The ECE European Prime Shopping Centre Fund II has purchased the intu Asturias shopping centre in Oviedo. As a result, ECE Fund II is now fully invested.
It is the first property in Spain for the ECE shopping centre funds. The seller is a joint venture company through affiliates of intu properties plc and Canada Pension Plan Investment Board.
The purchase price amounts to €290 million and ECE will be responsible for the asset management as well as centre management and leasing and will continue to work with the current operator of the property, Cushman & Wakefield.
Opened in 2001, intu Asturias offers around 140 shops across a leasable area of approximately 74,000 sq m as well as around 5,000 parking spaces. The centre is located in the Asturias region, an economically strong region in the northern part of Spain.
ECE said of the acquisition: “It has a very good market positioning and provides potential for further value-add developments. Anchor tenants include Primark, Media Markt, H&M, an Eroski hypermarket, and the Inditex brands Zara and Bershka. Plans for further development include a restructuring and modernisation of parts of the centre and the addition of further attractive anchor tenants.”
“We are delighted to enter into an attractive market which we have had in our investment focus for some years now,” said Dr Volker Kraft, Managing Director of the ECE Real Estate Partners fund management company. “With the acquisition of intu Asturias, we have complemented our ECE Fund II portfolio by adding one of the strongest shopping centres in Spain with more than nine million visitors per year. Although it is currently virtually fully let, we have identified a number of exciting value-add opportunities, which we want to realise in accordance with our investment strategy.”
RPA Perspective For its part, intu announced that a joint venture company through affiliates of intu properties and Canada Pension Plan Investment Board has exchanged contracts to sell intu Asturias shopping centre to the ECE European Prime Shopping Centre Fund II, with the intu share €145.0 million.
The transaction forms part of intu’s stated strategy of fixing its balance sheet and will deliver net proceeds to intu of around €85 million after repaying asset-level debt, working capital adjustments and taxation. intu will use the net proceeds to repay debt with the transaction reducing loan to value by around 1%. The transaction is expected to complete in the next week.
This disposal follows the agreement for sale of intu Puerto Venecia for €475.3 million (intu’s share €237.7 million). intu’s 50% share of the aggregate net rental income for intu Puerto Venecia and intu Asturias was €19.3 million for the year ended 31 December 2019.
Matthew Roberts, chief executive of intu, said: “We are pleased to have successfully agreed our second disposal in Spain in the last month. Our number one priority is fixing the balance sheet which includes creating liquidity through disposals. This transaction, which along with the disposal of intu Puerto Venecia, the part-disposal of intu Derby and other sundry asset sales brings our total disposals since the start of 2019 to nearly £600 million.”