Spanish SOCIMI Lar España has secured a €98.5 million loan to fund the construction of a shopping centre in Seville, against the backdrop of a lending market which has not backed large retail developments since 2007.
The seven-year loan, provided by Banco Santander, Banc Sabadell, Liberbank and Unicaja Banco, has an interest rate of 2.25 percent over Euribor for the first two years and of 2 percent over Euribor for the following five years. The financing was structured as a Special Purpose Vehicle.
“This deal, the first of its kind since the onset of the crisis, marks a turning point in the financing of retail developments in Spain,” said Sergio Criado, chief financial officer of Lar España.
“It therefore reflects the growing confidence of the finance sector, not only in the opening of shopping centres, but also in both private consumption and Spanish economic growth,” he added.
The Palmas Altas retail complex, which is set to open in spring 2019, is now 63 percent pre-let, while occupancy is expected to reach 90 percent by the end of 2018. Lar España has already reached pre-letting agreements with brands including MediaMarkt and Urban Planet; restaurants such as McDonald’s and Starbucks; as well as fashion brands such as Primark, Levi’s, Jack & Jones, and Foot Locker.
Once completed, Palmas Altas will comprise 100,000 square metres of retail and family leisure space, with close to 150 retail units, making it one of the largest retail complexes in Andalusia. Lar España forecasts the retail units at the shopping centre will generate an annual rental income of circa €15 million and will have around 14 million visitors per year.
The retail complex is eight minutes from Seville city centre, in an area which currently lacks any similar retail or leisure offering. Around 60 percent of the total area will be used as retail space, while the remaining 40 percent will offer restaurants, leisure spaces, sports areas and green spaces.