Orion to cash in on Spanish centre with €400m sale

Orion Capital Managers is to take advantage of the surge of institutional interest and recovery in the debt market in Spain by putting one of the country’s best shopping centres up for sale for €400m, Real Estate Capital can reveal.

The price that is being asked for Plenilunio, the 70,000 sq m mall to the east of Madrid, reflects a 5% yield – another sign of the rapid improvement in values  for prime assets. Cushman & Wakefield is understood to have been appointed to conduct the sale.

Earlier this week TIAA-Henderson Real Estate agreed a deal to buy the 90,000 sq m Islazul centre in the city for €210m from the Lar Group and Ivanhoe Cambridge, reflecting a yield of 5.5%. A successful sale of Plenilunio at a 5% yield would set a new benchmark for the cycle in Spain.

Orion bought Plenilunio in May 2009 for €235m at the bottom of the market from Banif Immobiliare, the Santander-managed real estate fund that froze redemptions earlier that year. The price at the time equated to a yield of 7.5%.

Since then it has completed significant leasing deals including a 6,800 sq m letting to Primark as well as bringing in Mango, Atmosphere and Okeysi.

The centre is owned by Orion’s third real estate fund, which closed in December 2009 with €1.28bn of equity. Orion is now investing its fourth fund which closed four years later having raise a similar amount of capital.

Orion also owns the 2.3m sq ft Puerto Venecia shopping centre and retail park in Zaragoza. It bought half of the centre in January 2011 from a consortium including Tommy Gallagher and Copsica Corporation for an undisclosed price and the remaining 50% from British Land in October last year for €144.5m.

Lenders returning to the country have helped the buoyancy of the Spanish market. The likes of  AXA, Allianz, ING, Société Géneralé, Crédit Agricole and GIC are all looking to join Aareal, Deutsche Bank, Deutsche Pfandbriefbank, Goldman Sachs and Blackstone in lending in Spain whilst domestic banks such as BBVA, Santander, CaixaBank and Sabadell are tentatively returning to the market.

Orion declined to comment.