Savills IM buys two supermarkets in Spain for European food retail strategy

Savills IM buys two supermarkets in Spain for European food retail strategy

Savills Investment Management has acquired two new Aldi supermarkets in Spain for its European food retail strategy. The purchase price was not disclosed.

The strategy now has capital commitments from German institutional investors of around €370 million, raised since 2020.

The first supermarket in Alzira, Valencia was acquired from developer Ten Brinke at the end of June and comprises around 1,660 sqm of lettable space. The asset benefits from growing local demand for food retail and has leading food retailer Aldi secured as a long-term tenant for the entire space. Eversheds Sutherland, Arcadis, and PwC acted as advisors for the transaction.

The second, newly constructed property in Aranjuez, south of Madrid, has around 1,770 sqm of lettable space and was acquired from developer OMO Retail at the end of 2022 as part of an off-market transaction. The location benefits from its proximity to Madrid and a fast-growing retail market in the region. The property is also fully let to Aldi on a long-term lease. The building has been constructed to high ESG standards. A photovoltaic system has been installed on the roof, and electric vehicle charging stations and bicycle parking are part of the on-site amenities. Savills Investment Management was advised for the transaction by CMS, Arcadis, and PwC.

Kathrin Michalzik, Portfolio Manager at Savills Investment Management, says: “With these two supermarket properties in Spain, we have added further modern assets to the portfolio of the European food retail strategy, both of which are let long-term to a retailer with a strong credit rating. The strategy, which is already broadly diversified across seven countries, still has further equity available for investments. We are therefore continuing to look for investment opportunities in thriving locations in Spain, Portugal, Italy, the UK, Ireland, Benelux, and the Nordics.”

Ian Jones, Director of Investment at Savills Investment Management, adds: “Despite the challenging market conditions, we continue to invest judiciously in properties with the characteristics of modern construction, dedicated catchments, and strong occupiers. In addition to these acquisitions in Spain, a new supermarket property located at the heart of the rapidly expanding Adamstown district of Dublin was acquired by forward purchase and let to Aldi and Tesco and transferred to the portfolio. The Nearly Zero Energy Building (NZEB) has achieved high energy performance ratings, BER A2 and A3 respectively, providing cost savings to tenants. The building is all electric with no on-site carbon emissions from fossil fuels and the solar energy generation on-site will further reduce operational carbon emissions and energy costs.”

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