managed 16 outlet centres, and six shopping centres and retail parks (…). It has a presence in seven countries, including France, Italy, Germany, Portugal and the Czech Republic.

Neinver in numbers

Neinver recorded revenues of €93.6 million in 2017, according to the consolidated accounts filed with the Mercantile Registry. That figure represented an increase of 27% compared with the previous year.

Nevertheless, the strong performance in terms of sales was not reflected in its profits. Neinver is selling more but earning less. In 2017, its net consolidated profit amounted to €4.7 million, a third of the €16.1 million that it earned in 2016. The decrease in profitability was due in large part to the projects underway and its indebtedness.

According to the group’s consolidated accounts, the gross debt at the end of last year amounted to €466.3 million, €30 million more than during the previous year, “due to debts stemming from the new companies incorporated into the Neptune joint venture”. Neptune is the joint venture owned by Neinver and TH Real Estate.

Valuations

The €500 million asking price is without the debt. The book value of the company’s assets amounts to €913 million, according to Neinver’s own accounts. The main appeal of the company is the revenue stream stemming from the rental of its assets (…).

Original story: El Confidencial (by Marcos Lamelas)

Translation: Carmel Drake

The Losantos Family Puts Neinver Up for Sale for €500M+

26 December 2018 – Cinco Días

One of the historical names of Spanish real estate, the Losantos family, is putting its real estate firm Neinver up for sale for more than €500 million. Neinver specialises in building and managing retail outlets and is the company that manages shopping centres such as The Style Outlets and the Factory. It has a presence in several countries.

The company, chaired by José María Losantos del Campo, has engaged the bank Credit Suisse to search for interested parties in this multi-national firm that started life in La Rioja, according to four financial and real estate sources familiar with the operation. The financial entity and the company declined to comment about this operation.

The founder of the company, born in 1936, started out in the sale and purchase of tinplate, together with his brother Mario, and later founded Neinver in 1969. Mario would go on to found Riofisa, one of the large real estate empires in Spain (…).

José María Losantos grew Neinver, which is now headquartered in Alcobendas (Madrid), specialising in turnkey projects, for example, in several wineries, and which has opted for shopping centres over the last two decades. His son, Daniel Losantos, serves as the firm’s CEO. The real estate company has, in turn, been controlled by the company Teckel Gestora since 2016, which also owns rural estates in Ciudad Real and which is owned by the patriarch of the family.

Neinver manages 600,000 m2 of commercial spaces, across almost 2,000 stores and in 15 outlet centres under the brand The Style Outlets and Factory, which span a commercial surface area of 300,000 m2.

The company has a joint venture to share ownership of some of these assets with TH Real Estate, the real estate arm of TIAA, the US teachers’ pension fund. Neinver controls a lot of these properties through 23 companies, according to reports from Insight View based on property registry data.

In addition to the centres in Spain, it owns assets together with TH Real Estate and other partners in France, Germany, Italy, Poland, Portugal, the Netherlands and the Czech Republic.

In Spain, it owns The Style Outlets – which are dedicated to the off-season sale of well-known brands – in Las Rozas, San Sebastián de los Reyes and Getafe (all three in Madrid), A Coruña and Viladecans (Barcelona), as well as the Madrilenian shopping centres Alegra and Nassica.

This search for buyers entrusted to Credit Suisse comes at a critical moment for investment in the Spanish real estate market, which is featuring many international funds and Socimis. So far this year, until the middle of December, a record investment figure of €18.719 billion has been registered, according to CBRE, up by 45% compared to 2017, boosted above all by the acquisition of companies. In the case of retail, €4.279 billion has been invested to date this year.

Original story: Cinco Días (by Alfonso Simón Ruis & Pablo Martín Simón)

Translation: Carmel Drake

TH Real Estate Changes its Focus in Spain to Purchase Logistics Properties, Offices & Alternative Assets

11 June 2018 – Eje Prime

After ten years in Spain, TH Real Estate is changing its focus in terms of acquisitions. The company, which has historically purchased retail assets in the country, is going to change strategy to strengthen its portfolio with logistics properties, office buildings and alternative assets, such as halls of residence for students. That is according to Marta Cladera (pictured below), Director General of TH Real Estate Iberia, talking to Eje Prime in an interview.

