Sonae Sierra, APG, Allianz and Elo create €1.8b Iberian shopping centre JV

Portuguese property and development firm Sonae Sierra has joined with pension giants APG, Allianz and Elo to create a €1.8 bn vehicle invested in prime Iberian shopping centres.

Dubbed Sierra Prime, the new venture comprises six flagship Iberian shopping centres with a total gross asset value of over €3 bn.

The Sierra Prime portfolio includes three assets in Greater Lisbon (Centro Colombo, Centro Vasco da Gama, CascaiShopping), NorteShopping in Greater Porto, Plaza Mayor in Málaga and the recently opened McArthurGlen Designer Outlet Málaga.

Prime opportunities
Sonae Sierra said that the properties - together representing around 380,000 m2 of gross leaseable area - had been selected for their 'remarkably resilient' operating performance through economic cycles, underpinned by full occupancy, high sales density and strong tenant mixes, while offering further growth opportunities through asset management and value creation initiatives.

The vehicle launch extends Sonae's longstanding relationship with APG, its 50:50 partner in the Sierra Fund, which has held these assets to date.

'This is a landmark transaction for the Iberian retail real estate market and for Sonae Sierra. We are pleased to continue our successful and long-lasting partnership with APG and we are excited to welcome Allianz and Elo to join Sierra Prime,' said Fernando Guedes de Oliveira, Sonae Sierra CEO.

Sierra Prime brings in two further institutional investors to further support the portfolio's development and growth, with Germany's Allianz and Finland's Elo each acquiring a 25% stake in the venture from Sonae Sierra and APG, to give all four parties an equal share.

Cash proceeds
The transaction will generate estimated cash proceeds of approximately €525 mln to Sonae Sierra and APG. Sonae Sierra has been managing these properties since inception and said it would continue to provide investment and property management services to the portfolio.

'APG has been an investor in this portfolio of prime shopping centres since 2003. Over the last 17 years the assets have shown their strength and resilience,' said Robert-Jan Foortse, head of APG European property investments. 'Together with Sonae Sierra, all four parties look forward to further support the development and growth of these prime assets.'

'The Sierra prime portfolio underscores our commitment to working with prime partners, investors and stakeholders. We are delighted to build on our relationships with APG, Sonae Sierra and Elo who share our long-term, strategic approach and focus on prime assets,' said Jerome Berenz, head of indirect investments, Allianz Real Estate.

'Shopping centres are a part of Elo’s diversified real estate portfolio and our focus is on the best, locally dominant shopping centres that meet the present and future expectations of customers. We are pleased to make our first Iberian real estate investment alongside leading institutional investors.' said Director Timo Stenius from Elo.

Sonae Sierra and APG were advised by Morgan Stanley and co-advised by Santander, plus law firm Freshfields Bruckhaus Deringer.

Allianz and Elo were advised by the law firm Uría Menéndez and, in respect of Dutch law matters, by De Brauw.


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