Tag: Vukile

Vukile’s Socimi Plans to Grow its Asset Portfolio by 2.5x to €1bn in 3 Years

25 June 2018 – Expansión

Castellana Properties is accelerating its growth plans with the aim of becoming the largest Spanish Socimi specialising in the retail sector in Spain and fighting off competition from its rivals Lar and Merlin. The company controlled by the South African fund Vukile Property is seeking to grow its asset portfolio to €1 billion over the next three years, which would see it multiply the size of its current portfolio, comprising 15 properties with a value of around €400 million and spanning 197,000 m2, by 2.5 times.

“We are going to do this through organic growth, in other words, by buying new assets”, explains Alfonso Brunet, CEO of Castellana Properties. The director has extensive experience in the real estate sector, in particular in retail, after his time at the fund Pradera and the consultancy firm CBRE.

“We are an income fund – over the long term – and we seek stable, predictable rental income, with potential for future growth. Given the current macroeconomic environment and recovery, we see clearly that there is upwards potential in the retail market”, he says.

To achieve its objective, the Socimi is analysing the purchase of both portfolios and individual assets, above all in secondary cities and prime locations. Currently, the company “is studying operations worth €2 billion”.

In terms of its immediate plans, Castellana Properties will make its debut on the Alternative Investment Market (MAB) before September. “We are not going to undertake any capital increases ahead of the MAB debut. We want to grow in size so that, in the future, we will be able to attract new investors to help us grow”, he adds.

The firm’s objective involves achieving sufficient volume to make the leap onto the main stock market. “Our main shareholder is Vukile, which is a Reit (an entity equivalent to a Socimi) and it is interested in securing new investors.

Background

Castellana Properties started life in December 2015 with the purchase of two office buildings in Madrid and Sevilla. A year later, the South African fund Vukile purchased 98% of its share capital and prepared its next major operation: the purchase of a portfolio of nine retail parks spread over several Spanish towns for almost €200 million. The latest acquisition in May of this year involved the purchase of the Habaneras shopping centre in Alicante for €80 million.

Currently, the firm owns 13 retail parks and shopping centres and two office buildings, and its activity accounts for 21% of Vukile’s business.

Brunet acknowledges that, after the start of the recovery in Spain, the prices of real estate assets have risen due to interest from investors. “We think that there is a lot of potential for rental incomes to rise following the decreases of the crisis. Given that we are an income fund, that is what interests us the most”, he adds.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Vukile Increases Castellana Properties’s Share Capital by €7M to Fund New Purchases

12 June 2018 – Eje Prime

The South African fund Vukile is looking after its investment vehicle in Spain. The Socimi Castellana Properties has increased its share capital by €7 million to undertake new purchases, according to explanations provided by the group to Eje Prime. The company is whereby continuing with its investor appetite, which was sated in May with the purchase of the Habaneras shopping centre for €80.6 million.

“Castellana Properties is immersed in an ambitious growth process”, explain sources at the company. “Last year, the Socimi acquired eleven retail parks in Spain for approximately €300 million, to become a strategic player in the real estate sector and, specifically, in the retail sector”, explain sources at the company.

“The capital increase forms part of this growth strategy; it will allow us to increase the company’s financial capacity to undertake new and exciting projects”, they conclude. Following this increase, the resultant subscribed share capital will amount to €33.4 million. The South African fund Vukile now has a portfolio containing thirteen shopping centres in Spain and an investment made to date of €290 million across the whole Spanish market.

Since last year, the group has closed several operations in the Spanish market. Redevco Iberian Ventures, the joint venture between the real estate company specialising in retail Redevco and funds managed by the global alternative asset manager Ares Management, sold nine retail parks to the Socimi for €193 million.

In December, the group acquired two retail spaces in Granada and Murcia with an investment of €65 million. Alameda Park has a surface area of 25,000 m2 and was acquired for €54.6 million, whilst Pinatar Park occupies 10,637 m2 and involved an outlay of €10.7 million.

The only operation signed by Vukile and Castellana Properties so far this year has been the purchase of the Habaneras shopping centre for more than €80 million. The complex was constructed in 2005 by Metrovacesa. Since then, the asset has passed through the hands of Unibail-Rodamco, in 2008 and Harbert, which acquired Habaneras for €65 million.

That centre has a gross leasable area of 24,158 m2 and contains 70 stores distributed over three floors and more than 800 parking spaces. Its tenants include operators such as Zara and H&M. The Habaneras shopping centre received 4 million visitors last year and recorded operating revenues of €5 million.

Original story: Eje Prime

Translation: 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

Vukile Negotiates Purchase of the Habaneras Shopping Centre

25 January 2018 – Eje Prime

A new corporate operation is on the horizon in the shopping centre sector in Spain. The Habaneras complex may be changing hands once again, given that the investment fund Harbert European Real Estate Fund is negotiating its purchase for €80 million from the Socimi Castellana Properties (managed by Vukile).

The Habaneras shopping centre was constructed in 2005 by Metrovacesa. Since then, the complex has been owned by Unibail-Rodamco, which bought it in 2008, and by Harbert, which acquired Habaneras for €65 million, according to Expansión.

The complex has a gross leasable area of 24,158 m2, contains 70 stores spread over three floors and has 800 parking spaces. Its tenants include retailers such as Zara and H&M. The Habaneras shopping centre ended last year with 4 million visitors and operating revenues of €5 million.

