Global asset manager AEW has acquired a high-street retail asset in Madrid on behalf of its Europe City Retail Fund for around €50 mln, marking the fund’s second purchase in the Spanish market.
AEW said the property, which provides 2,400 m2 of retail space, is located on Calle de Fuencarral, one of the top three retail streets in the centre of Madrid.
The vendor is a fund established by ActivumSG Capital Management. ActivumSG Real Estate Fund III acquired the Mercado de Fuencarral, a small shopping centre comprising various independent fashion brands and stalls, in 2014. Working together with Talus Real Estate, the asset was converted so that a single occupier could use it as a flagship store, and sports retailer Decathlon was secured as a tenant in July.
Saul Goldstein, founder and managing partner of ASG, said: 'Retail units offering more than 1,000 m2 of space are a rarity on Fuencarral, so we were able to take an under-utilized property and reposition it. Along the way, we secured Decathlon to lease the revamped property at a rent that surpassed our projections and are now exiting this prime, stabilized institutional-quality asset to realize the gains for our investors.'
Other retailers in the vicinity include Mango, Diesel, Adidas, Calvin Klein and Tommy Hilfiger.
Nikos Koulouras, executive director of investment at AEW, said the acquisition of 45 Calle de Fuencarral was structured as a forward-funding deal and took 12 months to conclude. A similar process was followed for the first Madrid asset acquired for the City Retail fund, which relates to a retail development due to be delivered in September, he said. ‘We are committed to the Spanish market and continue to seek interesting opportunities there across our strategies.’
45 Calle de Fuencarral is one of six assets acquired by AEW over the last two years in Spain on behalf of various mandates, and will take assets under management in the Spanish market to €406 mln. AEW opened its Madrid office headed by Carsten Czarnetzki in January of this year.
AEW was advised by Herbert Smith Freehills while the vendor was represented by Uría Menéndez.
The Europe City Retail Fund focuses on income-producing retail assets that are well located within the main European city centres. Current equity commitments are now close to €500 mln and the fund has already made a number of acquisitions in key markets including Milan, Paris, Rome and Copenhagen.
The Madrid deal comes a few weeks after AEW acquired two retail assets in Dublin and Milan for the fund for a total of €39 mln.
