Vukile, through its 99.5% held subsidiary Castellana Properties, will dispose of its shares in Lar España Real Estate Socimi, to Helios RE for €199.95m (R3.8bn).
In July, Vukile said it had received a proposal from a consortium formed between Hines European Real Estate Partners III and a vehicle controlled by Grupo Lar Inversiones Inmobiliarias for its 24-million Lar España shares at a price of €8.10 per share.
Lar Espana is a Real Estate Investment Company listed in Spain, which invests in and operates retail properties across that country.
After a careful evaluation of its strategic alternatives, Castellana negotiated an improved offer price of €8.30 per share with Helios RE, a special purpose vehicle incorporated by the consortium for purposes of executing the offer, Vukile said in a statement on Thursday.
The disposal proceeds are expected to be received by Castellana by the end of December.
The disposal will allow Vukile, via Castellana, to realise a significant return on the Lar Espana investment, generating an internal rate of return of about 45% per annum since January 2022 in rand terms, Vukile said.
“This represents an investment return of almost three times money in a period under three years and presents an opportunity for Vukile to redeploy the disposal proceeds into other strategically aligned and financially accretive opportunities with significantly lower operational and execution risks,” it said.
Vukile said it remained committed to its growth strategy in Spain and the Iberian Peninsula, where it has, through Castellana, established a significant presence and pipeline of opportunities.
Following Vukile’s recent R1.5bn capital raise, and given the significant pipeline of opportunities, with a number under active consideration in both Spain and Portugal, Castellana intends to redeploy the disposal proceeds in line with its expansion strategy in these key markets.
Earlier in September, Vukile announced it is entering the Portuguese market with the acquisition, through Castellana Properties, of a retail portfolio valued at €176.5m.
The acquisition “marks a strategic move to expand its footprint in the country”, the company said.
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.
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