US-EU Joint Venture Buys Mall in Madrid

Redevco Iberian Ventures took a majority stake in the Parque Corredor shopping center for $173 million. The retail center is the main shopping destination in Corredor del Henares, metro Madrid’s east corridor.

Parque Corredor
Parque Corredor

Redevco Iberian Ventures, a joint venture between real estate funds managed by Ares Management LP and retail real estate investment manager Redevco, has acquired a majority stake in the Parque Corredor shopping center, one of the largest retail centers in metro Madrid. The acquisition, which was announced last Friday, was valued at about €140 million ($173 million).

The sellers were Sareb, a fund advised by Aermont Capital, of London, and what were described as “various other co-owners of the property.”

At more than 123,000 square meters (1.32 million square feet) of retail and leisure area, Parque Corredor is the main shopping destination in Corredor del Henares, metro Madrid’s east corridor, and attracts more than 10.5 million visitors annually. Completed in 1996, it’s in the municipality of Torrejón de Ardoz. The center’s tenants include a 24,000-square-meter (258,300-square-foot) Alcampo Hypermarket (one of Spain’s largest hypermarkets); fashion brands like Primark, Inditex Group, H&M, Mango, Kiabi and C&A; and a nine-screen Cinesa movie theatre.

Other investors, too, are liking Spanish retail assets. Last March, Hines, in partnership with Universal-Investment, of Germany, acquired two high-street retail centers, one in Madrid and the other in Barcelona, on behalf of a German pension entity. That price tag was about $205 million.

Shopping for shopping centers

Redevco Iberian Ventures was created in September 2015 to target €500 million ($619 million) of value-add and opportunistic investments in Iberian retail properties.

The Parque Corredor acquisition “is representative of our strategy across Europe to acquire quality assets that are in need of investment and repositioning to unlock their value,” Bill Benjamin, partner of Ares Management and head of the Ares Real Estate Group, said in a prepared statement. He noted that the center’s more than 10 million visitors a year make it one of the top 25 retail locations in Spain by footfall.

We expect to invest more than €40 million ($49.5 million) to fully renew the shopping environment, adapting and extending existing shops to meet and exceed tenants’ and shoppers’ requirements,” added Andrew Vaughan, Redevco’s CEO. “The refurbishment plans were already approved by the community of co-owners in July 2017 and have the full support of the center’s longstanding fashion tenants….”

Photo courtesy of Redevco Iberian Ventures