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62 // iberian.propery / 2017
dossier// ISSUE: TOP IBERIAN Investors
Opportunistic investors start to leave the stage
This operation arises in the wake of the divestment process the fund is
also executing in Spain, where it is selling, individually, the eight shopping
centres in the Alicante, Malaga, Barcelona and Madrid areas, which were
part of the portfolio purchased from the Dutch fund Vastned less than
three years ago, for 160million euros. Indeed, thiswas the case in the deal
closedwith Lar España Real Estate last August, who purchased the shop-
ping centreVistahermosa inAlicante for approximately 42.5 million euros.
Baupost’s strategy exemplifies a trend that is taking place in the Iberian
shopping centre market, where international funds with an opportunistic
profile are now starting to exit the stage, divesting assets they purchased
at sale prices during the crisis, for a good profit margin.
Another well-known example is Lone Star Funds which, after taking over
the property portfolio of the bankrupt Chamartin Imobiliária in Portugal
in 2015 for about 500 million euros, sold three of the shopping centres
that same year (Vila Real, Coimbra and Porto) to Deustche AM.
Yields drop to record lows
Last year registered a slight yield compression in retail across virtually all
of Iberia. In Spain, and in the case of «
gold
» shopping centres, Aguirre
Newman reported that in 2016, a number of operations were closedwith
initial yields below 4%, a new record low. However, forecasts indicate that
these rates shall generally remain between 4 and 4.5% throughout this
year. Meanwhile, in Portugal, retail yields are also on a downward trajec-
tory, reaching 5% at the end of 2016, according to Cushman &Wakefield.
Slight growth in supply
The Iberian shopping centre market has reached maturity, which is why
the growth in supply has been moderate and, in 2017, is not expected
to surpass 330.400 m² of new GLA.
In Spain, approximately 235.000 m² of new stock is expected, 80% of
which is part of new projects, while the remaining 20% represents pro-
jects to expand existing shopping centres, estimates Aguirre Newman.
However, data by AECC – Associação Espanhola de Centros Comerci-
ais indicates that, between 2017 and 2019, 27 new projects are due to
launch, namely openings and expansions, adding more than 1.3 billion
m² to the national stock.
These numbers differ greatly from the pipeline for Portugal where, until
the end of the year, only 95.400 m² of new GLA is due to open, most
of which (83.000 m²) belongs to Mar Shopping, the second shopping
centre developed by InterIkea Centres in the country and due to open
in the Algarve on September 27. Here, over the next few years, growth
in supply is expected to remain slow and will take place through ex-
pansions, namely of shopping centres such as NorteShopping, Oeiras
Parque and Centro Colombo.
Metromar Shopping Center, Seville
In the first quarter of
2017 the investment
in shopping centres
totalled more than 1.3
billion euros in Iberia