Download Acquisition of Xanadú shopping centre, Madrid, Spain 36.2KB

Press Release
10 MARCH 2017
INTU PROPERTIES PLC
LEI: 213800JSNTERD5CJZO95
ACQUISITION OF XANADÚ SHOPPING CENTRE, MADRID, SPAIN
Introduction
intu properties plc (‘intu’) announces that it has exchanged and completed contracts with
entities of the Ivanhoé Cambridge Group to acquire Xanadú shopping centre in Madrid,
Spain, along with its associated management company and the SnowZone operating
company, for a total cash consideration of €530 million, before working capital and other
adjustments. The centre itself, excluding the management company and SnowZone
business, was externally valued on 1 February 2017 at €526 million, which represents an
initial yield for the centre of 4.3 per cent based on its annual net rental income of €23 million.
A €263 million five year term loan with Santander, BBVA, Credit Agricole and Caixabank has
been secured on the asset, with the all-in cost of debt estimated to be around 2.0 per cent.
The balance of the consideration will be met from intu’s existing resources. The acquisition is
expected to be earnings accretive.
We are looking to introduce an investment partner into Xanadú and are currently progressing
discussions with potential partners.
David Fischel, intu Chief Executive, commented:
“The acquisition of Xanadú is an excellent addition to intu’s growing portfolio of leading
regional shopping centres in Spain, taking our ownership to three of the country’s top ten
centres and now including one in the country’s capital city. Xanadú’s market position as an
attractive shopping and leisure destination covering a major sector of Madrid fits well with
our strategy of focusing on prime regional shopping centres in both the UK and Spain. We
see a number of compelling opportunities to further enhance Xanadú’s status, such as
improving the leisure and catering offering, with a Nickelodeon theme park and an aquarium
due to open in 2017, and ensuring an enticing retail mix, which we believe will drive
increased footfall and dwell time and ultimately improve rental levels and capital values.”
Investment strategy for Spain
•
•
•
•
•
The acquisition of Xanadú, along with our existing ownership of intu Asturias, Oviedo
and Puerto Venecia, Zaragoza, takes our ownership to three of the top ten centres in
Spain, positioning intu as one of the leading regional shopping centre landlords in Spain
The centre fits well with our focus on major regional destinations in both the UK and
Spain, such as intu Trafford Centre and Puerto Venecia, offering shoppers a full day out
with a wide range of retail, restaurant and leisure opportunities
Located in the south-west area of Madrid, Xanadú is the major shopping and leisure
destination in its core catchment of 1.2 million people that covers some of the wealthiest
areas of the city. Average disposable income is 18 per cent above the Spanish average
and the unemployment rate is 8 per cent below the national average. The centre is
located within one of the fastest growing and densely populated areas of the city
Our key asset management initiatives for the centre revolve around enhancing its status
as a truly regional retail and leisure resort. Improving the catering and leisure along with
ensuring that the centre delivers an enticing retail mix will drive increased footfall and
dwell time, ultimately improving rental levels and capital values
The acquisition is expected to be earnings accretive and offers good reversionary
potential over the medium term, with further growth opportunity from our key asset
management initiatives
Key facts on Xanadú
Xanadú is the retail and leisure destination for the south-west of Madrid and one of the top
ten shopping centres in Spain. With direct access onto the main highway from Madrid to
Extremadura, it has an annual footfall of 13 million customer visits, with a core catchment of
1.2 million people and further potential from over 4 million people living within a 30 minute
drive time.
The centre, which opened in 2003, provides around 220 units with a trading area of 153,000
square metres, comprising:
•
•
•
•
a retail mall over two levels, including all the key retailers such as El Corte Ingles, all of
the Inditex fascias, Primark, H&M, Apple and Mango
a strong leisure offering including SnowZone, Spain’s only indoor ski slope, a 15 screen
Cinesa cinema and Ilusiona bowling. This will be enhanced by an aquarium and
Nickelodeon theme park opening in 2017
two big box units let to BriCor and Decathlon
around 8,000 car park spaces
This transaction involves acquiring approximately 119,000 square metres of the scheme,
with the remaining area owner occupied by El Corte Ingles.
Occupancy is over 97 per cent.
intu in Spain
In October 2013, when we acquired what is now called intu Asturias, we highlighted that the
Spanish shopping centre market offers opportunities to create a quality business of scale
which has the potential to generate superior total returns over the medium term. We now
own three of Spain’s top ten shopping centres, with Xanadú added to our two existing
centres which are generating strong returns.
Similar to our approach in the UK, our aim is to be the leading owner, developer and
manager of regionally pre-eminent shopping centre destinations for a significant number of
the major areas of Spain. Eighty per cent of the country’s retail expenditure comes from ten
key catchment areas.
Ownership of the largest Spanish shopping centres is still fragmented and many regions do
not have a prime retail and leisure destination. The committed pipeline of prime shopping
centre developments across Spain is at a low level and we believe the opportunity exists to
develop and build new schemes in a number of key regions of Spain.
In addition to the three top ten centres that we now own, we also have a development site
near Malaga and options on sites in Valencia, Vigo and Palma. We expect to start the
construction of intu Costa del Sol, near Malaga, in the next 12 months.
Spanish economy
In recent years, the Spanish economy has had significant growth making it one of Europe’s
fastest growing economies. Forecasts suggest that this is expected to continue in 2017. For
the consumer, unemployment is at its lowest level for several years and household spending
remains solid. This in turn benefits retail sales which are further enhanced by record levels of
tourists.
Enquiries
intu properties plc
Susan Marsden
Group Company Secretary
+44 (0)20 7887 7073
Martin Breeden
Development Director
+44 (0)20 7887 7067
Adrian Croft
Head of Investor Relations
+44 (0)20 7960 1212
Public relations
UK:
Justin Griffiths, Powerscourt
+44 (0)20 7250 1446
SA:
Frédéric Cornet, Instinctif Partners
+27 (0)11 447 3030
Notes for editors
intu is the UK's leading owner, manager and developer of prime regional shopping centres with a growing
presence in Spain.
We are passionate about creating uniquely compelling experiences, in centre and online, that attract
customers, delivering enhanced footfall, dwell time and loyalty. This helps our retailers flourish, driving occupancy
and income growth.
A FTSE 100 company, we own many of the UK's largest and most popular retail destinations, including nine of
the top 20, with super regional centres such as intu Trafford Centre and intu Lakeside and vibrant city centre
locations from Newcastle to Watford.
We are focused on delivering against four strategic objectives: optimising the performance of our assets
to deliver attractive long term total property returns, delivering our UK development pipeline to add value to our
portfolio, leveraging the strength of our brand and seizing the opportunity in Spain to create a business of scale.
We are committed to our local communities - our centres support around 120,000 jobs representing about 4 per
cent of the total UK retail workforce - and to operating with environmental responsibility.
Our success creates value for our retailers, investors and the communities we serve.