LONDON Oct 7 British mall owner Intu Properties said it had teamed up with Canada Pension Plan Investment Board to buy a shopping centre in northern Spain, marking the beginning of a partnership with the North American dealmaker.
The two paid 162 million euros ($220 million) for the 75,000 square metre-large Parque Principado Shopping Centre in Asturias, implying a net initial yield of 7.2 percent. The mall, which opened in 2001, is 97 percent occupied and had 9 million visitors in 2012.
Intu said it wanted to attract additional third party capital to help fund its Spanish activities and was exploring the creation of a Spanish REIT for this purpose.
"After a difficult period, the Spanish economy appears to be stabilising. Limited investor competition currently provides a contra-cyclical opportunity to acquire large, high quality centres at historically low pricing," Intu said.
"A further positive feature of the acquisition is entering into partnership with a major and highly regarded global investor, CPPIB, and we look forward to extending this relationship," it said.
CPPIB, Canada's national pension fund, has been actively snapping up real estate across Europe and recent investments include stakes in a Swedish and British shopping centre.
Intu, which owns some of Britain's largest malls, first entered Spain in January 2012 when it purchased an option on a retail development plot from its biggest shareholder, drawing a wave of negative feedback from investors and analysts who questioned the rationale.