Laurence Rapp, CEO of Vukile Property Fund, says, “This accretive acquisition takes our Spanish assets over €1bn. Puerta Europa is a dominant, modern shopping centre distinguished by impressive sales ratios and low average rentals relative to the market, and we see exciting potential to grow its income streams.”

Puerta Europa offers two floors of shopping with 97 brands and a dedicated food and leisure area. It is anchored by a newly-refurbished Mercadona, Spain’s leading supermarket group, with a fashion mix led by a 4,000sqm Primark, a new flagship Zara of 3,000sqm and a recently revamped Lefties store which is part of the Inditex Group. It also features a 10-screen Yelmo Premium cinema complex, ensuring Puerta Europa is on-trend with the movement of growing leisure and entertainment offerings at shopping centres.

Algeciras is home to the second-largest port in Spain and the seventh busiest container port in Europe. Besides drawing from its 240,000-strong local shopper market, Puerta Europa also attracts customers from nearby Gibraltar. The region continues to benefit from strong and growing tourism and also attracts shoppers coming from North Africa via ferry.

This is Castellana’s second investment in the Cadiz region and, with its Bahia Sur shopping centre in San Fernando, the acquisition secures greater critical mass for it in the province, which is expected to benefit from further northern European migration in the years ahead.

The acquisition will be 40% funded by debt with Vukile having provided the balance of the equity.

Additionally, affirming Vukile’s strategic and financial management strength, GCR Ratings announced it has upgraded the national scale Issuer ratings for Vukile to AA-_(ZA) and A1+_(ZA) for the long and short term respectively, with a stable outlook.

The Spanish acquisition and credit rating upgrade follow Vukile’s R512m acquisition of Mdantsane Mall in the Eastern Cape, which extends its geographical footprint and its foothold in SA’s township retail market.

Vukile is a leading South African retail REIT with R35bn of property assets of which 50% are offshore, with 47% in Spain through Castellana, and 50% in Southern Africa.