JSE-listed real estate investment trust (Reit) Vukile Property Fund will, through its subsidiary Castellana Properties, acquire a 50% stake in the Splau Shopping Centre, in Barcelona, Spain, to further advance its strategy of investing in dominant, high-performing retail assets.

The 50% stake in Splau is being acquired from property development company Unibail-Rodamco-Westfield (URW), which owns, develops and manages high-quality, sustainable real estate assets in Europe and the US.

The transaction is structured as a joint venture. This transaction is the third between URW, Castellana and Vukile and marks the beginning of a long-term partnership as co-owners of Splau.

URW will continue to oversee the day-to-day management of the shopping centre, while a joint asset management forum will provide strategic direction and ensure long-term value creation.

The 54 689 m² Splau Shopping Centre further diversifies and strengthens Castellana’s portfolio, which Vukile says now ranks among the strongest in Iberia and includes dominant assets in all three of Spain’s largest cities, namely Madrid, Barcelona and Valencia.

Splau is strategically positioned in Cornella de Llobregat at Barcelona’s southern gateway and offers access to a dynamic and expanding catchment area.

It holds a large market share in its catchment of about one-million people and is accessible by multiple public and private transport modes with a highly desirable and convenient location.

The shopping centre is valued at €350-million, with Castellana’s 50% stake worth €175-million. Vukile says the transaction will be earnings-accretive for Castellana.

The acquisition will be fully funded through existing cash resources, with completion expected before the end of April, the Reit says.

“This acquisition reflects our continued confidence in Spain’s retail real estate market and our ability to secure dominant assets with strong fundamentals and growth potential,” says Vukile CEO Laurence Rapp.

Splau was opened in 2010 and has a diverse mix of 151 stores. It also has popular food and leisure attractions with more than 36 restaurants, a bowling alley and a large cinema.

The centre offers strong value-add potential through tenant mix improvements, expanding food and beverage options, and development projects linked to local population growth.

Meanwhile, Vukile continues with its disciplined strategy to recycle capital into high-quality, higher-growth retail assets in Spain.

To date this year, Castellana has completed the sale of its portfolio of nine retail parks in Spain for €279-million, the acquisition of the Berceo shopping centre in Logroño for €101-million and the acquisition of Islazul shopping centre in Madrid for €318-million, thereby advancing Castellana’s focused strategy of acquiring dominant shopping centres with strong catchments, strong growth potential and clear asset management upside.

Following the disposal of several retail parks and the acquisitions of Berceo, Islazul and Splau, Castellana’s portfolio will comprise 15 assets across Spain and Portugal, with a total gross lettable area of 594 420 m² and a total portfolio value approaching €2.2-billion.

“Our asset rotation in Spain reinforces Vukile’s disciplined approach to capital allocation. Vukile will continue to pursue a disciplined pipeline of accretive acquisition opportunities, supported by our established platform and partnerships, our specialist retail expertise and strong access to capital and deal flows,” says Rapp.