Encore+ has acquired a portfolio of three freehold assets in Madrid on a sale and leaseback-basis occupied by cash-and-carry operator Makro on a 15-year firm lease. The portfolio comprises wholesale retail with additional office space and was acquired from Makro, a subsidiary of the Metro AG. The three wholesale retail units are situated in the dense urban locations of Paseo Imperial, Barajas and Alcobendas. The purchase price was not disclosed.
Paseo Imperial was built in 2012 to a high technical standard and provides over 3,000m² of cash-and-carry on the ground and first floor with over 5,000m² of office space across six upper floors, which includes Makro’s Spanish headquarters. The property is located to the south of Madrid’s central business district adjacent to the Mahou-Calderon Project, a major redevelopment that will deliver nearly 120,000m² of new housing.
Barajas has been Makro’s flagship store since 1972, but and was completely rebuilt to a modern standard in 2015 following a partial rezoning of the site. It provides almost 13,000m² of cash and carry area together with 740 car parking spaces. The area boasts one of the biggest shopping centres in the city, Madrid Plenilunio, along with retail warehouses and a new business park.
Alcobendas was last renovated in and provides nearly 13,000m² of warehouse space over basement, ground and mezzanine floors along with 666 parking spaces. It is located to the north of the city in Madrid’s Silicon Valley, which is home to 15,000 companies and benefits from a strong road and public transport links.
Jeffrey King, Fund Manager of Encore+ at Aviva Investors, said: “The acquisition is part of our strategy to purchase higher-yielding assets and increase the Fund’s exposure to logistics. The combination of its urban location, combined with the sector and aggregate lot size, makes this a good fit for the fund. The portfolio is let to an occupier with a strong covenant and is an attractive lot size in terms of investment liquidity.”
David Ironside, Investment Manager of Encore+ at LaSalle Investment Management, said: “We strongly believe in the future of these three urban locations over the next 15 to 30 years and there is long-term upside potential due to several large-scale development projects in the neighbouring areas. The assets will be maintained as cash and carries, but there are multiple opportunities for redeployment as urban logistics centres or redevelopment as new office and residential space in the future. In the meantime, the assets will generate strong and secure income for Encore+.”