“Traditionally, and due to the type of active funds, we have been very focused on the purchase of retail products” – said Cladera – “Now, we want to nurture our portfolio with logistics buildings, offices and alternative assets, such as halls of residence”. “We are analysing the market, we have a good track record in other types of assets, and so we will be able to create a portfolio with new types of assets and we will begin this year”, she added.

TH Real Estate will carry out these purchases through its fund European City Fund, which is one of the most active at the moment in terms of acquisitions and which has sufficient resources to undertake new purchases. By type of asset, the plans in terms of alternative assets involve not only the purchase of properties but also “teaming up with other operators, which may be from other parts of Europe”. In this way, TH Real Estate will follow in the footsteps of other funds such as CBRE GI and Axa, which, in their strategy to enter the hall of residence business, purchased Resa, the largest student hall company in Continental Europe.

In terms of the office sector, Cladera assures that “the competition is fierce” and the supply “is scarce”. “We are looking for buildings costing upwards of €50 million, but the supply that we are finding is not prime and those that are prime due to their location need a lot of renovation work, and that is something that holds us back, given that the numbers have to make sense for us to proceed and we have to focus on returns”, said the director.

Currently, TH Real Estate manages a portfolio worth €103 billion around the world, although Spain represents a small proportion of that, accounting for just 2% of its total business. In the Spanish market, the company owns assets worth €2 billion. “Although it is small compared to other markets, you have to look at the evolution: when we arrived in 2007, the portfolio was worth €200 million, as such, the growth over the last ten years has been significant”, she said. TH Real Estate’s team in Spain comprises nine people.

Socimi: under consideration 

Although this move is still in an embryonic phase, TH Real Estate does not rule out joining the Socimi party that is raging in Spain with some of its assets (…).

Currently, TH Real Estate owns fifteen assets across the Iberian Peninsula, of which fourteen are located in Spain and one in Portugal. Of those, two are logistics assets (acquired in 2017), and the rest are retail properties. One of the formulae that the group has used in the country has been to create joint ventures with different players for the acquisition of assets. Such was the case of the purchase of 50% of Xanadú from Intu for €264.4 million, for example (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Intu’s New Strategy in Spain: to Change the Names of its Shopping Centres

16 May 2018 – Eje Prime

Intu is betting on branding to raise the profile of its name in Spain. The company, which has a vast presence in the United Kingdom, where it owns almost twenty shopping centres, is going to replicate its British strategy in Spain, by adding the word Intu to the name of its retail complexes. This week, the company announced that its shopping centre in Zaragoza, which has been called Puerto Venecia to date, is now going to be named Intu Puerto Venecia.

It was in 2014 when Intu reached an agreement with the fund Orion European Real Estate to acquire the Puerto Venecia complex, the largest shopping centre in Spain, for €451 million. The complex contains a retail park spanning 82,600 m2, which was inaugurated in 2008 and a leisure and fashion area measuring 130,000 m2, which opened in October 2012 (…).

Since the purchase by Intu, the British group has carried out a series of changes to the appearance and management of the shopping centre. But it has not been until now that the group has decided to complete the process by adding the word Intu to the name of the complex, whereby following in the footsteps of Intu Asturias.

Now, the next step will be for Intu to apply the same strategy to the Xanadú shopping centre. The British group completed the purchase of that shopping centre, located in Arroyomolinos (Madrid), from Ivanhoé Cambridge for more than €520 million in March last year. That acquisition was the largest operation since Deutsche Bank paid €495 million for Diagonal Mar.

In May of the same year, Intu created a joint venture with TH Real Estate to share the ownership of the Madrilenian shopping centre, transferring 50% of the complex to TH Real Estate for €264.4 million, half of the amount that it had paid for Xanadú.

That shopping centre, constructed in 2003, has a total surface area of 153,695 m2 spread over two storeys and with a total of 220 stores, making it one of the largest retail complexes in Madrid. Its tenants include Inditex, El Corte Inglés, Hipercor, Bricor, Decathlon, Primark and Apple. Xanadú Madrid receives almost 13 million visitors per year and generates sales of around €230 million.

Shopping centres on the rise in Spain

Intu’s commitment to Spain comes at a good time for this retail format in the country. Sales registered at these complexes rose by 3.5% in 2017, to exceed €43.5 billion.

Specifically, revenues in the sector amounted to €43.59 billion in 2017. The market share of shopping centres and retail parks rose to reach 17.9%. Last year, around 1,900 million visits were registered at these complexes.

