EXCLUSIVE: Benson Elliott enters Italy with bargain retail deal

Private equity group Benson Elliott has inked the acquisition of a major retail park in Northern Italy in its first foray into the Southern European market, PropertyEU has learned.

According to well-informed market sources, Benson Elliott has bought Terminal Nord Retail Park in Udine from British Land's Pillar Retail Europark Fund (PREF) for a bargain price. The 32,340 m2 retail park is believed to have been sold for just less than €50 mln, representing a discount of over 50% to PREF's acquisition price of over €100 mln in 2008. The deal reflects a gross yield in the region of 10%.

Terminal Nord - PREF’s only asset in Italy - had been put on the market by British Land in 2013 as part of the UK REIT's strategy to pull out of Continental Europe.

The scheme is 95% let to strong national and international occupiers including Carrefour, Casa, Decathlon, Euronics and Maison du Monde, Kiabi and OVS.

CBRE is believed to be advising the vendor on the deal.

British Land announced in spring 2013 that it was planning to sell its £255 mln (€300 mln) retail holdings in Continental Europe. The UK REIT entered mainland Europe in 2005 with the purchase of Pillar Property, a retail specialist with assets in Spain and Italy.

Last year the company sold its 50% interest in Puerto Venecia, Spain's largest mall, and currently owns stakes in nine retail parks, through its 65.3% interest in PREF.

In Portugal, PREF's five out-of-town retail parks are some of the best in the industry, particularly the Sintra retail park near Lisbon. The 27,000 m2 Portimao Retail Park on the other hand is in bad condition after it almost completely burned down in a fire in September 2012.

Private equity firm Kohlberg Kravis Roberts is believed to be on the verge of acquiring two of the Spanish retail assets for some €100 mln in total.

KKR is understood to be acquiring the 95,000 m2 Nassica Retail and Leisure Park in Getafe to the south of Madrid, and the 16,000 m2 Vista Alegre Retail Park in Zamora. Both properties were refinanced in 2012 with a new €61 mln loan from pbb Deutsche Pfandbriefbank.