Blackstone in talks to buy €500m of Portuguese malls

US fund manager Blackstone is in advanced negotiations to acquire two Portuguese shopping centres in one of the largest transactions in the country since the crisis.

According to market sources, New York-based Blackstone is buying Almada Forum and Forum Montijo from CG Malls Europe, a Luxembourg-registered fund controlled by Commerzbank.

The deal, which was initially reported by Bloomberg, is expected to have a value of around €500 mln. JLL is advising on the sale.

'We can confirm that we plan to sell the portfolio of our institutional real estate fund, CG Malls Europe, which the two Portuguese shopping centres are part of,' a Commerz Real spokesperson told PropertyEU. He declined to comment further on the sale.

Almada Forum opened in 2002 and has a total area of 78,815 m2 over 262 shops. Forum Montijo has 160 stores, 22 restaurants, a supermarket and a six-screen cinema, according to its website.

The acquisition would be the second by Blackstone in Portugal in recent months. In December last year the private equity giant bought a retail portfolio from Novo Banco, the lender that emerged from the break-up of Banco Espirito Santo, for around €200 mln.

Blackstone declined to comment on the deal.

Rising investment volumes
A number of large-ticket transactions are expected to push Portugal's investment volumes this year to over €1 bn. This would make it one of the highest figures on record, according to Luis Antunes, head of C&W’s capital markets in Portugal. It would also represent a nearly 43% increase on the 2014 level of €704 mln and about three times as much as in 2013, when only €320 mln was transacted in the market. In 2012, a paltry €100 mln of Portuguese real estate changed hands.

‘We are seeing interest from traditional investors from Germany, Spain, the UK and the US as well as from new geographies such as China, South Africa and Brazil,’ Antunes told PropertyEU. As a result of increased activity and growing demand for assets, prime retail yields have already compressed by around 100 basis points from 7.5% previously to about 6.5% at present while prime office yields are currently at around 6%.

Just last week, US private equity firm Lone Star announced it has acquired Garvecat, the company responsible for the development of the Vilamoura resort in the Algarve region of Portugal. The deal, one of the largest real estate transactions in Portugal, was carried out on behalf of Lone Star Real Estate Fund III.

Financial details were not disclosed, but Lone Star said the acquisition represents the 'largest real estate transaction in Portugal in 2015 and one of the most prominent since the start of the recent crisis'.

The vendors are Catalunya Banc's Corporación Bética and Algarvetur and the sale is part of the divestment process carried out by Catalunya as part of its strategy to focus on retail banking. The Vilamoura resort spans in excess of 2,000 hectares around an 825-berth marina. The resort comprises over 700,000 m2 of buildable land for the construction of hotels and over 5,000 apartments and houses.

More deals in the pipeline
More deals are on the way. PropertyEU recently revealed that an international consortium has put Lisbon’s Torre Ocidente on the market with a price tag of over €70 mln. The four owners - Caixa Geral de Depósitos Group, Iberdrola Inmobiliária, CBRE Global Investors and Sonae Sierra - have hired Cushman & Wakefield to market the scheme which provides 29,000 m2 of gross space over 14 floors.

It is located next to the Centro Colombo retail centre, a major shopping destination in the Portuguese capital, and its twin Torre Oriente, which was bought by Union Investment Real Estate in 2010 for its open-ended real estate fund UniImmo: Global. The deal marked Union Investment's debut on the Portuguese real estate market.

Another large-ticket transaction in the pipeline centres on Dolce Vita Tejo, the largest shopping centre in Portugal worth some €200 mln. According to well-informed sources, UK group Eurofund Investments and US private equity firm Baupost are in the running for the acquisition.