AM (formerly Amstelland MDC) has completed a contract to sell the shopping center Forum Coimbra, located in central Portugal, to ING Real Estate Investment Management. The total investment value of this project is approximately €125 million. Construction on Forum Coimbra began in April 2004, and the shopping center is scheduled to open in the spring of 2006.
Forum Coimbra is situated on the Santa Clara plateau across the bridge from the historic city of Coimbra, in the former location of a textile mill. The whole plateau is undergoing impressive development, hosting both new residential developments and new public projects. Forum Coimbra is the focal point of the area, and is expected to become the new center of Coimbra.
Forum Coimbra has a total Gross Lettable Area of 45.000m2, including an owneroperated Carrefour hypermarket of 14.000m2 (which is not included in ING’s investment). Forum Coimbra will feature 146 shops, including 28 restaurants and a 6- screen cinema of Lusomundo, all served by a car park for 2.500 vehicles. Anchor tenants already signed up include Carrefour, Lusomundo, The Inditex (Zara) group, C&A, Hennes & Mauritz and Rádio Popular. Two other anchors are still under negotiation, but the project is already 70% let 18 months before opening.
The Forum Coimbra acquisition is in line with ING Retail Property Partnership Southern Europe’s strategy of investing in and actively managing retail properties in Italy, Spain and Portugal with a focus on rental growth. With this transaction, the fund has built its portfolio to 40% of the 1-billion target size. The portfolio now includes projects in all three countries and has achieved its target allocation to Portugal. The fund, which was launched in May, aims to achieve a target return of 12% to 16% for institutional investors over its seven-year lifetime.
Growth in retail development
This retail project is also consistent with AM’s strategy of growth in shopping center development in Europe. There is a strong demand in Southern Europe for modern shopping centers incorporating leisure facilities, and these projects generate in general better margins than those in the more mature markets in Western Europe. By developing high-quality shopping centers, AM is meeting the needs of Portuguese consumers, international store chains and property investors.