CBRE GI makes final investment for European Value Add fund

CBRE Global Investors has acquired a 70% interest in H2O Rivas Shopping Centre in Madrid, Spain for an undisclosed amount in the final investment for its European Co-Investment Fund (ECF).

The investment will create a joint venture with the current owner, Alpha Real Trust, which has retained a 30% interest with current manager, Alpha Real Capital continuing to act as operating partner.

This acquisition is the seventh investment for ECF to make the fund fully committed since its final close in February 2016, after raising $840m from a group of North American and European investors. The closed end fund invests in value add real estate across Europe with a focus on building or repositioning assets in the retail and logistics sectors to create core product in supply-constrained markets.

Opened in 2007, H2O shopping centre is located in Rivas Vaciamadrid just south of Madrid and is a 559,723 sq ft centre comprising 130 units across two floors.  Anchor tenants include Nike, Mercadona, H&M, Mango and seven Inditex Group brands, including Zara, Bershka and Massimo Dutti, along with leading cinema operator Yelmo to leave the property at 92% leased currently.

Under the new partner’s ownership, H2O is set to undergo a renovation project which will further strengthen the leisure offer, continue to enhance the tenant mix and consolidate the centre. The recent acquisition of an additional land parcel will also provide potential expansion capacity. 

Alpha Real Trust has also completed the refinance of the borrowings secured on the shopping centre with a new €65m seven year loan with Aareal Bank.

Charles Baigler, fund manager of ECF, said, “This is the seventh investment for ECF and the fund is now fully committed. The acquisition is in line with our strategy of acquiring dominant assets in supply constrained markets which have refurbishment or redevelopment opportunities. We are happy to retain the existing manager, Alpha Real Capital, to deliver the business plan which should allow us to capture the forecast rental growth in the Madrid retail market and create a core, stabilized shopping centre.”

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