Blackstone inks €500m Iberian shopping centre deal

US private equity giant Blackstone has finalised the acquisition of a €500 mln Iberian retail portfolio in one of the largest European shopping centre transactions of the past few years.

New York-based Blackstone is buying the centres from CG Malls Europe, a Luxembourg-registered fund managed by Commerz Real.

Although financial details were not disclosed, Commerz Real said the assets - Almada Forum, Forum Montijo and Espacio León - have a value of around €500 mln.

'The markets in Spain and Portugal are recently recovering to a considerable degree, consumer demand is stable, and the three shopping centres are very well established,' said Eduardo Moran, the management board member of Commerz Real responsible for the transaction. 'In view of a considerable interest in such properties on the part of investors, we have acted at a point in time that was ideal from a strategic stance.'

PropertyEU reported in early April that the US fund manager was in advanced negotiations to acquire the malls. JLL advised on the sale.

Virtually fully leased
The 137,000 m2 portfolio encompasses the 59,000 m2 Almada Forum and the 41,000 m2 Forum Montijo in Lisbon/Portugal as well as the 37,000 m2 Espacio León in León/Spain, providing 506 shops in total. With an average occupancy rate of 95%, the centres are virtually fully leased.

Blackstone, which made the purchase on behalf of its Real Estate Partners Europe IV fund, will manage the assets through its European retail platform, Multi Corporation. The unit already owns and manages 25 assets in Spain and Portugal.

Jaap Blokhuis, CEO of Multi, said: 'These are all high-quality award winning assets originally developed by Multi that we will integrate into our operations in the region.'

The acquisition is 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.

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 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%.