Unibail-Rodamco-Westfield's putative sale of a portfolio of three shopping centres in Germany fell through this week.
According to well-informed market sources, URW was in exclusive negotiations with an entity backed by Italian insurer Generali to sell the assets in a process run by agent JLL. However, PropertyEU understands that the parties have now ended talks for reasons yet to be revealed and that URW is likely to break up the portfolio and market the assets separately due to the weak appetite for shopping centre portfolio deals in the country.
PropertyEU first announced in March that URW was looking to sell the properties as part of its ongoing refocusing on dominant malls. The assets - Palais Vest in Recklinghausen, Minto in Monchen-gladbach and Gera Arcade in Gera - provide around 124,000 m2 of retail space and were expected to fetch some €300 mln.
Investment in German shopping centres collapsed to a new historic low of €467 mln in the first half of this year, or a 63% decline year-on-year, according to research from broker JLL. Bricks and mortar retail is mainly suffering from weaker tenant sales as well as concerns over the impact of online retail penetration which is one of the highest in Europe.
The collapse of the transaction is a major blow for URW which earlier this year successfully shed another shopping centre portfolio. The group’s €460 mln sale of four Spanish malls to South-African investor Vukile reflected a blended yield of 5.9% and still represents the largest shopping centre portfolio transaction of 2018.
This article first appeared in EuroProperty, the weekly publication of PropertyEU.
