Intu, CPPIB JV Acquires 807 KSF Shopping Center in Northern Spain

Intu Properties and the Canada Pension Plan Investment Board have jointly acquired the Parque Principado Shopping Center in Asturias, Northern Spain, for $220 million.

As Southern Europe continues to struggle with the effects of the economic downturn, Greece, Italy and Spain have been the Eurozone ones hit hardest. However, as investors reshuffle their priorities and search for new opportunities in Eastern Europe and the Nordic markets, it seems that some see potential even in the more downtrodden markets. To that effect, the recent announcement regarding the acquisition of a major retail property in northern Spain has energized analysts present at this year’s EXPO Real in Munich.

The deal was made by a partnership created between British company Intu Properties and the Canada Pension Plan Investment Board, who jointly acquired the Parque Principado Shopping Center in Asturias, in Northern Spain. The total value of the intriguing transaction stands at around 162 million euros, or the equivalent of $220 million.

The asset has a number of attractive features, apart from being an 807,000-square-foot retail spot, the property has a very high occupancy rate, at 97 percent, and visitor numbers stood strong at 9 million for last year. According to a press statement, the acquisition implies a net initial yield of 7.2 percent. The 2001-built shopping mall was acquired by Intu, a company that is currently looking to attract additional funding for a soon-to-be created Spanish REIT, as it plans additional operations in the Spanish retail market.

With the market pointing towards an upcoming stabilization, CPPIB is set to continue its ventures in the European market, and the large acquisition is finally showing some positive signs for Spain’s current real estate status. Intu is the current owner of some of the largest shopping malls in Britain, and has had previous experience with the local market, having purchased an option on a retail development plot, although that move has been criticized by industry specialists.