Eurofund Group, Intu's minority partner in its Costa del Sol retail and leisure destination, has made a bid to buy out the struggling UK REIT's share in the massive Spanish project.
Financial details have not been disclosed, however the total project investment by the two parties is reported at €850 mln.
Eurofund owns a 25% stake in the development compared to Intu's 75%, but the latter's spiralling debt problems have seen Intu exit all of its Spanish assets to date except for Xanadu in Madrid and the Costa del Sol centre.
The scheme, north of Torremolinos and near Malaga airport is being branded as a ‘global resort’, intended to become one of a limited number of ‘super destinations’, according to Eurofund’s president Ian Sanford, who is the project director.
It will comprise 142,000 m2 of retail, as well as cinema, theatre and surfing attractions, plus hotels and other leisure features including 70 restaurants. At least half of an estimated 29 million visitors per year are expected to be tourists.
Experienced local player Sandford told PropertyEU last year that occupier interest was sky-high. 'I have spent my life in this business and I’ve never seen anything like this from a leasing perspective. We believe investors are taking confidence from it,’ Sandford said in November.
Step forward
The scheme took a big step forward at the end of May when the developers presented urbanisation and infrastructure plans to Torremolinos City Council, as part of a €47 mln pledge to remodel access to the site. Construction is slated to start in September, with a three-year build period.
A source close to Eurofund quotes the firm as having 'high hopes of reaching an agreement, given the special link that already exists between the two companies and existing arrangements'.
The timing is critical given the state of Intu's finances. Only last week, the UK REIT reportedly appointed KPMG as its administrator in case it fails to agree terms with lenders in continuing talks this week.
The firm, one of the UK's biggest shopping centre owners, is seeking to freeze repayments for the next 18 months. Intu has secured waivers on its covenant tests in respect of its revolving credit facility until 26 June, but experts warn that administration could beckon at the end of the month, should talks fail.
The landlord recently revealed that it had managed to collect just 29% of rents for the second quarter of 2020, compared to 77% in 2019.
Intu did manage to complete the sale of Puerto Venecia to Generali and Union Investment in May for €475 mln, but bondholders are said to be on standby to seize assets, should the firm fail to cover its debts.
