The South African fund Vukile Property Fund specializes in commercial real estate and has announced the purchase of a portfolio of nine newly constructed shopping malls across Spain through its new subsidiary, the REIT Castellana Properties, where it holds a 98.3% stake. It is joined in this endeavor by the Morze family, headed by Lee Morze, a South African entrepreneur based in Madrid who has 27 years of experience in the real estate sector.
The transaction totaled 198 million euro, increasing Vukile's international exposure to around 21% of its total real estate assets. With these nine malls, the fund now has eleven in Spain.
To fund the purchase, Castellana has taken out loans from Spanish investors for 94.8 million euro at an interest rate of 1.98%. The remaining 103.3 million were financed from the reserve fund it set up to cover international expansion, which mainly came from the sale of its sovereign portfolio.
According to Vukile executive director Laurence Rapp, this agreement strengthens the fund's investment strategy in the developed markets of western Europe compared to other funds that have focused on emerging markets in eastern Europe.
Rapp believes that the purchase creates a significant solid base in the regions underlines the transparency of the Spanish real estate market and flatters the economy which "currently offers one of the most attractive growth rates in the eurozone, a trend forecast to continue over the coming decade". He also stated that "lower unemployment is stimulating strong economic growth and higher consumer spending".
The nine properties have a total leasable surface area of 117,670 m2 and are spread across Spain. Around 95% of earnings come from 73 retailers, including the main national and international retail brands in Spain such as Media Markt, Sprinter, Worten, Aki and Mercadona. In all, the nine centers only have 2.7% of free space available.
The current managers of Redevco, the company who sold the portfolio, will continue to run the malls for a six-month period, during which time a new experienced team in retail sales will be put in place.
Last updated: 31|07|2017