Lar España Real Estate - Defying the retail gloom
Lar España Real Estate’s manager says that the company’s strong financial and operational numbers show that it continues to defy the doom and gloom surrounding the retail sector. The value of its Spanish shopping centre and retail park portfolio has been stable despite higher interest rates – thanks in large part to rental growth within its portfolio (gross rental income was up 16.4% over the first half of 2023).Retail sales within its portfolio totalled more than half a billion euros in the first six months of the year (well ahead of last year and pre-pandemic levels), which the manager says provides confirmation of the quality and dominant nature of its assets. The manager believes that Spain has been less-impacted by structural changes that have plagued the retail sector in the UK and US, adding that there are no supply issues and online retailing is far less prevalent.
The company is looking to put the proceeds from recent sales (achieved at prices above book value) into high-yielding shopping centres where it plans to unlock hidden value. Having re-established its dividend at pre-COVID levels, a re-rating may follow.
Lar Espana Real Estate SOCIMI SA is a Spain-based company primarily engaged in the operation of retail Real Estate Investment Trusts (REITs). The Company specializes in acquiring, managing and renting real estate assets within the Spanish market. Its business activities are divided into three segments: Shopping Centers, Offices, as well as Logistics. The Shopping Centers area is responsible for operation of a number of shopping malls, namely Txingudi, Las Huertas, Albacenter, Anec Blau, Hiper Albacenter, and Nuevo Alisal, among others. The Offices segment invests in office properties, such as Arturo Soria, Cardenal Marcelo Spinola, Egeo and Eloy Gonzalo. The Logistics division focuses on managing logistics warehouses, including Alovera I and Alovera II. The Company also owns a plot for residential properties development. It is a parent of a number of entities, such as Lar Espana Inversion Logistica SA, Gran Via Centrum Holdings SAU, Global Noctua and Puerta Maritima Ondara.
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