South Africa’s Vukile Property Fund has solidified its Iberian footprint through the acquisition of a €176.5 mln shopping centre portfolio in Portugal.
Its 99.5%-owned Spanish subsidiary, Castellana Properties, has agreed to purchase three prime retail assets from a Harbert European Real Estate Fund subsidiary.
The portfolio comprises two shopping centres in Lisbon and one in Porto, each boasting strong market positions, prime locations, and a loyal customer base. With an attractive initial yield of approximately 9%, the transaction is expected to yield a compelling cash-on-cash return of around 10% in Euros.
Castellana Properties is acquiring RioSul, a 46,000 m2 two-story retail centre in Seixal, southern Lisbon, and Loures, a similar 44,745 m2 property in the northern part of the city. Both shopping centres feature a strong mix of national and international retailers, a variety of food options, a cinema multiplex and grocery anchor, Continente Hypermarket.
RioSul attracts nearly 8 million annual visitors and achieves annual sales of €98 mln, while Loures is located in a rapidly developing area of Greater Lisbon, poised to benefit from the opening of a new metro station in 2026.
In addition to these Lisbon acquisitions, Castellana is also acquiring 8a Avenida, a 28,923 m2 shopping centre located in São João da Madeira, a southern suburb of Porto. This prime retail property boasts a strong tenant mix, as well as a variety of food options and a cinema multiplex. Anchored by a Continente Hypermarket, 8a Avenida attracts 6 million visitors annually and generates approximately €58 mln in sales.
Laurence Rapp, CEO of Vukile, commented: ‘We have clearly signalled our confidence in the Iberian Peninsula and the good opportunities it holds. We are thrilled to capitalise on this opportunity in Portugal, extending and complementing the strong platform that Castellana has already established in Spain. Building on our successes in Spain, Castellana’s robust and proven on-the-ground management capability make this expansion a natural progression.’
Castellana Properties and RMB Investments & Advisory will jointly own the newly acquired shopping centres. Castellana will hold an 80% interest in the subsidiary, while RMB Investments & Advisory will retain a 20% stake.
The acquisition of the shopping centre portfolio is subject to customary closing conditions and is anticipated to be completed on 1 October.
Following the acquisition of the three Portuguese shopping centres, approximately 64% of Vukile's total assets will be located in Spain and Portugal, and nearly 56% of its property net operating income will be generated in Euros. Prior to this transaction, Vukile's portfolio included 32 shopping centres in South Africa and 15 in Spain.
Vukile Property Fund continues to actively explore investment opportunities in South Africa, Spain and Portugal that align with its growth objectives and deliver attractive financial returns.
