Intu brings TH Real Estate as partner at Madrid Xanadu

Shopping centre operator Intu Properties announced on Tuesday that both itself and TH Real Estate - on behalf of its pan-European investment vehicle, the European Cities Fund - had agreed to form a joint venture to own Madrid Xanadú shopping centre in Spain.

The FTSE 100 company said the Madrid Xanadú shopping centre is the retail and leisure destination for the south-west of Madrid and one of the top ten shopping centres in Spain.

TH Real Estate will acquire a 50% interest in the joint venture, which includes the centre and the SnowZone business but excludes the management company, for a price of €264.4m.

The centre, which opened in 2003, has an annual footfall of 13 million customer visits and an annual net rental income of €23 million.

Intu said it provides around 220 retail, catering and leisure units, with the two level retail mall including key retailers such as El Corte Ingles, all of the Inditex fascias, Primark, H&M, Apple and Mango.

In addition there is a “strong leisure offering” with SnowZone, Spain’s only indoor ski slope, a 15 screen Cinesa cinema and Ilusiona bowling, with the leisure offer set to be enhanced by an aquarium and Nickelodeon indoor theme park which are under development.

Intu acquired Madrid Xanadú in March 2017, stating at the time that it would look to introduce an investment partner.

The purchase price being paid by TH Real Estate excluded the management company, and equated to 50% of the price paid by Intu to entities of the Ivanhoé Cambridge Group.

Intu said it would use the net proceeds of the transaction to repay debt on its revolving credit facility.

The joint venture arrangements provided that intu would continue to be the manager of the centre, with the closing of the transaction remaining subject to certain completion conditions including regulatory approvals.

“We are pleased to announce our new partnership with TH Real Estate and we look forward to working together on a number of compelling active management opportunities to enhance and strengthen Madrid Xanadú’s market position and offering,” said Intu chief executive David Fischel.