Elo enters into Sierra Prime, a €1.8Bn strategic joint venture invested in prime Iberian shopping centres

Elo, Sonae Sierra, Allianz and APG have entered into an agreement to form a new strategic joint venture comprised of 6 flagship Iberian shopping centres with a total gross asset value of above €3.0Bn (€1.8Bn on a proportional basis).

The Sierra Prime portfolio includes three assets in Greater Lisbon (Centro Colombo, Centro Vasco da Gama, CascaiShopping), NorteShopping in Greater Porto, Plaza Mayor in Málaga and the recently opened McArthurGlen Designer Outlet Málaga.

“Shopping centres are a part of Elo’s diversified real estate portfolio and our focus is on the best, locally dominant shopping centres that meet the present and future expectations of customers. The well-managed Sierra Prime JV is a good fit for Elo’s investment strategy and the real estate portfolio. We are pleased to make our first Iberian real estate investment alongside leading institutional investors”, said Director Timo Stenius from Elo.

The properties – together representing c. 380,000 sqm GLA – consists of leading shopping centres in prime locations in Portugal and Spain, attracting in total approximately 90 MM visitors each year. The portfolio has experienced resilient operating performance through economic cycles, underpinned by full occupancy, high sales density and strong tenant mix. Several of the centres also feature NOI growth opportunities through development initiatives.

“Sierra Prime’s destination shopping centres offer a combination of leisure activities, food and beverage as well as more traditional retail offering that caters to both local demand and tourists. All centres are well-located in their respective catchment areas.”

Following a successful and long-standing 50/50 partnership in the Sierra Fund, Sonae Sierra and APG on behalf of its pension fund clients have decided to form a new long-term joint venture – Sierra Prime – solely focused on these 6 properties*  and to bring two new leading institutional investors – Elo and Allianz – to further support the development and growth of the portfolio. Each investor will have a 25% economic interest in the joint-venture and the transaction will generate estimated cash proceeds of approximately €525MM to Sonae Sierra and APG.

Sonae Sierra has been managing these properties since inception and will continue to provide investment and property management services to the portfolio.

The Sonae Sierra stock exchange release >

* The portfolio comprises 50% interests in Centro Colombo, Centro Vasco da Gama, NorteShopping and McArthurGlen Designer Outlet Málaga and 100% interests in CascaiShopping and Plaza Mayor.