Vukile Property Fund has, through its 98.7%-owned Spanish real estate investment trust (Reit) subsidiary Castellana Properties, acquired Habaneras Shopping Centre, its first shopping centre in Spain, for €80.6-million.
The easily accessible open-air shopping centre is in Torrevieja, in the south-eastern Alicante province on the Costa Blanca.
Vukile entered the Spanish retail property market in July 2017, through Castellana’s acquisition of 11 Spanish retail parks for €193-million.
Castellana then went on to acquire a further two retail parks in December 2017 for €70-million.
“We entered the Spanish market less than a year ago and have made swift progress in growing an investment of scale and substance in Spain. Our Spanish retail property exposure is now nearing €400-million and comprises quality assets located in territories with good growth metrics,” said Vukile CEO Laurence Rapp.
The acquisition of the 24 158 m2 Habaneras Shopping Centre, he adds, is another landmark step in reinforcing Castellana’s position as a significant participant in the Spanish market.
The transaction is 50% funded from debt, provided by Aareal Bank, and equally with cash from Vukile from existing available funds.
“We are pleased to add the first shopping centre to our portfolio of retail assets in Spain, especially one as compelling as Habaneras Shopping Centre, which is a portfolio enhancing acquisition,” Castellana Properties CEO Alfonso Brunet commented.
He added that the transaction increases the average value of the properties in the portfolio from €19.7-million to €23.5-million, as well as enhances the perceived quality of the portfolio and adds to the economy of scale in Castellana.
Developed in 2005 and refurbished in 2014, Habaneras is a high-quality asset that is 93.3% occupied, with nearly half of its space dedicated to fashion, including a significant collection of Inditex brands.
About 92% of the centre’s tenants are national brands, and it has a weighted average lease termination of 6.1 years to expiry and 3.8 years to the next breaks.
Habaneras anchors a greater retail node spanning around 60 000 m2, which includes Carrefour, Lidl, Ozone Bowling, IMF Cinemas and KFC, as well as tranquil terraces, which offer a selection of restaurants and an excellent vantage point to enjoy its panoramic views.
The centre, which has until now been passively managed, also includes the potential for Castellana’s skilled on-the-ground active asset management to add value to the asset by enhancing the centre.
Prospects include potential upside from leasing vacant space which was not paid for, adding lettable area, repositioning and expanding existing tenants and enhancing its terraces with more leisure options and experiences.