Vukile Property Fund subsidiary Castellana Properties, through its own 70%-owned subsidiary Caminho Propício, is to acquire the Forum Madeira shopping centre in Funchal, Portugal for €63.3m.
Camino will acquire the centre from German alternative investment fund manager DWS Grundbesitz, which is owned by real-estate investment fund Grundbesitz Global.
Forum Madeira is an established shopping centre located on the island of Madeira, comprising a total gross lettable area (GLA) of 21,472m2. It is situated in the western part of Funchal, which is the capital city and the main residential and commercial area of Madeira, Vukile said in a statement on Friday.
The centre is distributed on three floors and is well-anchored by the Inditex group, Pingo Doce and the most popular cinema on the island, Cinema NOS.
The centre, which is 100% occupied, boasts footfall of 5.4-million visits and strong sales per square metre of €4,694 (R102,438), serving a catchment of about 250,000 residents as well as 2.3-million tourists annually.
Vukile said the acquisition offered the opportunity to acquire a high-performing shopping centre on the island of Madeira, with low effort rates and high sales levels, showing strong potential for continued growth.
Madeira has been a leading growth area in Portugal, where GDP growth on the island has been 23.4% since 2019. In 2023, Madeira registered over 10.9-million overnight stays, which makes it the third most-visited destination in Portugal, after Porto and Lisbon.
The centre offers opportunities to improve net operating income and overall quality by improving the tenant mix through the introduction of new tenants, Vukile said.
The effective date of the acquisition is expected to be no later than April 30 and the purchase consideration will be settled by Caminho in cash.
The acquisition will be funded by a combination of existing cash resources and in-country debt of €28m, representing a loan-to-value ratio of about 38.5%.
SA-based Vukile owns a portfolio of shopping malls predominantly in townships and rural areas in the home market, while the Spanish assets are held in the Madrid-listed subsidiary Castellana, in which Vukile has a 99.5% interest.
Through its 99.5%-held Spanish subsidiary Castellana, Vukile grew its asset base in Spain and Portugal by nearly 60% in the year ended March.
It exited its investment in Lar España at a profit of €82m and then acquired the iconic Bonaire Shopping Centre in Spain’s Valencia province. The group entered Portugal with four high-quality retail acquisitions.
“All-in-all, the Iberian portfolio grew around 60% over the 12 months, cementing Vukile’s dominant position across two of Europe’s strongest economies − Spain and Portugal. About two-thirds of Vukile’s assets and 60% of earnings are now offshore, Vukile said previously in a pre-closing update.
Some of its local shopping centres include East Rand Mall and Daveyton Mall in Gauteng, Hammarsdale Junction, Phoenix Plaza, KwaMashu Shopping Centre and Pine Crest in KwaZulu-Natal and the Atlantis City Shopping Centre in the Western Cape.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.