Unibail’s
office
portfolio is
concentrated
in Paris.
of this very specific market condition to
increase ownership and control in this
market,” Poitrinal says.
In fact, Unibail already is doing so. In
2008, it purchased high-end malls such as
Shopping Center Süd in Vienna for $765
million, a site with 1. 5 million square feet
and an initial yield of 5 percent. That deal
was its largest purchase of a shopping center to date. It then followed up by purchasing a controlling share of Barcelona’s La
Manquinista, representing 640,000 square
feet at an initial yield of 6. 3 percent.
“We are not in a hurry to buy assets,”
Poitrinal says. “But we are looking at a
number of opportunities with strong
fundamentals.”
When it does make a bid, Unibail will
have little competition, since there are
few players able to fork over much more
than $60 million. “Unibail is one of the
few companies in the world that is able to
acquire these €100 million-plus centers
these days,” van Weeran says. “Anything
in excess of €50 million, banks simply
don’t open their doors.”
Such was the case with Unibail’s pur-
chase last year of La Maquinista, a shopping
center anchored by strong international
retail chains in the heart of Barcelona. The
shopping center was sold by Spanish real
estate company Metrovacesa, which has
been saddled with plummeting asset values
among its office, retail and other properties
in Spain, forcing a creditor takeover of the
company in February 2009.
Unibail also looks to gain in the coming year by extracting more value from its
own properties through renewing leases
and refurbishing facilities. “We look for
opportunities where we can apply our
skills in active property management and
development,” Poitrinal says.
SIICs — French for the REIT
approach to real estate investment
Unibail is part of a group of companies classified as SIICs, the French version
of a REIT. The acronym is short for “sociétés d’investissements immobiliers
cotées,” a format that went into effect in 2003 as part of an international
trend toward the securitization of real estate. In France, SIICs are exempt
from taxes if they pay out 85 percent of recurring income. They also must pay
out 50 percent of capital gains within two years.
tHinking Big
Shopping Center Süd and La Maquinista
typify the types of properties Unibail wants
on the retail side going forward. Both are
large, have high foot traffic and strong sales
relative to peers in their markets. Both offer
lots of potential. For example, Shopping
Center Süd generates 25 million visits
per year, and had a 1. 4 percent increase in
tenants’ sales in 2008 compared with 0.3
percent on average for the Austrian market. It has also signed 50 renewals or new
leases—leading to a 33 percent uplift—and
has introduced new brands.
That strategy also has worked well at
other properties. Unibail signed 1,097
leases in 2008, leading to a 25 percent
increase in rents. For example, at La
