Topland concludes largest Spanish hypermarket sale-and-leaseback

Privately owned UK property investor Topland has acquired a portfolio of 12 hypermarkets in the Basque region of Spain from retail group Eroski for EUR 361 mln.

The deal, which comes on the second day of Barcelona Meeting Point, is the largest hypermarket sale & leaseback transaction in Spain ever. It also marks the first phase of a transaction which will amount to more than EUR 1 bn. The vendor described the deal , involving six major Spanish banks, as a 'remarkable achievement in this difficult financial climate'.

Eroski has created a joint venture company with Topland to manage part of its hypermarket portfolio in Spain. Cushman & Wakefield was the advisor on the deal.

Roger Cooke, managing director of Cushman & Wakefield Spain, commented: 'This transaction is a very positive signal to the investment market and that Cushman & Wakefield has other transactions in due diligence which we hope to close before the end of 2008.'

Law firms Hammonds and DJV Abogados acted for Eroski and Freshfields for Topland.

Under the agreement with Topland, a single joint venture vehicle will own most of Eroski's hypermarkets in Spain. The 12 individual hypermarkets spun off in the first phase of the transaction have surface areas within a range of 5,000 m² and 11,000 m².

Eroski embarked on the sale of its hypermarket portfolio in the summer of 2001 when it sold nine buildings to ING Real Estate. This was followed by the sale of another seven properties to Eurohypo Real Estate Investment Banking at the end of 2002.

Topland has already carved out a niche for itself as a specialist in retail sale-and-leaseback transactions in the UK, but this is its first deal in Spain. Topland, which has property assets in excess of EUR 6 bn, acquired 33 supermarkets and two distribution centres from Tesco in 2004, and a Marks & Spencer portfolio of 78 stores in 2001. Topland has since sold its interest in the joint venture with Tesco, and has sold its portfolio for around $1.9 bn (EUR 1.5 bn at today's exchange rate).