Spanish Real Estate Record broken in Xanadú deal

Xanadú shopping center in Madrid has been sold for a record 530 million euros to British capital fund Intu in partnership with Ivanhoe Cambridge. This is the biggest deal ever done on the Spanish real estate market. Along with the mall, the management company of the operation was also acquired.

The purchase of the centre in Arroyomolinos, Madrid, is the biggest shopping center operation in the history of the Spanish market, beating the 495 million paid by Deutsche Bank for Barcelona’s Diagonal Mar in August last year.

Financing for the deal was obtained from Santander, Crédit Agricole, CaixaBank and BBVA and now a partner is sought to take 50 per cent of the asset. A possible ally to take up this offer is Canadian fund CPPIB. This is already a partner of Intu in two Spanish shopping centers – Puerto Venecia in Zaragoza and Parque Principado in Asturias.

THE MASTERPLAN

The deal comes on the back of recent news that over 56,000 jobs were to be created by the development of a huge leisure complex in the municipality of Torres de la Alameda in Madrid. It is also another sign of foreign investor confidence in Spain.

Along with property it owns in Asturias and Zaragoza, Intu is now one of the leading owners of shopping malls in Spain with three of the top 10 centers in the country within its portfolio. Other properties on its books include ventures in Torremolinos, Vigo, Valencia and Palma de Mallorca.

CEO of Intu, David Fischel, said that Xanadú was an excellent asset adding, ‘It is positioned as a destination of leisure and shopping that covers most of Madrid, which fits perfectly with our strategy of focusing on shopping centers of regional magnitude and at the top level, both in the United Kingdom and Spain. We see a great opportunity to strengthen its position as a destination.’

With this new operation, Intu, which also has projects for new centers in Malaga, Valencia, Mallorca and Vigo, has consolidated its position in Spain with one of the trophy shopping centers of Madrid.

DEVELOPING THE DEVELOPMENT

Built in 2003, the center has a total area of 153,695 square meters on two levels and hosts 220 shops representing an occupancy rate of 97 per cent. High profile tenants include include Decathlon, Primark, Apple and Corte Inglés, the Spanish equivalent of Marks And Spencers. About 13 million visitors pass through it each year generating sales of about 230 million euros.

It also boasts the largest indoor skiing facility in Europe and the only one in Spain at 18,000 square meters. In addition it has 15 cinemas, a mini-golf course, a themed mini-park, around 40 restaurants and a bowling alley.

There are further plans to add to these assets with Ivanhoe having signed an agreement with Parques Reunidos this summer to build an Aquarium in the center. Furthermore, the two companies reached an agreement with Viacom International Media Networks, a division of Viacom, to develop a leisure center with Nickelodeon characters in Xanadú.

With these two concepts added, the firm hopes to strengthen the position of the investment and increase its value as a tourist destination. Fischel said the developments would, ‘increase attendance and the average time of visits, building on the level of income and capital returns.’

For more information, please contact corporate law firm Argali Abogados.

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