Meanwhile, investment in the sector soared by 35% in 2017, to €2.7 billion. During the course of last year, 29 transactions were closed involving 36 assets, according to data from the Spanish Association of Shopping Centres and Retail Parks (AECC).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

CBRE: Logistics Investment in Valencia Doubled to €60M+ in 2017

18 April 2018 – Las Provincias

The logistics business in the Community of Valencia skyrocketed last year. Logistics investment in Valencia doubled to exceed €60 million in 2017. The increase was driven primarily by large operations such as the purchase by TH Real Estate of Carrefour’s platform in Ribarroja and the acquisition by P3 Logistics of another platform that had formed part of GreenOak’s logistics portfolio.

That is according to a report compiled by the real estate consultancy CBRE, which places Valencia behind Madrid and Barcelona in the ranking of cities based on interest from funds in investing in logistics. On the other hand, leasing of logistics space also reached a new record in Valencia in 2017 with more than 220,000 m2 of space transacted.

The study reports that the logistics stock in Valencia amounts to 2,244,000 m2, of which just 20% may be considered as prime or maximum quality product. This increase is due both to the construction of new logistics warehouses and the renovation and adaptation of old industrial warehouses for this new use.

Lack of supply

Despite the delivery of more than 65,000 m2 of newly-built logistics warehouses, the availability rate decreased to 4.3% in 2017. The data shows the increase in demand for large spaces (measuring more than 10,000 m2, which accounted for 50% of the space leased last year). By area, the region to the north of Valencia accounts for the highest percentage of available industrial space with 13,200 m2 (6.4%), followed by the central area with 53,100 m2 (9.7%) and finally the south with 30,500 m2 (5.1%).

Ribarroja is still the most sought-after area with the highest leasing volumes. In fact, 15 of the 27 operations recorded in 2017, which together saw 125,000 m2 of the surface area contracted and which represented 60% of the total space leased (were located there). The continuous increase in demand and the scarce supply of quality products has caused prime rents to increase by 25% to €51/m2/year.

The centre of Valencia saw the highest price rises for both land, between €150/m2 and 225/m2, and rent, between €3/m2/month and €4.25/m2/month. The north and south regions recorded similar rental prices, between €2.75/m2/month and €3.90/m2/month, although the southern region was slightly more expensive than the north with prices of around €200/m2.

Original story: Las Provincias (by Á. Mohorte)

Translation: Carmel Drake

Deloitte: Inv’t In Retail Sector Will Reach €3.046bn in 2017

23 November 2017 – Expansión

Shopping centres have reached their cruising speed. After breaking all records last year, with a transaction volume of €3.769 billion, investment in the sector is maintaining its strong dynamism and could reach €3.046 billion by year-end. That would represent the second highest annual figure for a decade, according to research by Deloitte for The Shopping Centre Handbook.

So far this year, investment in shopping centres has amounted to €2.296 billion, which represents 30% of the total volume invested in the non-residential real estate market in Spain. Moreover, the remaining weeks of the year are expected to be particularly busy, which should allow the figure to exceed the €3 billion threshold in 2017.

Historical operations, such as the purchase of Xanadú (Arroyomolinos, Madrid) by the British fund Intu Properties for €520 million and the subsequent sale of 50% of that asset to TH Real Estate for €264 million; and the acquisition by Klépierre of Nueva Condomina, in Murcia, for €230 million, have catapulted investment this year despite the fact that, if the outstanding operations in the pipeline materialise, the total volume will be 19% lower than in 2016.

Record operation

Compared with other countries in Europe, Spain is consolidating its position as the third largest market in terms of investment, accounting for 16% of total volume. In this sense, the purchase of Xanadú leads the ranking of the largest operations transacted in Europe this year. Nueva Condomina also features in the list of top 5 deals, together with the purchase of Rathaus Galerie Leverkusen, (Germany) and Le Befane Shopping Centre (Italy), both of which were acquired by Union Investment, for €220 million and €244 million, respectively.

“Investors in shopping centres in Spain believe that the strong macroeconomic outlook will continue to boost household consumption and with that, the valuation of retail assets”, said the Partner in Financial Advisory at Deloitte, Javier García-Mateo.

In terms of the investor profile, García-Mateo explains that this year, “the stage has been shared by Spanish Socimis, which have seen their stake of total investment fall to 16%, to the benefit of international funds, which are looking to build large multi-country platforms”.

