Kennedy Wilson Europe has bought a portfolio of 16 Spanish supermarkets. The portfolio, which comprises 11 Carrefour supermarkets and five Dia supermarkets, was acquired from a joint venture between French institutional investors managed by AEW Europe. The purchase price of the portfolio was €85.5m, reflecting a yield on cost of 6.9%. The acquisition was funded from Kennedy Wilson Europe’s cash resources.
The 16 supermarkets comprise 593,600 sq ft of lettable space across seven high street stores and nine big box stores across Spain with a concentration around Madrid and Barcelona regions. The stores are 100% occupied by Carrefour and Dia on triple net leases, generating a day one net operating income of €6.0m with 85% of the net operating income from Carrefour and 15% from Dia. The portfolio has a weighted average unexpired lease term of 5.4 years (23.4 years to expiry) with all the leases expiring on 31 December 2038 with six yearly rolling tenant break options and upward only rent review provisions at this time. The next break option is at 31 December 2020.
Carrefour is Europe’s largest retailer and Spain’s second largest supermarket. It operates 10,860 stores across 33 countries and has a market capitalisation of €18.6bn. Spain is Carrefour’s second largest market by footprint with 582 stores. Carrefour is rated Baa2 with a positive outlook by Moody’s. Dia is Spain’s fourth largest supermarket. It de-merged from Carrefour Group in 2011 and is listed on the Madrid Stock Exchange. It operates 7,306 stores globally of which 4,781 stores are in Spain where it enjoys the second largest market share with 7.9% of sales. It is rated Baa3 with a stable outlook by Moody’s.
KWE : Kennedy Wilson Europe buys Spanish supermarkets