ECE fund enters Spain with €290m Intu Asturias deal

German retail specialist ECE confirmed on Tuesday that it has acquired Intu Asturias in Oviedo, Spain, from a 50/50 joint venture of struggling UK retail landlord Intu and Canada Pension Plan Investment Board for a price of €290 mln.

The deal, which was first tipped by PropertyEU in September last year, represents the first foray in Spain by the ECE European Prime Shopping Centre Fund II and means the vehicle is now fully invested.

Following the deal, ECE will be responsible for the asset management as well as centre management and leasing and will continue to work with the current operator of the property, Cushman & Wakefield.
Opened in 2001, Intu Asturias - formerly known as Parque Principado - offers around 140 shops across a leasable area of 74,000 m2 as well as 5,000 parking spaces. The centre is located in the Asturias region, an economically strong region in the northern part of Spain. Anchor tenants include Primark, Media Markt, H&M, an Eroski hypermarket, and the Inditex brands Zara and Bershka.

ECE said that it plans further development of the site including a restructuring and modernization of parts of the center and the addition of further attractive anchor tenants.

'Strong performing shopping centres in continental Europe continue to be of interest to investors, despite ongoing headwinds in the sector. Both Intu Asturias and Intu Puerto Venecia (which was sold just before Christmas) are dominant assets with improving performance,' commented Chris Gardener, head of EMEA Retail Investment, CBRE, which advised on the sale. 'Whilst the retail sector continues to be challenged, investors are beginning to overlook the negative sentiment and are once again demonstrating appetite for assets of the highest quality and this sale is yet another example.'

The sale process was initiated last year by Intu as part of its strategy to exit Spain and raise fresh equity as the troubled landlord deals with the ongoing fallout from retailer failures and asset distress. CPPIB is believed to have decided to sell its half-share alongside its investment partner.

Intu, which has also revealed plans to raise around £1 bn (€1.2 bn) of equity in an emergency rights issue next month, bought the asset back in 2013 together with CPPIB for a price of €141.5 mln, or a net initial yield of 7.2%.

Intu and CPPIB's other flagship mall in Spain - Puerto Venecia in Zaragoza - was sold before Christmas to a joint venture of German investment giant, Union Investment and a shopping centre fund managed by the property arm of Italian insurer Generali for around €475 mln.

Intu Properties and CPPIB paid €451m for the asset in 2015.


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