H2O Shopping Centre, Madrid
Information as per 30 September 2023 half year report
Investment | Investment type | Carrying value | Income return | Property type / underlying security |
---|---|---|---|---|
H2O |
Indirect property |
£17.4m (€20.1m) |
5.1%* |
High-yield, dominant Madrid shopping centre and separate development site |
* Yield on equity over twelve months to 30 September 2023, excluding Fund fees
ART has a 30% stake in joint venture with CBRE Investment Management in the H2O shopping centre in Madrid. H2O was opened in 2007 and built to a high standard providing shopping, restaurants and leisure around a central theme of landscaped gardens and an artificial lake. H2O has a gross lettable area of approximately 55,000 square metres comprising over 100 retail units. In addition to a multiplex cinema, supermarket (let to leading Spanish supermarket operator Mercadona) and restaurants, it has a large fashion retailer base, including some of the strongest international fashion brands, such as Nike, Zara, Mango, JD Sports, Cortefiel, H&M and C&A.
H2O occupancy, by area, as at 30 September 2023 was 92.6%. The centre trading levels remain below the pre-covid highs, however a recovery is evident. In the calendar year to 30 September 2023, visitor numbers were approximately 6.8% below those of the same period in 2019 (pre-Covid) and 7.0% above the same period in 2021.
During the period, a notable asset management action included the signing of contracts with three existing Inditex group brands within the centre to extend the footprint of existing stores and extend the lease terms. The works to deliver the new 3,000 square metre store for anchor retailer Primark continue to advance on schedule. The store is expected to be delivered during 2024.
The asset management highlights are as follows:
- Valuation: 30 September 2023: €120.0 million (£103.9 million) (31 March 2023: €119.3 million (£104.9 million)).
- Centre occupancy: 92.6% by area as at 30 September 2023.
- Weighted average lease length to next break: 2.3 years and 7.9 years to expiry as at 30 September 2023.