Eurocommercial agrees €135m Italian mall acquisition

Dutch listed retail specialist Eurocommercial Properties has signed the €135 mln acquisition of one of northern Italy's major shopping centres.

Eurocommercial Properties said on Tuesday it is acquiring a 50% share of the centre’s gallery, together with an adjoining retail park, for a net initial yield of 5.8%.

The centre, located in the Milan region, has a total floor area of 55,800 m2, including an 11,800 m2 hypermarket and 12,000 m2 of external retail units.

Further details on the acquisition will be announced on completion of the deal expected for the end of 2015, the company said in a statement.

Mediobanca acted for the vendor in the transaction and Jones Lang LaSalle for Eurocommercial.

The acquisition follows the announcement in February 2015 that Eurocommercial plans to complete the purchase of the hypermarket and parts of the gallery it does not already own at I Gigli, Florence for €82 mln. The vendor is the hypermarket Group Pam.

Eurocommercial will invest a further €18 mln to convert part of the hypermarket into gallery shops and refurbish the entire shopping centre. In addition, the company has just commenced work on the €75 mln extension of Eurostop in Halmstad, Sweden.

The 16,000 m2 project includes the relocation of the petrol station to allow for an enlargement of both the centre and the car park and provide better access to the north side of the centre. A net yield on cost of 7% is expected from the extension, which will bring the centre to a total of 47,500 m2.

Eurocommercial raised €164 mln through an accelerated equity raising to finance these investments.