Intu Properties has acquired a Spanish shopping centre and retail park for a combined price of €451m from Orion Capital Managers, financed by a €225m bridge loan from HSBC.
The acquisitions reflect a significant bet on the recovering Spanish retail property market, cementing Intu’s position as one of the major regional shopping centre landlords in Spain. The transactions representing a net initial yield of 5.0% based on net rental income of €22.4m.
The HSBC bridge loan, can exchange for a five year term loan secured on the asset, reflects a loan-to-cost (LTC) of 49.9%, with the all-in cost of debt estimated to be around 3.5%. The balance of the consideration will be met from Intu’s existing resources.
David Fischel, Chief Executive of Intu, said: “The acquisition of the Puerto Venecia shopping centre following last year’s successful acquisition of Parque Principado, Oviedo, is another great addition for the group.
“The transaction substantially accelerates our activities in Spain, which is a country where we see major opportunities for the type of genuinely regional destination centre in which the Group specialises, like intu Trafford Centre in the UK. Puerto Venecia represents such an asset, with an attractive combination of retail, restaurants and leisure.
“The centre is seeing strong growth in footfall and retailer sales from key names and provides an excellent template for the future development of sites we have under option, such as in Malaga where we expect to move the project forward significantly in 2015.”
Similar to Intu’s approach in the UK, the REIT aims is to be a leading owner, developer and manager of regional shopping centres across the major areas of Spain.
“Ownership of the largest Spanish shopping centres is fragmented and many regions do not have a pre-eminent retail and leisure destination,” explains Intu. “The committed pipeline of prime shopping centre developments across Spain is at a low level and we believe the opportunity exists to develop and build new schemes in a number of key regions of Spain.”
Intu also has development options on four sites in Malaga, Valencia, Vigo and Palma.
In October 2013, Intu acquired Parque Principado shopping centre in Oviedo in partnership with the Canada Pension Plan Investment Board for €162m, reflecting a net initial yield at purchase of 7.2%