Acquisition of Parque Principado Shopping Centre, Oviedo, Asturias, Spain by Intu and CPPIB

Intu Properties plc (Intu) and Canada Pension Plan Investment Board (CPPIB) have together entered into a joint partnership agreement to acquire Parque Principado Shopping Centre, Oviedo, a 75,000m2 (approximately 800,000 sq ft) prime regional retail destination in Asturias, Northern Spain.
 
The purchase price for the acquisition is EUR162 million before transaction costs. Intu will undertake the asset management of the property. It is the co-investors' intention after acquisition to secure bank financing at around 50 per cent of the property value.
 
The implied net initial yield at the purchase price is 7.2 per cent based on net income of EUR11.7 million.
 
"The opportunity to acquire Parque Principado, a top ten centre in Spain, on attractive and earnings accretive terms firmly establishes our presence on the ground in a country where we see considerable growth opportunities in the regional shopping centre industry. A further positive feature of the acquisition is entering into partnership with a major and highly regarded global investor, CPPIB, and we look forward to extending this relationship," commented David Fischel, Chief Executive of Intu.
 
"This transaction is an opportunity to acquire a prime regional shopping centre in Spain and is in line with our global retail strategy to invest in high-quality assets which are leaders in their catchment area. We believe this is an attractive entry point to the Spanish retail market. Intu is one of the largest and most established shopping centre operators in the U.K. and we look forward to partnering with them on this and future investments," said Graeme Eadie, Senior Vice-President and Head of Real Estate Investments, CPPIB.
 
Key features of Parque Principado, which opened in 2001, include:
  • one of Spain's top-ranked retail destinations, the primary out-of-town centre for the region of Asturias
  • single-level covered retail gallery of 156 units
  • anchored by Primark, Zara, H&M, Cortefiel, C&A, Mango and Eroski hypermarket
  • the catering and leisure offer represents around 20 per cent of space, including a 12 screen cinema and bowling plus 20 restaurants
  • occupancy 97 per cent, average unexpired lease term of six years
  • nine million footfall in 2012
  • well located, on an intersection of two motorways
  • catchment population of approximately 900,000 within a 30 minute drive
  • significant asset management opportunities including adding to the range of catering and leisure and reconfiguring the below mall area and the hypermarket

Cushman & Wakefield acted on behalf of the co-investors in the purchase of Parque Principado and has been appointed property manager and letting agent.

 

on October 7, 2013