Pradera acquired the two hypermarket assets on behalf of German pension fund Nordrheinische Ärzteversorgung (NAEV), whose real estate fund is administered by Universal-Investment Luxembourg. The new acquisitions will be added to the existing six assets to create a portfolio of eight assets in northern Spain with a value in excess of €200m.
Pradera advised Universal-Investment on the acquisition and has been retained by Universal-Investment to manage the new properties together with the existing portfolio under a long-term asset and property management contract.
The Eroski hypermarkets were first acquired in 2018 by ICG’s Sale and Leaseback Fund (ICG SLB I). The assets are located in the Spanish regions of Vitoria and Leioa and together total nearly 30,000 sq m, let on long leases to the Eroski Group. They are the first two assets to be sold by ICG SLB I.
Chris Nichols, Portfolio Manager at ICG said: “We are delighted with the first disposal from the SLB Fund, which is an excellent result for our investors. This part sale of our Eroski portfolio has crystalised a material outperformance and endorses our core thesis of value creation through the acquisition of mission critical real estate. The food retail sector remains highly sought after, demonstrating its durability throughout the pandemic. Grocery real estate investments across both Europe and the UK remain a key target for us as we continue to build of the success of the Sale and Leaseback Fund in 2022.”
Peter Davies, Fund Director at Pradera, added: “The successful purchase of these two new assets in northern Spain complements the existing portfolio of six assets that we acquired on Universal-Investment’s behalf at the end of 2020. The acquisition of these hypermarkets is part of a European long income, grocery-focussed investment strategy on behalf of NAEV, designed to deliver sustainable returns in one of real estate’s most sought-after asset classes. We will continue working with Universal-Investment and NAEV to source similar assets with comparable characteristics in other European countries. We believe this sector of the retail property investment market offers strong fundamentals particularly to those investors seeking more stable returns in such uncertain times, and it will be our focus for further investment during the course of 2022 and beyond.”
Colin Campbell, Chairman of Pradera, also commented: “The acquisition of this additional portfolio on behalf of our client NAEV underlines our ability to source off-market transactions in a highly competitive sector of the retail property market. We will continue to build our capability in this sector having already identified a number of new opportunities in the retail real estate long income market.”