Acquisition of Puerto Venecia, Zaragoza, Spain 24 December 2014 Acquisition of Puerto Venecia, Zaragoza, Spain Contents • Introduction • Puerto Venecia, Zaragoza • Development opportunities • Appendices This presentation includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Intu Properties plc to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Any information contained in this presentation on the price at which shares or other securities in Intu Properties plc have been bought or sold in the past, or on the yield on such shares or other securities, should not be relied upon as a guide to future performance Page 2 Introduction Acquisition of Puerto Venecia, Zaragoza, Spain Investment strategy • Acquisition of Puerto Venecia, along with our existing ownership of Parque Principado, Oviedo, takes our ownership to two of the top ten centres in Spain • Zaragoza in the Aragon region is a centre of economic activity due to its strategic position mid-way between Madrid, Barcelona, Valencia and Bilbao • Increases scale of our activities in Spain and provides an excellent platform for our development options • Opened during difficult period in Spanish economy with scope to increase rental levels as market recovers and it becomes fully established in its catchment • Ownership should benefit Intu’s overall brand and digital positioning • Puerto Venecia is a major regional day-out destination combining retail, restaurants and leisure which fits well with Intu’s focus on major regional destinations Page 4 Acquisition of Puerto Venecia, Zaragoza, Spain Key facts • Purchase price €451 million (5.0 per cent net initial yield) • 50 per cent financed by asset specific bank debt with an all-in cost of debt around 3.5 per cent; balance from existing resources • Earnings accretive • Will give consideration to introducing an investment partner in 2015 • Centre seen as a template for developments in Spain of genuinely regional destinations – Winner of Best Retail and Leisure Development Worldwide at 2013 Mapic Awards • Centre has only been open two years and is seeing strong growth in footfall and retailer sales • Aragon region more affluent than Spanish national average Page 5 Acquisition of Puerto Venecia, Zaragoza, Spain Why Spain? • The regional shopping centre market in Spain offers opportunities to create a quality business of scale and has the potential to generate superior total returns over the medium term • Spanish prime shopping centre market fragmented in terms of ownership • Considerable scope for improvement in shopping centre provision for many major catchments in Spain • Very limited committed pipeline of prime shopping centre developments • Spain has returned to economic growth in the past year, with unemployment reducing and improving consumer confidence • Strategy is to expand in Spain without diverting significant financial resources from UK pipeline Page 6 Puerto Venecia, Zaragoza Puerto Venecia Strategic location with wide catchment area • 200,000 square metres of retail, catering and leisure, including Ikea and El Corte Ingles • 8km South of Zaragoza on the city’s ring road • Zaragoza is the capital of the Aragon region of Spain • Catchment population extends from Aragon into the surrounding regions • Aragon region more affluent than the Spanish national average Page 8 Puerto Venecia The regional retail and leisure destination for Aragon • Shopping centre (opened 2012) and retail park (opened 2008) • Situated over two floors surrounding a central lake • Strong fashion mall and adjoining leisure and restaurant area plus adjacent retail park • Over 200 units • Net rental income €22.4m • Anchored by El Corte Ingles, Primark, Inditex, H&M and Apple; Ikea and Media Markt on retail park • Catering and leisure offer represents around 20 per cent of space, including a cinema, climbing and karting plus over 30 restaurants • Over 10,000 car parking spaces Page 9 Puerto Venecia Quality tenant line up, with almost 90% international/national retailers Page 10 Puerto Venecia – operational performance Strong operating metrics • Ratio of total occupancy cost to retailer sales(1) (2) : c 10% • Average sales / m2 (1): c €2,800 • Lease expiry profile – weighted average 11 years (3 years to first break option) • Occupancy(3) of approximately 95 per cent for shopping centre and around 90 