Intu properties and Canada Pension Plan Investment Board (CPPIB) have bought the 800,000 sq ft Parque Principado shopping centre in Oviedo, Northern Spain.
The acquisition of one of Spain’s top ten centres for €162 million before transaction costs, signals intu’s determination to build a substantial Spanish business. It already has a site under option in Andalucia, for 860,000 sq ft of retail space with additional leisure and has a deal with Eurofund, a local retail developer, covering this site and at two others in Valencia and Vigo.
The property company own Lakeside and the Victoria centre in Nottingham and will invest £1bn over the next ten years in active management projects and major extensions.
In a Stock Exchange announcement the company said: “We are aiming to attract additional third party capital to assist with funding Intu’s Spanish activities without diverting significant financial resources from Intu’s organic development pipeline in the UK. In this context, we are actively investigating the creation of a special purpose investment vehicle for our Spanish activities, such as a Spanish REIT, following a number of recent regulatory improvements to this product.”
With the Spanish economy poised for a return to growth in GDP from 2014, intu believes the shopping centre market in Spain offers opportunities to create a quality business of scale and has the potential to generate superior total returns over the long term.