Property group Vukile is entering the Portuguese market with the acquisition of a retail portfolio valued at €176.5m (R3.5bn).
The acquisition, made through its 99.5% held subsidiary Castellana Properties, “marks a strategic move to expand its footprint in the country”, the company said in a statement on Monday.
The portfolio comprises three dominant shopping centres located in Lisbon and Porto, with a total gross lettable area of 74,083m². The centres — RioSul, Loures, and 8ª Avenida — are well-positioned in their catchment areas, with strong footfall and sales ratios, presenting opportunities for growth in net operating income.
The Portuguese retail market is well-supported by customers with a strong shopping centre culture, and the lack of high-street offerings in the country presents opportunities for growth. According to Vukile, the portfolio offers a compelling retail shopping centre platform to build and grow its Portuguese business.
The acquisition is subject to approval by the lenders of the existing in-country asset-backed debt package and is expected to be completed by October 1. Newco, a newly incorporated subsidiary, will acquire the portfolio, with Castellana holding 80% of the shares and RMB Investments and Advisory Proprietary Limited holding 20%.
RioSul, located in southern Lisbon, is a two-story shopping centre with a total gross lettable area of 46,006m². The centre has an annual footfall of close to 8-million people and total annual sales of about €98m.
Loures, located in the suburb of Loures in northern Lisbon, is a two-story shopping centre with a total gross lettable area of 44,745m². It has an annual footfall of about 6-million and total annual sales of €77m.
Located in São João da Madeira, 8ª Avenida is in industrial and manufacturing town south of Porto, and is a two-story shopping centre with a total gross lettable area of 28,923m², with annual footfall of 6-million people and total annual sales of about €58m.
The forecast for the portfolio indicates a net property income of €15.3m for the 12 months to end-March 2026, with a net after-tax profit of €9.7m. The acquisition is expected to deliver a cash-on-cash yield of about 10% and will be funded by a combination of existing cash resources and debt.
Vukile CEO Laurence Rapp said the acquisition offered a compelling retail shopping center platform to build and grow its Portuguese business. “We believe that this acquisition will provide opportunities for growth in net operating income and will be a valuable addition to our portfolio.”
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