Press Release - September 30th 2003
Sonae Imobiliária SGPS, S.A.
MAIA, SEPTEMBER 30, 2003: SONAE IMOBILIÁRIA SGPS, S.A. ANNOUNCES FORMATION OF A REAL ESTATE FUND WITH €1.08 BILLION OF EQUITY
Establishment of retail real estate fund with €540 million of third-party equity will allow Sonae Imobiliária to fund its development pipeline of institutional quality assets across Europe
Sonae Imobiliária SGPS, S.A. ("Sonae Imobiliária" or the "Company") today announced that it has established a pan-European retail fund, Sonae Imobiliária European Retail Real Estate Assets Holdings B.V. (the "SIERRA Fund"), with the Company's share of 18 stabilised shopping centre assets based in Portugal and Spain, including the award-winning centres Centro Colombo and Centro Vasco da Gama (Lisboa), NorteShopping (Porto) and Plaza Mayor (Malaga, Spain). The market value of the assets is approximately €2.4 billion (assuming 100% ownership) and the SIERRA Fund's share is approximately €1.3 billion. There is approximately 45% leverage (debt-to-total market value) outstanding on the total value of the SIERRA Fund share in the assets.
As part of the transaction, investors have entered into agreements with Sonae Imobiliária to acquire 49.9% of the SIERRA Fund and provide commitments for a four-year period to facilitate the SIERRA Fund's acquisition of 20 identified (development) pipeline assets from the Company, once the assets meet certain criteria. The Company will retain ownership of 50.1% of the SIERRA Fund throughout its expected ten-year life, demonstrating an ongoing commitment to the incumbent and pipeline assets.
The SIERRA Fund's objective is to provide investors with current yield and capital appreciation through investment in actively managed, high-quality retail centres in the SIERRA Fund's target markets, including Portugal, Spain, Italy, Germany, Greece and Austria. The acquisition of identified pipeline assets from the Company over the next four years will diversify the SIERRA Fund's portfolio into new markets, including Germany, Italy, Austria and Greece. There are currently nine assets under construction in the development pipeline. A full list of assets included in the SIERRA Fund is set out below. These assets have a total Gross Leaseable Area of around 836,492 m2 and include 2,677 shop units.
The third-party equity capital is being provided by institutional investors with significant experience in real estate investing: Stichting Pensioenfonds ABP, Caisse des Dépôts et Consignations EP, CNP Assurances, Ecureuil Vie and TIAA-CREF.
The Company's experienced asset and property management teams, in conjunction with the continuing involvement and support of the Company's joint venture partners, will continue to manage the assets of the SIERRA Fund.
Commenting on the transaction, Álvaro Portela, President and CEO of the Company, said: "We are delighted that such high-quality investors will be part of the SIERRA Fund. Our partnership with these investors will enable Sonae Imobiliária to fund its ongoing business plan for the next several years and further develop its pan-European development and management capabilities. The commitment of such experienced and knowledgeable investors not only validates the quality of our existing assets and development pipeline, but also provides us with a wealth of knowledge to draw upon as we continue to enhance our management and development capabilities."
Rob Bingen, Senior Portfolio Manager Real Estate Europe, Stichting Pensioenfonds ABP, said: "Our investment in the Fund establishes our relationship with Sonae Imobiliária. This is in line with our strategy of indirectly investing in real estate through quality operating platforms."
Catherine de Boisanger, Directeur de Portefeuille, IXIS AEW, acting on behalf of CDC EP, CNP Assurances and Ecureuil Vie said: "We are pleased to provide our investors with the opportunity to invest in such a high-quality portfolio and in an already-identified pipeline. Sonae Imobiliária has a demonstrated track record as a developer and shopping centre operator and we are pleased to be part of the SIERRA Fund."
Laura McGrath, Managing Director, TIAA-CREF, said: "We are extremely pleased to be expanding our existing relationship with Sonae Imobiliária. We regard them as one of the leading shopping centre developers, investors and managers in Europe."
J.P. Morgan plc acted as the Company's exclusive placement agent and financial advisor in relation to the transaction.
Set out below is a list of the assets transferred into the SIERRA Fund:
Contacts
Corporate Communication contact person: Mr. Tiago Vidal at Sonae Imobiliária, Lisbon:
Tel: +351 21 751 5089
e-mail: tmvidal@sonae.pt
Information on Sonae Imobiliária SGPS, S.A.
The Sonae Imobiliária Group is one of Europe's leading developers, managers and owners of shopping centres. Its main shareholders are Sonae SGPS, S.A. (Euronext Lisbon: SON) and Grosvenor First European Property Investments SA. Sonae SGPS, S.A. is a holding company with interests in the wood industry, shopping and leisure centres, retail distribution, telecommunications and tourism. Grosvenor First European Property Investments SA. is a privately-held company controlled by Grosvenor Group Holdings Limited.