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Acquisition of Parque Principado Shopping Centre, Oviedo, Asturias, Spain by Intu and CPPIB
INTU PROPERTIES PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: ITU
INTU PROPERTIES PLC
7 OCTOBER 2013
INTU PROPERTIES PLC
ACQUISITION OF PARQUE PRINCIPADO SHOPPING CENTRE, OVIEDO, ASTURIAS, SPAIN BY
INTU AND CPPIB
Introduction:
Intu Properties plc (“Intu”) and Canada Pension Plan Investment Board (“CPPIB”) have today
announced a joint partnership agreement to acquire Parque Principado Shopping Centre, Oviedo, a
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75,000m (approximately 800,000 sq ft) prime regional retail destination in Asturias, Northern Spain.
The full text of the joint press release is set out in Further Information below.
The opportunity to acquire Parque Principado, a top ten centre in Spain, on attractive and earnings
accretive terms firmly establishes Intu’s presence on the ground in a country where we see
considerable growth opportunities in the regional shopping centre industry. A further positive feature of
the acquisition is entering into partnership with a major and highly regarded global investor, CPPIB,
and we look forward to extending this relationship.
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Intu has a site under option in Andalucia, for 80,000m of retail space with additional leisure and, as
previously announced, has entered into arrangements with Eurofund, a local partner with a track
record of successful retail development, for pre-development activity on this site and at two major sites
under option, in Valencia and Vigo.
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.
Market background:
After a difficult period, the Spanish economy appears to be stabilising. Expectations are for a return to
growth in GDP from 2014. Unemployment growth has slowed and structural reforms are expected to
have improved labour competitiveness with longer term benefit. Private consumption is expected to
return to growth in 2015.
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. The Spanish prime shopping centre
market is quite fragmented in terms of ownership. Considerable scope exists for improvement, along
the lines of regionally pre-eminent destinations in the UK and elsewhere, in the shopping centre
provision for many major catchments in Spain. Spain is one of the few major European countries
without a committed pipeline of prime shopping centre developments and limited investor competition
currently provides a contra-cyclical opportunity to acquire large, high quality centres at historically low
pricing.
Webcast presentation:
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Intu will host a webcast presentation to analysts and investors at 8am BST on Monday 7 October.
The presentation and this press release are available for download from intugroup.co.uk.
Enquiries:
Intu:
David Fischel Chief Executive +44 (0)20 7960 1207
Matthew Roberts Finance Director +44 (0)20 7960 1353
Kate Bowyer Head of Investor Relations +44 (0)20 7960 1250
UK public relations: Michael Sandler/Wendy Baker, Hudson Sandler +44 (0)20 7796 4133
SA public relations: Frédéric Cornet/Cara White, College Hill +27 (0)11 447 3030
Sponsor:
Merrill Lynch South Africa (Pty) Limited
FURTHER INFORMATION
JOINT PRESS RELEASE
7 OCTOBER 2013
INTU PROPERTIES PLC
ACQUISITION OF PARQUE PRINCIPADO SHOPPING CENTRE, OVIEDO, ASTURIAS, SPAIN BY
INTU AND CPPIB
Introduction:
Intu Properties plc (“Intu”) and Canada Pension Plan Investment Board (“CPPIB”) have together
entered into a joint partnership agreement to acquire Parque Principado Shopping Centre, Oviedo, a
2
75,000m (approximately 800,000 sq ft) prime regional retail destination in Asturias, Northern Spain.
The purchase price for the acquisition is €162 million before transaction costs. Intu will undertake the
asset management of the property. It is the co-investors’ intention after acquisition to secure bank
financing at around 50 per cent of the property value.
The implied net initial yield at the purchase price is 7.2 per cent based on net income of €11.7 million.
David Fischel, Chief Executive of Intu, commented:
“The opportunity to acquire Parque Principado, a top ten centre in Spain, on attractive and earnings
accretive terms firmly establishes our presence on the ground in a country where we see
considerable growth opportunities in the regional shopping centre industry. A further positive feature
of the acquisition is entering into partnership with a major and highly regarded global investor, CPPIB,
and we look forward to extending this relationship.”
Graeme Eadie, Senior Vice-President and Head of Real Estate Investments, CPPIB, said:
“This transaction is an opportunity to acquire a prime regional shopping centre in Spain and is in line
with our global retail strategy to invest in high quality assets which are leaders in their catchment
area. We believe this is an attractive entry point to the Spanish retail market. Intu is one of the largest
and most established shopping centre operators in the U.K. and we look forward to partnering with
them on this and future investments.”
