VastNed Retail has acquired full ownership of the 23,000 m² shopping center Madrid Sur, constituting an additional investment of 22.5 million. It already owned the in-house hypermarket and a 50%-stake in the shopping mall. This transaction gives VastNed Retail full control of the center and provides an attractive net initial yield of 6.5%.
Following its 2003 acquisition of the 10,000 m² Eroski operated hypermarket and 50% of the 13,000 m² GLA shopping mall of the Madrid Sur shopping center, VastNed Retail has now acquired the remaining 50% from its joint venture partner Lar Grosvenor.
This transaction puts VastNed Retail in full control of the shopping center, which attracts 7 million visitors on a yearly basis. The center is located in the middle of a well-established catchment area of 250,000 inhabitants and has a high rate of pedestrian footfall. The shopping mall together with the hypermarket gives the catchment area full service in terms of both convenience goods as well as strong branded fashion labels such as Bershka and Kiddy's Class from the Inditex Group, Springfield and Mango.
The center's 2005 net rental income (excluding the hypermarket) is expected to amount to 2.9 million, whilst the center has a marginal vacancy rate of some 2%. The real estate value of the acquired additional 50% amounts to 22.5 million, which results in an attractive net initial yield of 6.5%. The acquisition will contribute to VastNed Retail shareholders' income as from August 1, 2005.
Hans Pars, chief investment officer of VastNed Retail: "We welcome this add-on acquisition with delight in the present tight investment market. Having been involved in the management of this shopping center as from 2003, we know it very well and are confident that this investment will perform well for our company."