Schroder Eur Real Est Inv Trust PLC Acquisition of Shopping Centre in Seville, Spain (8749F)
23 May 2017 - 4:00PM
UK Regulatory
TIDMSERE
RNS Number : 8749F
Schroder Eur Real Est Inv Trust PLC
23 May 2017
23 May 2017
SCHRODER EUROPEAN REal estate investment trust plc ACQUIRES
SHOPPING CENTRE IN SEVILLE, SPAIN
-First addition to portfolio outside core markets of France and
Germany-
Schroder European Real Estate Investment Trust plc ("SEREIT" or
the "Company"), the company investing in European growth cities,
has completed the purchase of the Metromar shopping centre in
Seville, Southern Spain, from UBS Asset Management. The total
purchase price is approximately EUR52.5 million, reflecting a net
initial yield of 6.2%. SEREIT is acquiring a 50% stake in joint
venture with the Schroder advised Immobilien Europa Direkt
("IED").
Seville is the capital of Andalucía and Spain's fourth largest
city and is an important tourist destination. The city is expected
to outperform national averages in terms of both economic growth
and consumer spending over the next five years[1].
The 23,500 sqm shopping centre is let to 50 tenants, with a
significant convenience retail offering, anchored by a 2,300 sqm
Mercadona grocery supermarket. The discretionary retail tenants
include Zara, Mango, Sfera, H&M, Pull & Bear, Stradivarius,
Bershka and Cortefiel. The centre has a significantly enhanced
leisure offering compared with other similar centres in the region,
anchored by a 12 screen cinema and a number of restaurants. This is
reflected by the centre's annual footfall of circa four million
people, of which 50% are classified as 'walk-in'.
Metromar's sales growth over the past three years has been
robust: 4% in 2014; 8% in 2015; and 4% in 2016. This reflects the
quality of the tenant base and its dominant position within the
growing residential suburb of Mairena del Aljarafe.
Located alongside the Ciudad Expo metro station, Metromar also
benefits from good road access, with the A-8057 (33,000 cars a day)
and SE-30 (Seville's primary ring road) within close proximity. The
centre is located in a densely populated area, with a catchment of
60,000 people in the immediate vicinity, and a further 250,000
within a 15 minute drive.
The asset is 90% let by area (98% by ERV) and generates an
annual rent roll of EUR4 million. The current weighted average
lease term is nine years (and three years to first lease break) and
the leases are subject to annual rent indexation.
The business plan for Metromar is to maximise investment returns
through a combination of maintaining the current, high occupancy
level and undertaking a number of asset management initiatives to
improve the vibrancy and consumer experience. Several opportunities
have already been identified to increase income returns through
improving both the attractiveness of the centre and its dominant
position in south-west Seville.
This is the ninth acquisition by SEREIT, which has now invested
EUR212 million at a blended net initial yield of approximately
6.2%, in established Western European growth cities.
The acquisition is being part funded with a new loan facility
secured against the asset. The loan for the whole property is
EUR23.4 million (SEREIT share EUR11.7 million), representing a loan
to value of approximately 45%. The loan term is seven years and the
interest rate is fixed at 1.76% p.a. SEREIT now has total third
party loans of EUR60.4 million, representing an overall loan to
value across the Company of 26% at an average weighted interest
rate of 1.30%
Tony Smedley, SEREIT Fund Manager, commented:
"With retail expected to be a key beneficiary of Spain's
economic recovery, this acquisition is a welcome addition to the
portfolio, offering significant diversification for our investors
whilst growing our dividend yield.
"We have been tracking this opportunity for some time and are
pleased to complete the purchase. The property has a strong
occupational track record, is located in one of the region's
fastest growing conurbations and fits with the wider portfolio
strategy to acquire accretive assets that offer an attractive
income profile with additional asset management potential.
"We are excited to be delivering on our stated IPO strategy,
building a considerable portfolio of diverse assets that are set to
be beneficiaries of the improving economies and long term
urbanisation theme being witnessed across the European cities in
which the Company is invested."
Enquiries:
Duncan Owen/Tony Smedley
Schroder Real Estate Investment Management Limited Tel: 020 7658 6000
Ria Vavakis
Schroder Investment Management Limited Tel: 020 7658 2371
FTI Consulting
Dido Laurimore/Richard Gotla/ Ellie Sweeney Tel: 020 3727 1575
JSE Sponsor: PSG Capital Proprietary Limited
[1] Oxford Economics, February 2017
This information is provided by RNS
The company news service from the London Stock Exchange
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