Acquisition of Puerto Venecia, Zaragoza, Spain - 24 December 2014
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Acquisition of Puerto Venecia, Zaragoza, Spain 24 December 2014
Acquisition of Puerto Venecia, Zaragoza, Spain Contents • Introduction • Puerto Venecia, Zaragoza • Development opportunities • Appendices This presentation includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Intu Properties plc to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Any information contained in this presentation on the price at which shares or other securities in Intu Properties plc have been bought or sold in the past, or on the yield on such shares or other securities, should not be relied upon as a guide to future performance Page 2
Introduction
Acquisition of Puerto Venecia, Zaragoza, Spain
Investment strategy
• Acquisition of Puerto Venecia, along with our existing ownership of Parque Principado, Oviedo, takes
our ownership to two of the top ten centres in Spain
• Zaragoza in the Aragon region is a centre of economic activity due to its strategic position mid-way
between Madrid, Barcelona, Valencia and Bilbao
• Increases scale of our activities in Spain and provides an excellent platform for our development
options
• Opened during difficult period in Spanish economy with scope to increase rental levels as market
recovers and it becomes fully established in its catchment
• Ownership should benefit Intu’s overall brand and digital positioning
• Puerto Venecia is a major regional day-out destination combining retail, restaurants and leisure which
fits well with Intu’s focus on major regional destinations
Page 4
Acquisition of Puerto Venecia, Zaragoza, Spain
Key facts
• Purchase price €451 million (5.0 per cent net initial yield)
• 50 per cent financed by asset specific bank debt with an all-in cost of debt around 3.5 per cent;
balance from existing resources
• Earnings accretive
• Will give consideration to introducing an investment partner in 2015
• Centre seen as a template for developments in Spain of genuinely regional destinations
– Winner of Best Retail and Leisure Development Worldwide at 2013 Mapic Awards
• Centre has only been open two years and is seeing strong growth in footfall and retailer sales
• Aragon region more affluent than Spanish national average
Page 5
Acquisition of Puerto Venecia, Zaragoza, Spain
Why Spain?
• The regional shopping centre market in Spain offers opportunities to create a quality business of scale
and has the potential to generate superior total returns over the medium term
• Spanish prime shopping centre market fragmented in terms of ownership
• Considerable scope for improvement in shopping centre provision for many major catchments in Spain
• Very limited committed pipeline of prime shopping centre developments
• Spain has returned to economic growth in the past year, with unemployment reducing and improving
consumer confidence
• Strategy is to expand in Spain without diverting significant financial resources from UK pipeline
Page 6
Puerto Venecia, Zaragoza
Puerto Venecia Strategic location with wide catchment area • 200,000 square metres of retail, catering and leisure, including Ikea and El Corte Ingles • 8km South of Zaragoza on the city’s ring road • Zaragoza is the capital of the Aragon region of Spain • Catchment population extends from Aragon into the surrounding regions • Aragon region more affluent than the Spanish national average Page 8
Puerto Venecia The regional retail and leisure destination for Aragon • Shopping centre (opened 2012) and retail park (opened 2008) • Situated over two floors surrounding a central lake • Strong fashion mall and adjoining leisure and restaurant area plus adjacent retail park • Over 200 units • Net rental income €22.4m • Anchored by El Corte Ingles, Primark, Inditex, H&M and Apple; Ikea and Media Markt on retail park • Catering and leisure offer represents around 20 per cent of space, including a cinema, climbing and karting plus over 30 restaurants • Over 10,000 car parking spaces Page 9
Puerto Venecia Quality tenant line up, with almost 90% international/national retailers Page 10
Puerto Venecia – operational performance
Strong operating metrics
• Ratio of total occupancy cost to retailer sales(1) (2) : c 10%
• Average sales / m2 (1): c €2,800
• Lease expiry profile – weighted average 11 years (3 years to first break option)
