Eurocommercial has contracted to acquire the largest shopping center in Cremona, Lombardy, anchored by a Coop hypermarket, for a total cost of 82.5 million including purchase costs, which will give Eurocommercial a net yield of 6.75% from January 2012.
This acquisition marks Eurocommercial's fourth shopping center purchase in the wealthy region of Lombardy and its 10th in Northern Italy as a whole.
The center, known as Cremona Po, opened in 2006 and is situated on the edge of Cremona city center, at the junction of the ring road and the main road leading to Milan, approximately 90 km away.
It was purchased from the same developer that built Curno, the shopping center in Bergamo which Eurocommercial acquired in 1994 and which has been one of the company's most successful acquisitions to date.
The center serves a total catchment of 160,000 people. The primary catchment is prosperous at 125% of the Italian average and with an unemployment rate in 2010 of just 5.4%, significantly lower than the Italian average of 8.4% and slightly below the Northern Italian average of 5.9%. Shopping center density in the catchment area is low by European standards and there are no new developments currently planned.
The Cremona shopping center has a total lettable area of approximately 35,000 m² comprising an Ipercoop hypermarket (not included in the purchase) and a 20,500-m² gallery, in addition to 5,900 m² of external units which are also being purchased by Eurocommercial. The gallery has 64 units fully-let to a range of major international and national retailers including H&M, Oviesse, Expert, Sport Specialist, Pull & Bear and (naturally!) Stradivarius, as well as a seven-screen cinema.
Turnover growth for the 12 months to June 2011 was 2.3% and the average retail rent/m² is around 300. The external units alongside the shopping center are zoned for artisan/retail use and include tenants such as Brico Io.
The Cremona center provides potential for the creation of further value through extending the gallery, enhancing the tenant mix and improving access to the center.
The center is being sold by Coop Lombardia, Gruppo Finim and CMB and the acquisition is expected to complete by the end of September, bringing Eurocommercial's investment in Northern Italy to 41% of the portfolio with France and Sweden at 35% and 24% respectively.
Source: Eurocommercial Properties