Spain’s retail assets have become an investor favourite this year with two large shopping centre transactions closing this week alone. According to research by adviser CBRE, the Iberian Peninsula claimed Europe’s top three retail transactions by value in Q1 this year, with the largest deal so far being the trade of the Bonaire shopping centre in Valencia for €305m.
Investors are being drawn to the sector’s strong fundamentals including record levels of tourism and a meaningful growth in retail sales which reported a 4.8% year-on-year rise in May, the highest since February 2022. “This is a market that is showing great strength, with record numbers of visitors and sales,” said Paul Santos, head of retail at CBRE Spain.
Rivoli Asset Management this week signed the acquisition of the 53,000sqm Ballonti shopping centre in Bilbao for €120m and earlier this year snapped up 50% of Intu’s Xanadú mall in Madrid for some €200m.
Also this week, South African listed investor Lighthouse Properties emerged as the buyer of the fully-let Espacio Mediterraneo shopping centre in Cartagena, near the Murcia region in Spain, for €135m.
The previous owner, Deka Immobilien’s WestInvest InterSelect open-ended real estate fund, had put the 50,000sqm property on the market in November last year through adviser Cushman & Wakefield. Deka said that the transaction was carried out at a profit to the asset’s latest book value.
For Lighthouse Properties the acquisition reflects its strategy to invest in regionally-dominant retail assets in economically resilient and growing urban areas. In March, the Malta-based, South African-listed investor also acquired Alcalá Magna in Madrid’s Alcalá de Henares for €96m, or a gross yield of 7.6%.
Lighthouse pointed out that there has been a “notable” compression in acquisition yields in Spain. “Investor interest in the Iberian region has intensified, resulting in greater competition for premium malls,” the investor said, noting that it expects less availability of “high-quality, attractively priced assets in the short to medium term”.
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