Wrap Text
Schroder European Real Estate Investment Trust Plc Acquires Shopping Centre In Seville, Spain
Schroder European Real Estate Investment Trust PLC
(Incorporated in England and Wales)
Registration number: 09382477
JSE Share Code: SCD
LSE Ticker: SERE
ISIN number: GB00BY7R8K77
23 May 2017
SCHRODER EUROPEAN REAL ESTATE INVESTMENT TRUST PLC ACQUIRES
SHOPPING CENTRE IN SEVILLE, SPAIN
-First addition to portfolio outside core markets of France and Germany-
Schroder European Real Estate Investment Trust plc (“SEREIT” or the "Company"), the
company investing in European growth cities, has completed the purchase of the Metromar
shopping centre in Seville, Southern Spain, from UBS Asset Management. The total
purchase price is approximately €52.5 million, reflecting a net initial yield of 6.2%. SEREIT is
acquiring a 50% stake in joint venture with the Schroder advised Immobilien Europa Direkt
(“IED”).
Seville is the capital of Andalucía and Spain’s fourth largest city and is an important tourist
destination. The city is expected to outperform national averages in terms of both economic
growth and consumer spending over the next five years.(1)
The 23,500 sqm shopping centre is let to 50 tenants, with a significant convenience retail
offering, anchored by a 2,300 sqm Mercadona grocery supermarket. The discretionary retail
tenants include Zara, Mango, Sfera, H&M, Pull & Bear, Stradivarius, Bershka and Cortefiel.
The centre has a significantly enhanced leisure offering compared with other similar centres
in the region, anchored by a 12 screen cinema and a number of restaurants. This is reflected
by the centre’s annual footfall of circa four million people, of which 50% are classified as
‘walk-in’.
Metromar’s sales growth over the past three years has been robust: 4% in 2014; 8% in 2015;
and 4% in 2016. This reflects the quality of the tenant base and its dominant position within
the growing residential suburb of Mairena del Aljarafe.
Located alongside the Ciudad Expo metro station, Metromar also benefits from good road
access, with the A-8057 (33,000 cars a day) and SE-30 (Seville’s primary ring road) within
close proximity. The centre is located in a densely populated area, with a catchment of
60,000 people in the immediate vicinity, and a further 250,000 within a 15 minute drive.
The asset is 90% let by area (98% by ERV) and generates an annual rent roll of €4 million.
The current weighted average lease term is nine years (and three years to first lease break)
and the leases are subject to annual rent indexation.
The business plan for Metromar is to maximise investment returns through a combination of
maintaining the current, high occupancy level and undertaking a number of asset
management initiatives to improve the vibrancy and consumer experience. Several
opportunities have already been identified to increase income returns through improving both
the attractiveness of the centre and its dominant position in south-west Seville.
___________________________________
(1) Oxford Economics, February 2017
This is the ninth acquisition by SEREIT, which has now invested €212 million at a blended
net initial yield of approximately 6.2%, in established Western European growth cities.
The acquisition is being part funded with a new loan facility secured against the asset. The
loan for the whole property is €23.4 million (SEREIT share €11.7 million), representing a loan
to value of approximately 45%. The loan term is seven years and the interest rate is fixed at
1.76% p.a. SEREIT now has total third party loans of €60.4 million, representing an overall
loan to value across the Company of 26% at an average weighted interest rate of 1.30%
Tony Smedley, SEREIT Fund Manager, commented:
"With retail expected to be a key beneficiary of Spain’s economic recovery, this acquisition is
a welcome addition to the portfolio, offering significant diversification for our investors whilst
growing our dividend yield.
“We have been tracking this opportunity for some time and are pleased to complete the
purchase. The property has a strong occupational track record, is located in one of the
region’s fastest growing conurbations and fits with the wider portfolio strategy to acquire
accretive assets that offer an attractive income profile with additional asset management
potential.
“We are excited to be delivering on our stated IPO strategy, building a considerable portfolio
of diverse assets that are set to be beneficiaries of the improving economies and long term
urbanisation theme being witnessed across the European cities in which the Company is
invested.”
Enquiries:
Duncan Owen/Tony Smedley
Schroder Real Estate Investment Management Limited Tel: 020 7658 6000
Ria Vavakis
Schroder Investment Management Limited Tel: 020 7658 2371
FTI Consulting
Dido Laurimore/Richard Gotla/ Ellie Sweeney Tel: 020 3727 1575
JSE Sponsor: PSG Capital Proprietary Limited
Date: 23/05/2017 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
