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