Key features of Parque Principado, which opened in 2001, include:
• one of Spain’s top-ranked retail destinations, the primary out-of-town centre for the region of
Asturias
• single-level covered retail gallery of 156 units
• anchored by Primark, Zara, H&M, Cortefiel, C&A, Mango and Eroski hypermarket
• the catering and leisure offer represents around 20 per cent of space, including a 12 screen
cinema and bowling plus 20 restaurants
• occupancy 97 per cent, average unexpired lease term of 6 years
• 9 million footfall in 2012
• well located, on an intersection of two motorways
• catchment population of c900,000 within a 30 minute drive
• significant asset management opportunities including adding to the range of catering and
leisure and reconfiguring the below mall area and the hypermarket
Cushman & Wakefield acted on behalf of the co-investors in the purchase of Parque Principado and
has been appointed property manager and letting agent.
Intu webcast presentation:
Intu will host a webcast presentation to analysts and investors at 8am BST on Monday 7 October.
The presentation and this press release are available for download from intugroup.co.uk.
Enquiries:
Intu:
David Fischel Chief Executive +44 (0)20 7960 1207
Matthew Roberts Finance Director +44 (0)20 7960 1353
Kate Bowyer Head of Investor Relations +44 (0)20 7960 1250
UK public relations: Michael Sandler/Wendy Baker, Hudson Sandler +44 (0)20 7796 4133
SA public relations: Frédéric Cornet/Cara White, College Hill +27 (0)11 447 3030
CPPIB:
Linda Sims, Director of Media Relations, +1 416 868 8695, lsims@cppib.com
Further information:
1: PARQUE PRINCIPADO SHOPPING CENTRE, OVIEDO:
Parque Principado Shopping Centre forms the key part of a retail complex that is the primary regional
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out-of-town retail destination in Asturias. The wider complex, in total 120,000 m , also includes major
occupiers such as Ikea, Bricomart, Intersport and Conforama.
The complex is located on the north eastern outskirts of Oviedo city, approximately 6 km from its
centre, and has frontage on to the main A66 motorway, strategically positioned at its junction with the
A64 motorway.
The shopping centre has a quality tenant line-up including major national and international retailers
such as Inditex (Zara, Bershka, Massimo Dutti, Pull & Bear, Stradivarius, Kiddy’s Class, and Oysho),
Primark, H&M, Cortefiel, Springfield, Women’s Secret, Mango, New Yorker, Benetton, Media Markt,
FNAC and Eroski hypermarket.
Catering and leisure operators include McDonalds, Gino’s, VIP’s, 100 Montaditos, Burger King and
Foster’s Hollywood. The leisure offer is anchored by a Cinesa cinema and Planet Bowling. There are
5,000 car parking spaces on site.
2: INTU PROPERTIES PLC:
Intu Properties plc (formerly Capital Shopping Centres Group PLC) is the UK’s market-leading
developer, owner and manager of prime regional shopping centres. Intu owns and operates some of
the very best shopping centres, in the strongest locations right across the UK, including ten of the
country’s top 25. Every one of the UK’s top 20 retailers is in Intu’s shopping centres, alongside some
of the world’s most iconic global brands.
With over 17 million sq ft of retail space valued at over £7 billion, Intu’s 16 centres attract some 340
million customer visits a year and two thirds of the UK population live within a 45 minute drive time of
one of the centres.
At the forefront of UK shopping centre evolution since the 1970s Intu’s focus is on creating compelling
destinations for consumers with added theatre.
On 15 January this year, the company announced the creation of a nationwide consumer facing
shopping centre brand – intu – and the transformation of the Group’s digital proposition including a
transactional website, to provide the UK’s leading shopping centre experience on and off-line.
Intu has a UK investment programme of £1 billion over the next ten years on active management
projects and major extensions at most of the centres. Funding for this programme will include
recycling of existing assets as well as the possible introduction of partners into major assets.
Intu also has interests outside the UK including an effective interest of 9 per cent in Equity One, a US
retail REIT, a 32 per cent interest in Prozone, an Indian shopping centre developer, and a joint
venture in Spain for pre-development activity on three major sites under option, in Malaga, Valencia
and Vigo.
Over 80,000 people are employed at Intu centres across the UK and the company is fully committed
to supporting local communities and the wider environment through meaningful and hands-on
initiatives.
For further information see intugroup.co.uk
3: Canada Pension Plan Investment Board
Canada Pension Plan Investment Board (CPPIB) is a professional investment management
organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current
benefits on behalf of 18 million Canadian contributors and beneficiaries.
In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private
equities, real estate, infrastructure and fixed income instruments.
Headquartered in Toronto, with offices in London and Hong Kong, CPPIB is governed and managed
independently of the Canada Pension Plan and at arm's length from governments.
At June 30, 2013, the CPP Fund totalled C$188.9 billion of which C$20.9 billion represents real estate
investments. For more information about CPPIB, please visit www.cppib.com.
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