per cent for retail park • Footfall: increase of over 15 per cent in last 12 months to an estimated 18 million for 2014 • Long average dwell time of 2.6 hours • Award winning centre – Best Retail Park - 2010 Spanish Shopping Centre Awards – Best Retail and Leisure Development Worldwide – 2013 Mapic Awards – First shopping centre in Spain to receive Gold certification for sustainability – 2014 LEED (Leadership in Energy and Environmental Design) – Touristic Merit Medal – 2014 Government of Aragon (1) (2) (3) Excludes retail park and Primark Total occupancy costs includes rent, service charge and property taxes By rent Page 11 Development opportunities Development opportunities Pre development activity at four sites under option • Top ten key catchments account for 80 per cent of retail expenditure in Spain • Eurofund, Intu’s development partner, was closely involved in the development of Puerto Venecia, Zaragoza • Puerto Venecia is the template for development in Spain of genuinely regional destinations in which Intu specialises (e.g. intu Trafford Centre) Page 13 Development opportunities Malaga • Have until 15 February 2015 to exercise option, subject to shareholder approval • Plan for shopping resort style development of some 175,000 square metres • Strategic location on Costa del Sol • Three million catchment • In addition, nine million tourists per annum • Strong interest from key retailers Page 14 Concluding remarks Acquisition of Puerto Venecia, Zaragoza, Spain Concluding remarks • Acquisition of Puerto Venecia, along with our existing ownership of Parque Principado, Oviedo, takes our ownership to two of the top ten centres in Spain • Zaragoza in the Aragon region is a centre of economic activity due to its strategic position mid-way between Madrid, Barcelona, Valencia and Bilbao • Increases scale of our activities in Spain and provides an excellent platform for our development options • Opened during difficult period in Spanish economy with scope to increase rental levels as market recovers and it becomes fully established in its catchment • Ownership should benefit Intu’s overall brand and digital positioning • Puerto Venecia is a major regional day-out destination combining retail, restaurants and leisure which fits well with Intu’s focus on major regional destinations Page 16 Appendices Spain’s top shopping centres C&W rating Scheme name (1) Province City, Town La Cañada L'Illa Diagonal La Maquinista Parquesur La Vaguada Diagonal Mar Gran Plaza 2 Madrid Xanadú Parque Principado Puerto Venecia La Gavia Gran Vía 2 Mataró Parc Nervión Plaza Plaza Mar 2 Plenilunio Málaga Barcelona Barcelona Madrid Madrid Barcelona Madrid Madrid Asturias Aragon Madrid Barcelona Barcelona Andalucía Alicante Madrid Marbella Barcelona Barcelona Leganés Madrid Barcelona Madrid Arroyomolinos Oviedo Zaragoza Madrid Hospitalet de Llobregat Mataró Sevilla Alicante Madrid A A- B+ Source: Cushman and Wakefield. 1. Listed in alphabetical order of scheme name within each category 2. Total destination GLA, in some cases multiple ownerships Page 18 Total GLA(2) (sqm) Year opened Units 120,000 35,000 76,200 151,200 85,500 87,085 57,500 152,887 119,514 200,000 89,660 54,000 62,000 22,450 43,684 70,000 1997 1993 2000 1989 1983 2001 2012 2003 2001 2012 2007 2002 2000 1998 2003 2006 210 172 227 216 252 197 200 220 156 206 165 197 156 75 120 200 Puerto Venecia Top 20 tenants by area Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Total Page 19 Tenant group Conforama Primark Inditex Decathlon Media Markt Cinesa Muebles Rey Dock 39 Toys R Us H&M Neverland Deko Palace Gené Karting Camm Tuco Sportzone C&A Sportsdirect Kiwoko Maisons Du Monde Area % 6% 6% 5% 5% 4% 4% 4% 3% 3% 2% 2% 2% 2% 2% 1% 1% 1% 1% 1% 1% 56% Puerto Venecia Lease expiry profile: weighted average 11 years (3 years to first break) 60% 48% 50% 40% 40% 30% 20% 8% 10% 3% 0% 0% 2015 2016 1% 0% Page 20 2017 2018 2019 2020-2024 2025+ Puerto Venecia Tenant mix (by rent) Fashion 7% Home Furnishings 4% 4% 30% Restaurants/Catering 5% Accessories/Shoes/Bags/Jewellery 5% Sporting Goods Services/Misc 9% Video/Computer/Electrical 14% 9% 13% Leisure Records/Books/Toys/Gifts Other Page 21 Puerto Venecia Ground floor plan Page 22 Puerto Venecia First floor plan Page 23 Puerto Venecia Retail Park Page 24
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