Large shopping centres are being quietly offered to the market at big discounts, drawing the attention of private equity buyers.
Henley Investments’ acquisition last month of Galeria Pestka in Poland is said to have been made at a double digit yield.
Blackstone sold the 42,000 m2 shopping centre in Poznan to Henley after withdrawing it two-three years ago in a previous attempt to sell it at a higher price. Pestka was one of a portfolio of Polish shopping centres that the US giant amassed 10 years ago.
The centre, which was completed in 2008, includes Carrefour and Bricomarche as tenants, and it will continue to be managed by retail property manager Multi which Blackstone bought in 2013.
Private equity firm Henley is led by CEO Ian Rickwood, and CIO and European MD Justin Meissel. Meissel used to work at Blackstone.
Sources say that several private equity firms, including Goldman Sachs, Fortress and Cale Street, are also actively looking at buying big shopping centres at the discounts now available - which can be half the value of the assets five years ago.
One large distressed deal waiting to happen is Wereldhave’s sale of a portfolio of six French malls which it bought from Unibail in October 2014, paying €850 mln. At the time, the Dutch-listed retail property company carried out a €550 mln rights issue to help fund the deal.
Wereldhave now wants to sell the portfolio for €400 mln - €450 mln.
There were offers made by private equity groups last year for the portfolio, but it is believed a sale foundered because of the difficulties getting debt to finance the transaction. Banks generally are not lending on large shopping centres.
Brokers say that debt is available from debt funds but it is considered very expensive.
The assets, in Argenteuil in Paris; Bordeaux; Le Havre; Strasbourg; and two in Rouen have been withdrawn for the time being. France is currently in nationwide lockdown again due to the Covid-19 pandemic, making large investment transactions, especially complex portfolios, difficult.
Rickwood said Henley believes that well-located shopping centres will continue to perform well, ‘complementing e-commerce and absorbing the impacts of Covid-19’, and the firm was interested in further, similar retail investments in select Western European markets.
Blackstone meanwhile is focused on other sectors. Last November the US group gave up control of Blanchardstown, the 1.2 mln sq ft shopping complex in Dublin, after the mall’s value fell below the outstanding debt. A quick deal was agreed with mezzanine lender Goldman Sachs.
Blackstone paid €950 mln for the shopping centre using €767 mln of debt in 2016.
