Intu Properties plc - Acquisition of Xanadu Shopping Centre, Madrid, Spain

We are looking to introduce an investment partner into Xanadú and are currently progressing discussions with potential partners.

David Fischel, intu Chief Executive, commented:

“The acquisition of Xanadú is an excellent addition to intu’s growing portfolio of leading regional shopping centres in Spain, taking our ownership to three of the country’s top ten centres and now including one in the country’s capital city. Xanadú’s market position as an attractive shopping and leisure destination covering a major sector of Madrid fits well with our strategy of focusing on prime regional shopping centres in both the UK and Spain. We see a number of compelling opportunities to further enhance Xanadú’s status, such as improving the leisure and catering offering, with a Nickelodeon theme park and an aquarium due to open in 2017, and ensuring an enticing retail mix, which we believe will drive increased footfall and dwell time and ultimately improve rental levels and capital values.”

Investment strategy for Spain

• The acquisition of Xanadú, along with our existing ownership of intu Asturias, Oviedo and Puerto Venecia, Zaragoza, takes our ownership to three of the top ten centres in Spain, positioning intu as one of the leading regional shopping centre landlords in Spain

• The centre fits well with our focus on major regional destinations in both the UK and Spain, such as intu Trafford Centre and Puerto Venecia, offering shoppers a full day out with a wide range of retail, restaurant and leisure opportunities

• Located in the south-west area of Madrid, Xanadú is the major shopping and leisure destination in its core catchment of 1.2 million people that covers some of the wealthiest areas of the city. Average disposable income is 18 per cent above the Spanish average and the unemployment rate is 8 per cent below the national average. The centre is located within one of the fastest growing and densely populated areas of the city

• Our key asset management initiatives for the centre revolve around enhancing its status as a truly regional retail and leisure resort. Improving the catering and leisure along with ensuring that the centre delivers an enticing retail mix will drive increased footfall and dwell time, ultimately improving rental levels and capital values

• The acquisition is expected to be earnings accretive and offers good reversionary potential over the medium term, with further growth opportunity from our key asset management initiatives

Key facts on Xanadú

Xanadú is the retail and leisure destination for the south-west of Madrid and one of the top ten shopping centres in Spain. With direct access onto the main highway from Madrid to Extremadura, it has an annual footfall of 13 million customer visits, with a core catchment of 1.2 million people and further potential from over 4 million people living within a 30 minute drive time.

The centre, which opened in 2003, provides around 220 units with a trading area of 153,000 square metres, comprising:

• a retail mall over two levels, including all the key retailers such as El Corte Ingles, all of the Inditex fascias, Primark, H&M, Apple and Mango

• a strong leisure offering including SnowZone, Spain’s only indoor ski slope, a 15 screen Cinesa cinema and Ilusiona bowling. This will be enhanced by an aquarium and Nickelodeon theme park opening in 2017

• two big box units let to BriCor and Decathlon

• around 8,000 car park spaces

This transaction involves acquiring approximately 119,000 square metres of the scheme, with the remaining area owner occupied by El Corte Ingles.

Occupancy is over 97 per cent.

intu in Spain

In October 2013, when we acquired what is now called intu Asturias, we highlighted that the Spanish shopping centre market offers opportunities to create a quality business of scale which has the potential to generate superior total returns over the medium term. We now own three of Spain’s top ten shopping centres, with Xanadú added to our two existing centres which are generating strong returns.

Similar to our approach in the UK, our aim is to be the leading owner, developer and manager of regionally pre-eminent shopping centre destinations for a significant number of the major areas of Spain. Eighty per cent of the country’s retail expenditure comes from ten key catchment areas.

Ownership of the largest Spanish shopping centres is still fragmented and many regions do not have a prime retail and leisure destination. The committed pipeline of prime shopping centre developments across Spain is at a low level and we believe the opportunity exists to develop and build new schemes in a number of key regions of Spain.

In addition to the three top ten centres that we now own, we also have a development site near Malaga and options on sites in Valencia, Vigo and Palma. We expect to start the construction of intu Costa del Sol, near Malaga, in the next 12 months.

Spanish economy

In recent years, the Spanish economy has had significant growth making it one of Europe’s fastest growing economies. Forecasts suggest that this is expected to continue in 2017. For the consumer, unemployment is at its lowest level for several years and household spending remains solid. This in turn benefits retail sales which are further enhanced by record levels of tourists.

Enquiries

Notes for editors

intu is the UK's leading owner, manager and developer of prime regional shopping centres with a growing presence in Spain.

We are passionate about creating uniquely compelling experiences, in centre and online, that attract customers, delivering enhanced footfall, dwell time and loyalty. This helps our retailers flourish, driving occupancy and income growth. 

A FTSE 100 company, we own many of the UK's largest and most popular retail destinations, including nine of the top 20, with super regional centres such as intu Trafford Centre and intu Lakeside and vibrant city centre locations from Newcastle to Watford.

We are focused on delivering against four strategic objectives: optimising the performance of our assets to deliver attractive long term total property returns, delivering our UK development pipeline to add value to our portfolio, leveraging the strength of our brand and seizing the opportunity in Spain to create a business of scale. 

We are committed to our local communities - our centres support around 120,000 jobs representing about 4 per cent of the total UK retail workforce - and to operating with environmental responsibility.

Our success creates value for our retailers, investors and the communities we serve.