Encore+ acquires Makro sale and leaseback portfolio in Madrid, Spain
MADRID (July 30, 2018) — Encore+, the open-ended Continental European real estate fund, has acquired a portfolio of three freehold assets in Madrid on a sale and leaseback-basis; these are occupied by cash-and-carry operator Makro on a 15-year firm lease; LaSalle’s Green lease clauses have been included in the lease agreement. The portfolio comprises wholesale retail with additional office space and was acquired from Makro, a subsidiary of the Metro AG. The three wholesale retail units are situated in the dense urban locations of Paseo Imperial, Barajas and Alcobendas.
Paseo Imperial was built in 2012 to a high technical standard and provides over 3,000m2 (of cash-and-carry on the ground and first floor with over 5,000m2 (of office space across six upper floors, which includes Makro’s Spanish headquarters. The property is located to the south of Madrid’s central business district adjacent to the Mahou-Calderón Project (former Mahaou brewery factory and former Atletico de Madrid Stadium), a major redevelopment that will deliver nearly 120,000m2 of new housing.
Barajas has been Makro’s flagship store since 1972, but and was completely rebuilt to a modern standard in 2015 following a partial rezoning of the site. It provides almost 13,000m2 (of cash and carry area together with 740 car parking spaces. The area boasts one of the biggest shopping centres in the city, Madrid Plenilunio, along with retail warehouses and a new business park.
Alcobendas was last renovated in and provides nearly 13,000m² of warehouse space over basement, ground and mezzanine floors along with 666 parking spaces. It is located to the north of the city in Madrid’s Silicon Valley, which is home to 15,000 companies and benefits from strong road and public transport links.
Jeffrey King, Fund Manager of Encore+ at Aviva Investors, said: “The acquisition is part of our strategy to purchase higher yielding assets and increase the Fund’s exposure to logistics. The combination of its urban location, combined with the sector and aggregate lot size, makes this a good fit for the fund. The portfolio is let to an occupier with a strong covenant and is an attractive lot size in terms of investment liquidity.”
David Ironside, Investment Manager of Encore+ at LaSalle Investment Management, said: “We strongly believe in the future of these three urban locations over the next 15 to 30 years and there is long term upside potential due to several large-scale development projects in the neighbouring areas. The assets will be maintained as cash and carries, but there are multiple opportunities for redeployment as urban logistics centres or redevelopment as new office and residential space in the future. In the meantime, the assets will generate strong and secure income for Encore+.”
Encore+ has a gross asset value of €1.7 billion and was recently recognised as the best performing fund in the IPD PEPFI for 2017. It has also been the top performing fund in the index on an aggregate five-year basis.
LaSalle has recently entered into an agreement to acquire the full ownership of the management of Encore+, including the rights and responsibilities as the Fund Manager. The deal is expected to close by the end of the year. The fund has been jointly managed and run by both parties for eleven years. LaSalle will become the sole manager of Encore+ and David Ironside will become the Fund Manager.
About LaSalle Investment Management
LaSalle Investment Management is one of the world's leading real estate investment managers. On a global basis, LaSalle manages approximately $64 billion of assets in private and public real estate property and debt investments as of Q4 2018. LaSalle's diverse client base includes public and private pension funds, insurance companies, governments, corporations, endowments and private individuals from across the globe. LaSalle sponsors a complete range of investment vehicles including separate accounts, open- and closed-end funds, public securities and entity-level investments. For more information please visit http://www.lasalle.com, and LinkedIn.
NOTE: This information discussed above is based on the market analysis and expectations of LaSalle and should not be relied upon by the reader as research or investment advice regarding LaSalle funds or any issuer or security in particular. The information presented herein is for illustrative and educational purposes and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy in any jurisdiction where prohibited by law or where contrary to local law or regulation. Any such offer to invest, if made, will only be made to certain qualified investors by means of a private placement memorandum or applicable offering document and in accordance with applicable laws and regulations. Past performance is not indicative of future results, nor should any statements herein be construed as a prediction or guarantee of future results.