• Occupancy(3) of approximately 95 per cent for shopping centre and around 90 per cent for retail park
• Footfall: increase of over 15 per cent in last 12 months to an estimated 18 million for 2014
• Long average dwell time of 2.6 hours
• Award winning centre
– Best Retail Park - 2010 Spanish Shopping Centre Awards
– Best Retail and Leisure Development Worldwide – 2013 Mapic Awards
– First shopping centre in Spain to receive Gold certification for sustainability – 2014 LEED
(Leadership in Energy and Environmental Design)
– Touristic Merit Medal – 2014 Government of Aragon
(1) Excludes retail park and Primark
(2) Total occupancy costs includes rent, service charge and property taxes
(3) By rent
Page 11Development opportunities
Development opportunities
Pre development activity at four sites under option
• Top ten key catchments
account for 80 per cent of
retail expenditure in Spain
• Eurofund, Intu’s
development partner, was
closely involved in the
development of Puerto
Venecia, Zaragoza
• Puerto Venecia is the
template for development in
Spain of genuinely regional
destinations in which Intu
specialises (e.g. intu
Trafford Centre)
Page 13Development opportunities Malaga • Have until 15 February 2015 to exercise option, subject to shareholder approval • Plan for shopping resort style development of some 175,000 square metres • Strategic location on Costa del Sol • Three million catchment • In addition, nine million tourists per annum • Strong interest from key retailers Page 14
Concluding remarks
Acquisition of Puerto Venecia, Zaragoza, Spain
Concluding remarks
• Acquisition of Puerto Venecia, along with our existing ownership of Parque Principado, Oviedo, takes
our ownership to two of the top ten centres in Spain
• Zaragoza in the Aragon region is a centre of economic activity due to its strategic position mid-way
between Madrid, Barcelona, Valencia and Bilbao
• Increases scale of our activities in Spain and provides an excellent platform for our development
options
• Opened during difficult period in Spanish economy with scope to increase rental levels as market
recovers and it becomes fully established in its catchment
• Ownership should benefit Intu’s overall brand and digital positioning
• Puerto Venecia is a major regional day-out destination combining retail, restaurants and leisure which
fits well with Intu’s focus on major regional destinations
Page 16Appendices
Spain’s top shopping centres
C&W Total GLA(2) Year
rating Scheme name (1) Province City, Town (sqm) opened Units
La Cañada Málaga Marbella 120,000 1997 210
L'Illa Diagonal Barcelona Barcelona 35,000 1993 172
A La Maquinista Barcelona Barcelona 76,200 2000 227
Parquesur Madrid Leganés 151,200 1989 216
La Vaguada Madrid Madrid 85,500 1983 252
Diagonal Mar Barcelona Barcelona 87,085 2001 197
Gran Plaza 2 Madrid Madrid 57,500 2012 200
A- Madrid Xanadú Madrid Arroyomolinos 152,887 2003 220
Parque Principado Asturias Oviedo 119,514 2001 156
Puerto Venecia Aragon Zaragoza 200,000 2012 206
La Gavia Madrid Madrid 89,660 2007 165
Gran Vía 2 Barcelona Hospitalet de Llobregat 54,000 2002 197
Mataró Parc Barcelona Mataró 62,000 2000 156
B+
Nervión Plaza Andalucía Sevilla 22,450 1998 75
Plaza Mar 2 Alicante Alicante 43,684 2003 120
Plenilunio Madrid Madrid 70,000 2006 200
Source: Cushman and Wakefield.
1. Listed in alphabetical order of scheme name within each category
2. Total destination GLA, in some cases multiple ownerships
Page 18Puerto Venecia
Top 20 tenants by area
Rank Tenant group Area %
1 Conforama 6%
2 Primark 6%
3 Inditex 5%
4 Decathlon 5%
5 Media Markt 4%
6 Cinesa 4%
7 Muebles Rey 4%
8 Dock 39 3%
9 Toys R Us 3%
10 H&M 2%
11 Neverland 2%
12 Deko Palace 2%
13 Gené Karting 2%
14 Camm 2%
15 Tuco 1%
16 Sportzone 1%
17 C&A 1%
18 Sportsdirect 1%
19 Kiwoko 1%
20 Maisons Du Monde 1%
Total 56%
Page 19Puerto Venecia
Lease expiry profile: weighted average 11 years (3 years to first break)
60%
50% 48%
40%
40%
30%
20%
10% 8%
3%
0% 0% 1%
0%
2015 2016 2017 2018 2019 2020-2024 2025+
Page 20Puerto Venecia
Tenant mix (by rent)
Fashion
7%
4% Home Furnishings
4%
30% Restaurants/Catering
5%
Accessories/Shoes/Bags/Jewellery
5%
Sporting Goods
9% Services/Misc
Video/Computer/Electrical
14%
9% Leisure
13% Records/Books/Toys/Gifts
Other
Page 21Puerto Venecia Ground floor plan Page 22
Puerto Venecia First floor plan Page 23
Puerto Venecia Retail Park Page 24
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