The Director of Financial Advisory at Deloitte, Ana Granado, also points out that this year, financing for shopping centres amounting to between €1.2 billion and €1.5 billion has been closed. “The traditional banks are being joined by a select group of alternative providers of capital, which are willing to finance the development of land and projects in the transformation and renovation phase”, she said.

Regarding the supply, currently, the average commercial density of shopping centres in Spain amounts to 285 m2 for every 1,000 inhabitants. By province, Zaragoza (with 638 m2 for every 1,000 inhabitants) and Las Palmas (with 641 m2 for every 1,000 inhabitants) are the Spanish provinces with the highest commercial density. At the other end of the spectrum are Lérida, with 40 m2 for every 1,000 inhabitants and Gerona, with 65 m2 for every 1,000 inhabitants.

Renovation

In terms of the commercial park, José María Espejo, Senior Manager at Deloitte Financial Advisory, indicates that 45% of the current supply of shopping centres is showing signs of significant technical obsolescence. “Any renovation processes will have to go hand in hand with some major capex investment”, he said.

According to Deloitte’s calculations, the amount of investment required to reposition the obsolete assets amounts to around €1.08 billion.

By way of example of some of the shopping centres that have been repositioned in recent years, La Moraleja Green, in Madrid stands out, with an investment of €10 million. That shopping centre, located in Alcobendas and inaugurated in 1995 is owned by Kennedy Wilson, which bought it from ING Real Estate in December 2015 for €71 million. Meanwhile, Unibail Rodamco, has invested €148 million in the repositioning of the Glòries shopping centre in Barcelona and Intu has spent €12 million on improvements at its shopping centre in Asturias.

Omni-channels

In terms of challenges for the future, commercial spaces are going to have to adapt to cater for the new habits of consumers and to make e-commerce an ally.

According to the report, shopping centres are at very preliminary levels of evolution and only the most advanced have online shopping platforms, mobile applications and loyalty programs for their clients.

Specifically, the level of omnichannel use of shopping centres in Spain amounts to 33%. By category, retail outlets achieve the highest degree of omnichannel use, whilst shopping centres bring up the rear in terms of their degree of digitalisation.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Deutsche Bank Negotiates Purchase Of L’Aljub Shopping Centre

9 November 2017 – Expansión

The real estate sector is heading for a new investment record this year and shopping centres are one of the star segments on the rise. Deutsche Bank, which marked a milestone in 2016 with its purchase of Diagonal Mar, wants to strengthen its position in this market and to this end, is negotiating the acquisition of the L’Aljub shopping centre, located in Elche. The operation could be closed for a price of more than €170 million, according to market sources.

L’Aljub is currently owned by 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. The consultancy firm Cushman & Wakefield is advising the vendor and CBRE the buyer.

This investment vehicle, which also owns two other retail assets in Italy, has a combined value of €300 million. The three assets were acquired a year ago from TH Real Estate for €250 million.

In addition to the retail and leisure premises, L’Aljub also houses an Eroski hypermarket on the ground floor. TH Real Estate purchased that store from Eroski a month ago through this investment vehicle for €18.7 million.

This investment in L’Aljub includes the hypermarket, which has a surface area of 9,900 m2, as well as the space leased by Primark (4,500 m2) and the gas station (200 m2), operated by Eroski.

The shopping centre was inaugurated in August 2003 and has a surface area of more than 60,000 m2, spread over two floors, as well as an extensive underground car park. The centre is home to 120 stores and 3,200 parking spaces (free of charge). Some of its most high profile operators include Inditex, H&M, Primark, Mango and Cines ABC.

If the negotiations prove fruitful, Deutsche Bank would strengthen its position in the retail segment in Spain. Last year, the company purchased the Diagonal Mar shopping centre (Barcelona) for almost €500 million. After the purchase of Xanadú, that operation was the second largest ever closed in the shopping centre segment.

Investment

Another example of the interest in this type of asset was the purchase of Xanadú by Intu Properties in March for €530 million. Subsequently, the British created a company with TH Real Estate to share ownership of the Madrilenian shopping centre.

Banca March has also decided to back this kind of asset with the purchase of the ABC Serrano shopping centre in Madrid this summer for €130 million, debt included. Meanwhile, Klépierre acquired Nueva Condomina in Murcia for €230 million earlier this year.

In this way, investment in the segment during the 10 months to October amounted to €2,300 million, which suggests a high volume year, behind only the historical maximum, recorded last year, of €2,700 million.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake