MERLIN Properties acquires the Marineda City shopping centre in A Coruña for 260 million euros

• The acquisition represents the largest single-asset investment in the shopping centre sector in Spain since 2008
• The shopping centre is the cornerstone of the Marineda City development, Spain’s second-largest shopping and leisure complex boasting approximately 200,000 m2 of GLA
• This is MERLIN’s second acquisition following Tree Inversiones (880 bank branches and 5 buildings leased to BBVA) and demonstrates the company’s commitment to investing in quality assets

MERLIN Properties Socimi S.A., (“MERLIN”) (MC:MRL), one of the largest real estate companies listed on the Spanish Stock Exchange and specialised in the acquisition and management of commercial real estate in the Iberian region, has announced today the acquisition of the Marineda City shopping centre from Invest Cos, owner of the complex and an investee of Manuel Jove, Modesto Rodríguez, José Collazo and Jose Souto. The transaction price, fully financed through MERLIN’s own equity, amounted to 260 million euros and includes the four-star Carrís Marineda hotel located within the complex.

The shopping centre and the hotel, together with IKEA, El Corte Inglés and the Business Centre, constitute the second largest shopping and leisure complex in Spain, in which invested 450 million euros, generating 4,500 direct jobs and 8,000 indirect jobs.

Opened in April 2011, the complex has a built area of more than 500,000 m2, a gross leasable area (GLA) of approximately 200,000 m2 and 6,500 parking spaces. Marineda City has consolidated its position as a benchmark shopping and leisure destination in the northwest of the Iberian Peninsula and has received more than 43 million visitors since opening, making it one of the drivers of the Galician economy in the retail, leisure and hospitality sectors. The popularity of the complex in terms of visitor numbers goes hand in hand with its commercial success in view of its current occupancy rate of almost 100%, with 98% of GLA let out.

Due to its excellent connections both to the centre of A Coruña and the main roads to the rest of Galicia, the catchment area of Marineda City covers a population of almost 2.8 million people. The shopping centre has over 100,000 m2 of GLA and an attractive and balanced retail mix which includes prestigious operators such as Inditex Group’s brands, Primark, H&M, C&A, Decathlon, Bricor, MediaMarkt and Worten. El Corte Inglés and IKEA’s company-owned stores also form part of the Marineda City shopping and leisure centre. The Carrís Marineda City hotel has a surface area of 6,000 m2.

The acquisition price of the shopping centre and hotel reflects a gross yield of 7.1% and an initial net yield, according to EPRA recommendations, of 6.6% (“EPRA topped-up Net Initial Yield”, net of rental discounts) and with potential for future yield growth through improvements in the management of the asset. Following this acquisition, MERLIN’s annual gross rental income amounts to approximately 107 million euros.

Ismael Clemente, Executive Chairman and CEO of MERLIN Properties stated: “The Marineda City shopping centre is an example of an exceptional asset which is rarely found in the market. This asset strengthens MERLIN’s bet on building a portfolio of high-quality assets. MERLIN’s long-term focus and commitment will allow the company to harness the full potential of the property”.

Garrigues, CBRE and Arcadis EC Harris advised MERLIN on this transaction.