Meanwhile, the South African fund Vukile already owns a portfolio containing thirteen shopping centres in Spain and has made investments to date amounting to €290 million across the whole Spanish market.

Original story: Eje Prime

Translation: Carmel Drake

Vukile Buys 2 Shopping Centres in Spain for €65.2M

7 December 2017 – Business Live

Local real estate investment trust (Reit) Vukile Property Fund closed weaker on Wednesday, following an announcement that it was acquiring two more shopping centres in Spain.

Vukile said it was set to buy the Alameda Shopping Centre and Retail Park in Pulianas, Granada for €54.5m and the Pinatar retail park in San Pedro del Pinatar for €10.7m. Vukile’s Castellana subsidiary, in which it holds a 98.3% stake, would conclude the transaction.

Vukile announced in July that Castellana had acquired a portfolio of nine retail parks in a €198m transaction and also established an in-country management team and operational platform. The acquisitions allowed Vukile, via Castellana, to leverage its operational platform and grow its Spanish portfolio of retail parks.

The territories in which Castellana operates, continue to experience strong demand for space with limited prime retail park availability, which will enhance Castellana’s retail offering, Vukile said.

Vukile was down 3.3% to R19.72 (equivalent to approximately €1.23 on 7 December 2017). It has gained 5.57% in 2017.

Vukile is the only South African-based Reit with noteworthy exposure to Spain. The other listed players that have a small exposure to the region include Schroder European Real Estate Investment Trust, Greenbay Properties and Intu.

Vukile is following in the footsteps of many local property groups by diversifying from local operations into international assets, predominantly in eastern Europe.

Catalyst Fund Managers investment analyst Mvula Seroto said local Reits have been affected by the lacklustre economic environment. “We see the potential for negative earnings surprises in some listed funds.”

Despite this, most South African-focused listed property firms were trading at discounts to their net asset values. This puts management teams in a tough position to raise new equity to fund acquisitions.

Original story: Business Live (by Maarten Mittner)

Translation: Carmel Drake

Catella: RE Inv’t Rose By 60% During First 8 Months To €7,061M

25 September 2017 – Expansión

The Spanish real estate market is still a magnet for investment at the global level. In this way, during the 8 months to August, investment in tertiary real estate assets (in other words, non-residential properties) rose to €7,061 million. That volume is 62% higher than the figure registered during the same period in 2016, according to data from the consultancy firm Catella (…).

By type of properties, commercial assets accounted for 45% of the total investment, with a volume of more than €3,200 million, up by 52% compared to the first eight months of 2016. In fact, that figure already exceeds the amount recorded for last year as a whole and is very close to the record investment made in 2007, when commercial assets worth more than €3,590 million were sold, according to sources at the consultancy firm.

Of that amount, investment in shopping centres accounted for 60% of total retail investment, amounting to €1,929 million. The figure is explained by the completion of major operations, such as the purchase of Xanadú, in Arroyomolinos (Madrid), on which Intu Properties spent €530 million; and the operation involving Nueva Condomina, in Murcia, which Klépierre purchased for €233 million.

Interest

Large assets were not the only retail assets to spark interest: high-street premises were also on investors’ radars. As such, €711 million was spent on that type of property between January and August, with highlights including operations such as the purchase of Preciados 9, the future flagship Pull & Bear store in the centre of Madrid, by Generali for €98 million. Meanwhile, investors spent another €516 million on retail parks and supermarkets, with the operation involving a portfolio of nine retail parks leading the way – the South African investor Vukile spent €193 million on that purchase.

In the case of offices, investment increased by 46% to reach €1,512 million. “The Boston portfolio – comprising 14 office buildings located in Barcelona, Madrid and Valencia – owned by BBVA and acquired by Oaktree for €180 million has been the most important transaction so far this year. In Madrid, the most significant transaction saw the acquisition of the Manoteras business park by Tristan Capital (€103 million), whilst, in Barcelona, the most high-profile deal has been the purchase of Torre Agbar by Merlin Properties (€142 million”, say sources at Catella.

During the first 8 months of 2017, hotel purchases rose by 25% to reach €1,760 million, thanks to operations such as the one involving Edificio España, for €272 million, as well as the purchase starring the international fund London & Regional (which acquired four hotels located on the coast and islands for €240 million), as well as others involving Starwood and KKR.

Moreover, the logistics sector has not been left behind in terms of the increase in investment. Between January and August, that segment saw investment grow by 31% to reach €575 million. (…). In this area, the most significant operation has been the sale of GreenOak’s portfolio to P3 Logistics Park for €243 million.

Whilst retail assets were the star product by type of property, international funds continued to be the undisputed stars in terms of buyer profile.

Between January and August, funds accounted for 42% of the total volume invested; whilst real estate companies represented 28% of the total (…). Meanwhile, the Socimis, who were the most active investors in 2014 and 2015, have seen their share of the cake decrease to 11% so far this year.

“On the other hand, core investors have returned to the market, with the acquisition of prime properties located in Madrid and Barcelona. Insurance companies, family offices and other institutional investors have purchased assets such as offices and retail premises in Madrid, with yields of around 3%”, said Carlos López, Partner at Catella.

Year-end

“…We expect 2017 to be a record-breaking year, with an investment volume of around €10,000 million, compared to the figures of more than €8,500 million in tertiary investment in 2016”, says López (…).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake