UK-based asset manager M&G Real Estate has agreed to acquire 15 Banco Santander branches in Spain, with an option to buy another, in a deal valued at €56 mln.
The vendor is Uro Property Holdings, a Spanish REIT that owns 731 properties mainly leased to Santander in Spain on the basis of a sale-and-leaseback agreement . The portfolio makes up about a third of Santander's network of bank branches in Spain.
Santander, along with CaixaBank and investment firm Atisha, are the main shareholders in Uro Property, which listed on the Alternative Stock Market (MAB) in Madrid in 2015.
Uro said the assets sold to M&G Real Estate generate a total of €3 mln in annual rent income and were disposed of at a 'premium over the last valuation' carried out by CBRE at end-2016.
Nine of the assets designated as the 'green' portfolio have about 20 years to run on their leases (2036 and 2038), while the other seven properties, assigned to the 'blue' portfolio, have leases in the 30-year range, with an option to expend for a further seven years.
Following the sale, Uro will continue to manage the rest of its portfolio of Santander branches valued at €19 bn.
This was M&G Real Estate's second investment in the Spanish market. In 2015, the asset manager acquired the former Madrid headquarters of telecoms firm Telefónica for €175 mln. WPP, a British multinational advertising and public relations company, initially acquired the building at 26, Ríos Rosas from NZ Patrimonio for €150 mln and immediately thereafter sold the asset to M&G Real Estate in a sale-and-leaseback transaction.
Berlin office deal
M&G Real Estate also carried out an investment in Germany this week, acquiring a central Berlin office asset as part of its pan-European growth strategy. This was the purchase of the 22,521 m2 'Badensche Strasse office for €94 m from an entity managed by JP Morgan Asset Management.
David Jackson, fund manager at M&G Real Estate, said: 'Key markets in Europe, and especially Germany, are now experiencing stronger tenant demand and take-up, which is fuelling rental growth. As such, core assets in prime locations in Germany continue to be of interest to our pan-European strategy, as evidenced by our new acquisitions, on the back of a trio of purchases in the country in February.
'We continue to focus on Continental Europe by bolstering our investment capability and expanding our presence through new offices and senior appointments – ensuring we are well placed to act on emerging investment and asset management opportunities, to drive long-term income returns for our investors.'