Pan-European investor Schroder European Real Estate Investment Trust (SEREIT) has completed the purchase of the Metromar shopping centre in Seville, Southern Spain, from UBS Asset Management. The total purchase price of €52.5 mln reflects a net initial yield of 6.2%.
SEREIT has acquired a 50% stake in joint venture with the Schroder-advised Immobilien Europa Direkt (IED).
'With retail expected to be a key beneficiary of Spain’s economic recovery, this acquisition is a welcome addition to the portfolio, offering significant diversification for our investors whilst growing our dividend yield,' commented Tony Smedley, SEREIT fund manager.
The 23,500 m2 shopping centre is let to 50 tenants, with a significant convenience retail offering, anchored by a 2,300 m2 Mercadona grocery supermarket. Discretionary retail tenants include Zara, Mango, Sfera, H&M, Pull & Bear, Stradivarius, Bershka and Cortefiel.
The centre is anchored by a 12 screen cinema and a number of restaurants, and registers an annual footfall of around four million people. It is 90% let by area; 98% by estimated retail value (ERV).
This is the ninth acquisition by SEREIT, which has now invested €212 mln at a blended net initial yield of approximately 6.2% in established Western European growth cities.
Loan facility
The acquisition is being part funded with a new loan facility secured against the asset. The loan for the whole property is €23.4 mln (SEREIT share €11.7 mln), representing a loan to value of approximately 45%. The loan term is seven years and the interest rate is fixed at 1.76% p.a. SEREIT now has total third party loans of €60.4 mln, representing an overall loan to value across the company of 26% at an average weighted interest rate of 1.30%.
'We have been tracking this opportunity for some time and are pleased to complete the purchase. The property has a strong occupational track record, is located in one of the region’s fastest growing conurbations and fits with the wider portfolio strategy to acquire accretive assets that offer an attractive income profile with additional asset management potential,' added Smedley.
'We are excited to be delivering on our stated IPO strategy, building a considerable portfolio of diverse assets that are set to be beneficiaries of the improving economies and long term urbanisation theme being witnessed across the European cities in which the Company is invested,' he concluded.
