Lar Espana has secured €98.5m facility to fund the construction and launch phases of the Palmas Altas retail and family leisure complex. The seven-year loan was granted by Banco Santander, Banc Sabadell, Liberbank and Unicaja Banco with an interest rate of Euribor+2.25% for the first two years and +2% for the following five. The financing was structured as a Special Purpose Vehicle (SPV). This is the first time since 2007 that a retail property of this size has received bank financing.
Sergio Criado, CFO of Lar Espana, commented: “This deal, the first of its kind since the onset of the crisis, marks a turning point in the financing of retail developments in Spain. It, therefore, reflects the growing confidence of the finance sector not only in the opening of shopping centres but also in both private consumption and Spanish economic growth.”
Palmas Altas comprises 100,000m² of retail and family leisure space with close to 150 retail units. The retail complex, which is set to open in spring 2019, is already 63% pre-let, with this figure is expected to reach 90% by the end of 2018. The company forecasts that the retail units at Palmas Altas will generate an annual rental income of circa €15m and will have around 14 million visitors a year.
Palmas Altas is located in an expansion area of the city that currently lacks any similar retail or leisure offering. It is eight minutes from Seville city centre, which provides the shopping centre with a catchment area of 1.5 million people. Besides, around 15 million tourists – potential visitors to Palmas Altas - visit Seville every year.
Around 60% of the total area will be used as retail space, while the remaining 40% will offer restaurants, leisure spaces, sports areas and green spaces. Lar Espana has already pre-letting agreements with brands including Mercadona, MediaMarkt, Yelmo Cines and Urban Planet, with restaurants such as McDonalds, 100 Montaditos, Starbucks, Friday’s and several Andalusian restaurants, as well as fashion brands such as Primark, Levis, Jack & Jones, Deichmann and Foot Locker. Palmas Altas’ retail and leisure offer aspires to become a sectorial reference both nationally and at a European level.
The Palmas Altas project will create 4,800 new jobs – 1,500 related to its construction and 3,300 to permanent roles at the shopping centre – providing both an invaluable boost to the local economy and a new source of employment in Seville. Palmas Altas also has a special commitment with the environment. It already has the BREEAM certificate, which stands for sustainability and reduced CO2 emissions.
Once completed, Palmas Altas will be the SOCIMI’s highest-valued asset to date, one of the largest retail complexes in Andalusia and the greatest urban property investment in Seville in the last decade.