Listed UK investor Intu Properties has boosted its presence in Spain by acquiring the Puerto Venecia shopping centre and retail park in the northeastern city of Zaragoza from Orion Capital Partners for €451 mln.
Listed UK investor Intu Properties has boosted its presence in Spain by acquiring the Puerto Venecia shopping centre and retail park in the northeastern city of Zaragoza from Orion Capital Partners for €451 mln.
Based on a net rental income of €22.4 mln, the deal represents a net initial yield of 5.0%.
Intu purchased Puerto Venecia from an entity indirectly fully owned by Orion European Real Estate Fund III, which is managed by Orion Capital Managers.
Intu has obtained a €225 mln bridging loan from HSBC to finance the deal, which it can exchange for a five-year term loan secured on the asset, with the all-in cost of debt estimated to be around 3.5%.
The balance of the consideration will be met from Intu’s existing resources. The acquisition, which is scheduled to complete in January 2015, is expected to be earnings accretive.
Intu’s development partner in Spain, Eurofund, was closely involved in the original development of the centre which opened in 2008 (retail park) and 2012 (shopping centre).
In partnership with Eurofund, Intu has options on four development sites in Malaga, Valencia, Palma and Vigo. The UK shopping centre investor said the Puerto Venecia acquisition substantially strengthens its market position in Spain, where it already owns Parque Principado in Oviedo, ahead of embarking on the first of these projects which is likely to be the Malaga site.
Intu added that it is considering introducing an investment partner into Puerto Venecia and possibly the development site at Malaga.
Intu CEO David Fischel commented: ‘The acquisition of the Puerto Venecia shopping centre following last year’s successful acquisition of Parque Principado, Oviedo, is another great addition for the group.'
‘The transaction substantially accelerates our activities in Spain, which is a country where we see major opportunities for the type of genuinely regional destination centre in which the group specialises, like Intu Trafford Centre in the UK. Puerto Venecia represents such an asset, with an attractive combination of retail, restaurants and leisure.’
Fischel said Puerto Venecia provided an ‘excellent template’ for the development of other Spanish sites which the company has under option such as in Malaga.
Intu, which is listed on the London and Johannesburg stock exchanges, has over £7 bn (€8.9 bn) in retail assets under management and owns and operates nine of the top 20 shopping centres in the UK.