Transactions - APRIL 25, 2017

Union Investment acquires Italian shopping center

by Andrea Waitrovich

Union Investment Real Estate GmbH has acquired the 129 retail outlet shopping center Le Befane, located in the Rimini region on the Italian Adriatic coast. The sales price was not disclosed.

Union Investment has acquired the approximately 35,500-square-meter sales area center for its Open Real Estate Public Fund UniImmo: Europe.

The property opened in 2005 and was visited by around 8.6 million customers in 2016.

Le Befane is the third of a total of four assets from the Melody sales portfolio, which Union Investment secured in December 2016. All properties in this portfolio come from the open-ended CS Euroreal real estate fund, which is managed by Credit Suisse Asset Management Immobilien KAG mbH.

The shops of the shopping center are spread over two levels. A food court and a 65,000-square-foot cinema are located on the upper floor. Among the largest tenants in the property are Zara, Apple, Hollister, Millennium and the Italian electronic provider Unieuro. The Le Befane shopping center also has around 2,700 car parking spaces. There is also a 177,600 square-foot Conad hypermarket on the site of the shopping center, which also increases the attractiveness of the site. This hypermarket is the property of the operator and is excluded from the transaction.

The Italian retail market during the fourth quarter 2016 had positive signals of moderate growth: manufacturing orders are increasing and consumers’ opinions indicate widespread improvement, according to Cushman & Wakefield.

The overall investment volume significantly increased compared to the previous year, making 2016 the best year since the peak recorded in 2007. The retail sector doubled last year’s figure, due to an increased number of opportunities and substantial portfolio transactions. While shopping centers remain the preferred asset class, the high street sector is attracting increasing interest from institutional investors. Retail parks and factory outlets also made up a significant part of retail investment volume.

Cushman & Wakefield expects interest from international investors will remain sustained. Prime assets will continue being appreciated for their resilience, keeping values high, while secondary properties are anticipated to feel more pressure. Retailers’ demand is expected to hold, especially on behalf of mass-market operators, which should keep rents stable.

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