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Acquisition of Xanadú Shopping Centre, Madrid, Spain
INTU PROPERTIES PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: ITU
INTU PROPERTIES PLC (intu)
10 MARCH 2017
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
JSE Sponsor:
Merrill Lynch South Africa (Pty) Limited
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.
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