Spanish supermarket chain Mercadona has sold a portfolio of 27 supermarkets to LCN Capital Partners’ European Fund III in a sale-leaseback deal worth €180 mln.
The 27 properties known as the Project Orange portfolio were put on the market earlier this year and were said to have attracted strong interest from a number of investors. They are located across Spain, with a strong concentration in Andalusia, Catalonia and Madrid. They will be leased back by the operator under 15-year leases.
CBRE represented Mercadona on the transaction.
Mercadona has historically made significant investments in the acquisition of land and buildings for its operation and as a result, it has significant real estate holdings. This transaction, the first of its type contemplated by Mercadona, allows the company to increase liquidity from their existing assets for reinvestment into their core business.
Chris Gardener, head of EMEA retail investment at CBRE, commented: ‘This transaction is an illustration of the underlying strength in the sale-and-leaseback market for convenience retail. Long secured terms to experienced operators are in demand given the current market uncertainty and we predict further interest and liquidity in this sector across Europe.’
LCN Capital Partners with over $3.5 bn in assets under management was co-founded by Edward V. LaPuma, who in his early career was an executive at US sale-and-leaseback specialist WP Carey.
Commenting on LCN’s first sale-leaseback deal in Spain, he said: ‘We will continue to work together with Mercadona on this portfolio while simultaneously looking to provide them with additional, real estate based, corporate financing solutions.'
Socitété Générale and BBVA acted as the lead arrangers and lenders to LCN. The legal advisors were Herbert Smith Freehills on the buy-side/borrower-side respectively, and Ashurst assisted the banks. Cushman & Wakefield provided valuations for the lenders.
In July Mercadona also instructed Savills Aguirre Newman to sell the Fenix portfolio of 32 supermarkets together comprising 90,000 m2 in total. Savills said that the opportunity included a 'value-add' angle for the potential buyer.
Also in the summer, JLL was mandated to sell the Jade portfolio, comprising six assets.
