Pretoria - Listed intu Properties has further expanded its presence in Spain with the acquisition of the Xanadú Shopping Centre in Madrid for e530 million (R7.4 billion).
The acquisition means that intu Properties now owns three of the top 10 centres in Spain, and it positions the company as one of the leading regional shopping centre landlords in that country.
The company’s strategy in Spain is to create a business of scale through acquisitions and development projects.
intu entered the Spanish market in October 2013, when it acquired what was now called intu Asturias. This was followed by the acquisition of Puerto Venecia in Zaragoza.
It is planning a shopping resort development, intu Costa del Sol, outside Málaga, and is developing plans for centres at three other sites in Valencia, Vigo and Palma.
intu owns nine of the top 20 super regional centres in the UK and was previously known as Capital Shopping Centres, the unbundled and separately listed mall business of Liberty International that was founded by South African Donald Gordon.
Contracts
intu has exchanged and completed contracts with entities of the Ivanhoé Cambridge Group to acquire Xanadú shopping centre, its associated management company, and the SnowZone operating company.
The centre, excluding the management company and SnowZone business, was externally valued last month at e526 million, which represents an initial yield of 4.3 percent for the centre based on its annual net rental income of e23m.
The purchase consideration will be settled with a combination of loan finance and intu Properties’ existing resources.
A e263 million, five-year loan with Santander, BBVA, Credit Agricole and Caixabank has been secured on the asset.
The acquisition is expected to be earnings accretive.
Read also: Xanadu is in the intu bag
David Fischel, the chief executive of intu Properties, said the acquisition of Xanadú was an excellent addition to intu’s growing portfolio of leading regional shopping centres in Spain.
“Similar to our approach in the UK, our aim is to be the leading owner, developer and manager of regionally pre-eminent shopping centre destinations for a significant number of the major areas of Spain. Eighty percent of the country’s retail expenditure comes from 10 key catchment areas.”
Fischel said Xanadú fitted well with intu’s focus on major regional destinations in the UK and Spain.
He said the retail and leisure destination has an annual footfall of 13 million customer visits, with a core catchment of 1.2 million people and further potential catchment of more than 4 million people who live 30 minutes’ drive away.
The centre provides about 220 units with a trading area of 153000m² and has about 8000 parking bays.
Occupancy is at more than 97 percent.
Shares in intu Properties rose 0.49 percent on the JSE to close at R44.92.