CaixaBank, ING back Lar Espana with €87m for Spanish shops

CaixaBank and ING Real Estate Finance have provided a total of €87.3m to Spanish REIT Lar Espana Real Estate for its purchases of El Rosal and As Termas shopping centres, both in northwest Spain.

CaixaBank’s loan, which is the bulk of the total, is for 15 years.

Lar Espana bought El Rosal in Ponferrada earlier this month from British private equity fund manager Doughty Hanson with a combination of bank financing and equity totaling €87.5m.

El Rosal opened in 2007 and key anchors include Carrefour hypermarket, Zara and H&M fashion outlets, and a 7-screen cinema.

Lar Espana bought the As Termas shopping centre in Lugo, Galicia, for €67m in April. Open since 2005, tenants include fashion brands H&M and Cortefiel, and consumer electronics retailer Media Markt.

Lar Espana also bought the Megapark Barakaldo retail park and factory outlet in Bilbao this week from Oaktree Capital Management for €170m.

Megapark Barakaldo was part of FMS Wertmanagement’s €750m Project Gaudi, which comprised of 18 loans made on hotels, shopping and leisure centres, business parks and development sites across Spain. Oaktree won the portfolio in June.

Tenants at Megapark Barakaldo include Decathlon sports retailer and Toys R Us. It is 100% let.

Lar Espana, which is managed by investor and developer Grupo Lar, also launched a share issue this week to raise €135m. The company will issue up to 20m new shares at €6.76 each.

The proceeds will be used to fund further acquisitions.

“This transaction will allow us to take advantage of current target investment opportunities in the real estate market and to be more efficient, on the back of our larger size,” said José Luis del Valle, chairman of Lar Espana.

“We aim to have all of the funds invested before the end of 2015, achieving a total investment size above €1bn.”

In January, Lar Espana became the first Spanish REIT to issue a bond with a €140m launch of seven-year bonds, with a 2.9% coupon, to finance purchases.