A London Stock Exchange-listed property investment company specialising in European real estate has paid €85.5m (£60.5m) for a portfolio of 16 Spanish supermarkets.
Kennedy Wilson Europe Real Estate (KWE) purchased the stores — 11 operated by the French multinational retailer Carrefour and five by the Spanish discount chain Dia — from a joint venture of French institutional investors managed by AEW Europe.
Funded from KWE’s cash resources, the 16 retail premises cover a combined space of 593,600 sq ft and are made up of seven high street stores and nine ‘big box’ retail warehouses. All have leases set to expire at the end of 2038.
The Carrefour stores, which total 504,300 sq ft, are situated in Aluche, Alcaiá de Henares, Olerdola, Berga, Viladecans, Igualada, Pontevedra, Bilbao, Salamanca, Cádiz and Almería. Seven are warehouse stores and four classed as “convenience” outlets.
Carrefour is Europe’s largest retailer and Spain’s second largest supermarket owner. It operates 10,860 stores across 33 countries. Spain is the retailer’s second largest location with 582 stores.
The 89,300 sq ft of Dia premises — two “big box” and three town centre locations — are located in Granollers, Esparragueras, Dr Fleming, Mora d’Ebre and Rocafort.
Dia, listed on the Madrid Stock Exchange, is the country’s fourth largest supermarket owner and de-merged from Carrefour in 2011. It operates 7,306 stores globally, of which 4,781 stores are in its home country.
“This exciting acquisition represents KWE’s largest purchase to date in Spain and brings our Spanish ownership to €136.8m (£96.6m) or 3.9 per cent of the total portfolio,” commented Kennedy Wilson Europe’s president and chief executive, Mary Ricks.
“The supermarket portfolio benefits from a strong geographic concentration around the affluent areas of Madrid and Barcelona regions, where almost 70 per cent of the income is generated.
“The prime high street units are 29 per cent under-rented at today’s European retail values,” she added. “This, coupled with our ability to grow rents as the economy recovers and Spanish consumer spending improves, and the re-setting to market rents through upward only rent reviews every six years will deliver another lever to create value.”
KWE currently controls a portfolio worth £2bn, primarily invested across office and retail properties in the UK and Ireland. It has built its reputation by unlocking the value of under-resourced real estate across its prime target areas of London, the South East and Dublin.
Savills advised KWE during the Spanish transaction with AEW Europe being advised by CBRE.
