Finnish pension insurance company Elo and Allianz Real Estate have each acquired a 25% stake in a €1.8bn Iberia shopping centre portfolio from Sonae Sierra and APG.

Sonae and Dutch pension fund manager APG have sold 50% of their interest in Sierra Prime and will receive €525m of cash proceeds.

The parties have formed a joint venture with each investor holding a 25% stake in the Sierra Prime portfolio with a 15-year horizon.

The Sierra Prime portfolio is made up of six prime retail shopping centres, with three located in Greater Lisbon (Centro Colombo, Centro Vasco da Gama and CascaisShopping), two in Málaga (Plaza Mayor and Designer Outlet Málaga), and one in Greater Porto (NorteShopping).

Timo Stenius from, Elo director, said: “Shopping centres are a part of Elo’s diversified real estate portfolio and our focus is on the best, locally dominant shopping centres that meet the present and future expectations of customers.

“The well managed Sierra Prime joint venture is a good fit for Elo’s investment strategy and the real estate portfolio. We are pleased to make our first Iberian real estate investment alongside leading institutional investors.”

Allianz said the deal represents its first investment in Portugal and further complements the firm’s focus in the region.

Kari Pitkin, head of business development, Allianz Real Estate, said: “This portfolio is comprised of the most-dominant shopping centres in Portugal and Spain. Portugal, in particular, is a very strong market for shopping centres due to the minor role of high street retail.

“This transaction offers Allianz Real Estate excellent, long-term diversification benefits at significant scale and underlines our strategic approach to expand selectively in alternative asset classes – best-in-class assets in terms of performance and location. In addition, we have a strong interest to further expand our footprint in one of Europe’s most dynamic real estate markets.”

Jerome Berenz, head of indirect investments, Allianz Real Estate, said: “The Sierra Prime portfolio underscores our commitment to working with prime partners, investors and stakeholders.

“We are delighted to build relationships with well-known and established stakeholders such as APG, Sonae Sierra and Elo who share our long-term, strategic approach and focus on prime assets.”

Fernando Guedes de Oliveira, Sonae Sierra CEO, said following the transaction, Sonae Sierra will maintain the management of the portfolio properties.

Robert-Jan Foortse, head of APG European property investments, said: “APG has been an investor in this portfolio of prime shopping centres since 2003. Over the last 17 years, the assets have shown their strength and resilience.

“We are now pleased to be part of the creation of Sierra Prime, allowing us to retain exposure to these assets going forward, whilst bringing in Allianz and Elo, two respected institutional investors, as new partners to the venture.”