Merlin Properties has financed the Marineda City shopping centre, the second largest shopping mall in Spain, with a 10-year €133.6m fixed interest rate senior loan from Allianz Real Estate, marking the insurer’s first Spanish commercial property loan.
Merlin Properties acquired the 106,276 sq ft Marineda City shopping centre from Invest Cos for €260m in July 2014, reflecting a net initial yield of 6.6%, and marking the largest single-asset investment in the shopping centre sector in Spain since 2008.
Allianz’s loan reflects a 51.4% loan-to-cost (LTC). At group level, Merlin Properties’ LTV is 39%, well within its maximum leverage of 50%.
Marineda is the leading shopping center in Galicia and the second largest in Spain. Opened in 2011 as part of the “Marineda City” shopping and leisure complex, the entire complex has a built area of over than 500,000 sqm, a gross leasable area of approximately 196,000 sqm and 6,000 parking spaces.
Jorge Valenzuela, director at JLL’s Debt Advisory Capital Markets, said: “This operation demonstrates the ability of the team JLL Debt Advisory attract Spain lenders more competitive in the international market.
“We are very proud to have advised Allianz Real Estate on this funding and very grateful to the trust placed in our team. It is the first time that Allianz Real Estate funds in Spain and the conditions in which it has closed the transaction are innovative.”
Merlin Properties has now deployed the entire €1.29bn of equity raised in its June 2014 IPO, raising the prospect of an imminent second equity capital raising.
Merlin Properties seed portfolio was the acquisition of Tree Inversiones Inmobiliarias, a company which owned 880 bank branches and five office buildings let to for €1.577.5bn.
The Tree portfolio was financed by 10-year term €940m whole loan from a syndicate of banks including CaixaBank, Santander, BNP Paribas, Credit Agricole, Banco Popular and Société Générale. The Tree syndicate facility carried a blended credit spread of 176 basis points.
The combined purchase price of Merlin Properties portfolio is €2.11bn, against which there is €1.14bn debt financing in place. The weighted average maturity is approximately 9.1 years, with a cost of 3.8% until late 2017 and 2.7% thereafter.