Value on bull run with €120m finance

Barcelona outlet village set for expansion after Value Retail arranges refinancing of €91m loan

Value Retail has refinanced its La Roca shopping outlet village and raised more capital for the Barcelona asset’s expansion.

The company has replaced a €91m loan, which was securitised in Epic Value Retail, with €120m of five-year finance: €80m of senior debt from pbb Deutsche Pfandbriefbank and €40m of junior from Pramerica’s Real Estate Capital 1 Fund.

The loan-to-value ratio all in was “between 50% and 60%”, said Michael Goldenberg, head of Spain at Value Retail. “We are not talking about massive LTVs.” The price of the junior debt was “in the double digits”.

He continued: “The market is very thin in Spain and a lot of domestic lenders have a very high cost of funds, so international lenders were more interesting for us to approach.

“However, very few banks are interested in Spain or in real estate or in any project with development associated with it.”

La Roca will be expanded with another 25-50 boutiques by 2014. It has achieved a double-digit yield increase nearly every year since opening in 1998.

The company manages nine villages, including Bicester Village in the UK and Las Rozas near Madrid, both of which were securitised by Royal Bank of Scotland in the same CMBS but with different loan maturity dates.

Bicester was refinanced with a club of banks in late 2009; Las Rozas will be refinanced nearer the loan maturity in 2014.

Bernhard Scholz, of Deutsche Pfandbriefbank’s management board, said the deal showed the bank would back Spanish deals, “where we will selectively finance quality assets managed by first-line sponsors”.

The bank has also just lent €29m to Rockspring PIM to acquire Abadia Retail Park in Toledo, which opened in November 2011.