INTERVIEW: Pradera eyes €120m of Spanish retail acquisitions

Retail real estate fund and asset manager Pradera is looking to expand its presence in Spain both through acquisitions and new asset management mandates, according to the company’s newly appointed head of Spain, Alfonso Brunet Morales-Arce.

Pradera, which in Spain manages a €600 mln portfolio of retail assets, plans to invest a further €100-120 mln in new acquisitions in the country this year. The expansion is part of the asset manager’s strategy to double its assets under management in Europe over the next 36 months, added Brunet. The company currently has €2.6 bn under management.

‘We are very focused on growth across Europe at this point and Spain in particular is an area of focus since the market’s turnaround,’ he noted.

While rents remain low in the country, prices have been rising for the past 18 months, driven by a wave of foreign capital looking for opportunities in the country. ‘Fundamentals are finally catching up with the investment market. GDP growth is expected to be around 3% this year and consumption levels are also on the rise. This positive trend will particularly benefit consumer-driven sectors such as shopping centres,’ noted Brunet, who has been with Pradera for the past nine years.

After joining Pradera Spain in 2006 as acquisitions manager, Brunet was subsequently promoted to head of investment for Spain. Prior to Pradera, he spent eight years at CBRE, most recently as head of logistics real estate and national industrial agency.

In total, Pradera manages a 220,000 m2 portfolio in Spain consisting of 12 shopping centres and retail parks owned by its Pradera European Retail Fund (nine assets) and Pradera European Retail Fund 2 (three assets). The assets reported a 6% increase in retail sales in the year to end-April 2015.

POERF, an open-ended vehicle largely backed by German capital, is currently looking for new investments in Spain and Brunet admits the company is currently in negotiations to acquire two projects worth a total of some €100 mln. ‘We hope to close the deal before the end of the summer,’ he added.

In addition, the company has a mandate from investor Allreal for a mall in Cadiz which it is redeveloping into a retail park. It was recently also awarded a mandate from Lone Star for the management of the Rivas Futura retail park in Madrid.

‘We see many opportunities on the asset management front. We are working with five or six London-based investors who do not have a Spanish platform and who are planning to focus on the Spanish retail property market,’ he said.

The market is expected to remain strongly polarised in terms of core versus opportunistic capital, with core investors playing a larger role in the future, added Brunet. ‘We are seeing more core capital coming in and focusing on good secondary assets given the complete lack of prime assets on the market.’