UK retail REIT Intu Properties has acquired the Xanadú shopping centre in Madrid from Canadian mall investor Ivanhoé Cambridge for €530 mln.
The deal includes the centre's management company and the SnowZone operating company, Intu said. Excluding these entities, the value of the centre is €526 mln, which represents an initial yield of 4.3%, based on its annual net rental income of €23 mln.
A €263 mln, five-year loan has been secured on the asset with Santander, BBVA, Credit Agricole and Caixabank, with the all-in cost of debt estimated at around 2%. The balance of the consideration will be financed from intu’s existing resources.
David Fischel, CEO of Intu, commented: 'The acquisition of Xanadú is an excellent addition to Intu’s growing portfolio of leading regional shopping centres in Spain, taking our ownership to three of the country’s top ten centres and now including one in the country’s capital city.'
Besides Xanadu, Intu also owns Intu Asturias near Oviedo, acquired in 2013, and Puerto Venecia in Zaragoza.
Located in the southwest of Madrid, Xanadú opened in 2003 and provides around 220 units with a trading area of 153,000 m2. The deal with Ivanhoe Cambridge involves acquiring around 119,000 m2 of the scheme, with the remaining area owner-occupied by department store chain El Corte Ingles. The occupancy rate is over 97%.
Xanadu is the major shopping and leisure destination in its core catchment of 1.2 million people that covers some of the wealthiest areas of the city, according to Intu. Average disposable income is 18% above the Spanish average and the unemployment rate is 8% below the national average.
Intu plans to carry out a number of asset management measures to enhance Xanadu's position, including improving the catering and leisure offer as well as the retail mix to ensure increased footfall and dwell time.
'Xanadú’s market position as an attractive shopping and leisure destination covering a major sector of Madrid fits well with our strategy of focusing on prime regional shopping centres in both the UK and Spain. We see a number of compelling opportunities to further enhance Xanadú’s status, such as improving the leisure and catering offering, with a Nickelodeon theme park and an aquarium due to open in 2017, and ensuring an enticing retail mix, which we believe will drive increased footfall and dwell time and ultimately improve rental levels and capital values,' Fischel said.
