HIG Capital snaps up Madrid mall from Doughty Hanson

US-headquartered investment firm HIG Capital has acquired Plaza Éboli shopping centre in Madrid from private equity firm Doughty Hanson for an estimated €30 mln.

PropertyEU first reported in April that Doughty Hanson was selling Plaza Éboli in the Pinto district of the Spanish capital and El Rosal mall in the northern-western city of Ponferrada in two separate transactions as part of the group's exit from real estate to focus on its core private equity business.

Financial details were not disclosed but Plaza Eboli is believed to have traded for around €30 mln.

Spanish REIT Lar is understood to be closing in on El Rosal for €85 mln.

Doughty Hanson paid Sonae Sierra €120 mln for the malls four years ago.

Plaza Eboli is a neighbourhood mall located in Pinto, one of the main towns in the southern Madrid metropolitan area. The centre comprises over 31,000 m2 and was completed in 2005.

'This transaction demonstrates our ability to identify assets with high growth potential and to execute complex acquisitions in a short period of time,' said Ahmed Hamdani, managing director at HIG in London.

Adolfo Favieres, director at HIG. in Madrid added: 'We are pleased to announce the completion of HIG Capital’s fifth property transaction in Spain. HIG continues to build a retail portfolio across the country which will benefit from the recovery of Spanish private consumption.'

HIG Capital has built up a €1 bn real estate portfolio across Europe over the past 24 months and is working towards setting up its first European fund later this year.

According to market sources, HIG is aiming to raise $500 mln (€480 mln) for a pan-European value-add real estate vehicle, which will invest both in real estate and real estate-secured debt.

With leverage of around 60%, the vehicle is expected to have a firepower of around €1.2 bn and will seek to offer returns in the high teens. It would be the first dedicated European real estate investment vehicle launched by the $17 bn US private equity asset manager since entering the real estate sector three years ago.

The strategy is identical to the one used in the US where the group has been managing several funds over the last 10 years.

With European offices in London, Madrid, and Milan, HIG has built up a 12 dedicated staff on the Continent in addition to being supported by a pool of analysts. It invests in both real estate and real estate-secured debt on an opportunistic basis and focuses on off market transactions with a small lot size of between €20 to €100 mln offering asset management potential.