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Vukile furthers Spanish retail investment with €80.6m shopping centre acquisition

Vukile Property Fund has acquired the Habaneras Shopping Centre in Torrevieja, Spain for €80.6m through its 98.7%-owned Spanish REIT subsidiary Castellana Properties Socimi SA.
Habaneras Shopping Centre
Habaneras Shopping Centre

Vukile entered the Spanish retail property market in July 2017, announcing it had acquired 11 Spanish retail parks for €193m via Castellana, and then went on to complete the acquisition of another two retail parks in December 2017 for €70m. It has also set up a strong in-country management team and operational platform.

Laurence Rapp, CEO of Vukile Property Fund, comments: “We entered the Spanish market less than a year ago and have made swift progress in growing an investment of scale and substance in Spain. Our Spanish retail property exposure is now nearing €400m, and comprises quality assets located in territories with good growth metrics. The acquisition of Habaneras Shopping Centre is another landmark step in reinforcing Castellana’s position as a significant participant in the Spanish market.”

Habaneras Shopping Centre
Habaneras Shopping Centre

50% debt-funded

Castellana acquired the 24,158m2 Habaneras Shopping Centre for €80.6m at a net initial yield of 6.1%. This represents a cash-on-cash yield to Castellana of 8.37% for the 2019 financial year. The transaction is 50% funded with debt, provided by Aareal Bank, and equally with cash from Vukile from existing available funds.

Developed in 2005 and refurbished in 2014, Habaneras is 93.3% occupied, with nearly half of its space dedicated to fashion, including a significant collection of Inditex brands. Some 92% of the centre’s tenants are national brands. It has weighted average lease termination of 6.1 years to expiry and 3.8 years to the next breaks.

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