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Largest Spanish Deal Completes
11 Jul, 2007, Murcia
British Land has today completed the purchase of Spain’s prime regional shopping centre and retail park in Murcia for €350 million in a joint venture with the closed-end fund PREF, reflecting a gross initial yield circa 5 per cent.
The deal is reported to be Spain’s biggest single out-of-town retail investment transaction and confirms British Land/PREF’s position as the largest owner of out-of-town retail parks in Europe. Known as Nueva Condomina, the 120,000m2 scheme has been acquired from Deparcom, a joint venture between Eroski and Grupo Trusam.
Valentine Beresford, British Land said: “Selectively extending our investments in Europe is an important strategic step and a logical extension of our UK market leadership. There is an under provision of out-of-town shopping in many Eurozone markets with attractive supply/demand dynamics, similar to the UK, although much less mature. The Nueva Condomina development is a very rare opportunity to acquire a prime asset in a market where there is clear evidence of a growing number of international retailers pushing into the country.”
The shopping centre opened September 2006 and the retail park in May 2007. The two storey enclosed shopping centre and the retail park are 100 per cent let. Notable retailers include Primark, FNAC, H&M, Leroy Merlin and Media Markt as well as Zara, Massimo Dutti, Bershka, H&M, Benetton, Etam and Cortefeil.
The 120,000m2 scheme encompasses a 60,200m2 two storey enclosed shopping centre and a 44,400m2 retail park. The shopping centre includes a 15 screen multiplex and a 13,700m2 Hypermarket. There is dedicated parking for 6,500 cars.
British Land is the largest UK REIT by assets (£16.9 billion) with total assets under management of £21.3 billion, as at March 31, 2007.
The portfolio, focused on the growth sectors of London Offices and Out of Town Retail, has the longest leases and occupancy rates amongst the highest of the major UK REITs. Retail assets account for 56 per cent of the portfolio, 80 per cent of which is in prime out-of-town locations. Offices account for 41 per cent of the portfolio of which 97 per cent is London-based and includes a £4 billion office development pipeline coming to fruition between now and 2011.
British Land’s owned, contracted and managed assets in Europe are valued at €1.7 billion as at March 31, 2007, and include retail parks in Spain, Italy, Portugal, Belgium, Switzerland and France through its property adviser role and 40 per cent holding in PREF. Assets owned and committed in PREF total circa €1.1 billion.
Puerto Venecia, Zaragoza, is the circa €600 million retail and leisure scheme being developed through a joint venture between British Land, a group of European private investors and the Spanish construction company Copcisa Corp. Puerto Venecia is also commercialised by C&W
PREF is a seven year, closed-end fund created in 2004 investing in out-of-town retail parks in the Eurozone. PREF is advised by British Land European Fund Management, a partnership between British Land and Doric Properties Ltd.