Blackstone places Espacio León shopping centre on the market

Blackstone has decided to sell its shopping centre in the Spanish city of León in an environment in which banks are hesitant to offer financing for retail properties in tertiary towns and yields are widening as investors worry about e-commerce and future consumer habits.

However, León, albeit not a regional capital is a wealthy city and the shopping centre has a catchment of c. 270,000 consumers which are in general considerably wealthier than the Spanish average.

Leon is at the heart of the region of Castilla y León which represents 5% of Spain’s GDP and has a lower than average unemployment level of c. 12% which is projected to reduce to 8% by 2020 (INE, BBVA, 2019) making it one of the healthiest job markets in Spain. The region has a strong renewable energy sector which creates 3,000 jobs (UNEF, 2019) and the province has a larger than average industrial sector. The city is also an educational hub for the province with a university which is home to 12,600 students.

Despite the closing of Zara in 2018, Espacio León is the dominant shopping centre for the city and faces no competition except for the fashion brands on the high street. It retained various Inditex brands such as Pull & Bear, Stradivarius and Bershka and, in fact, various retailers have chosen the centre to enter the catchment area including Primark, Media Markt, H&M, Forum, JD Sports and Odeón Cinema. Furthermore, the centre’s stable footfall of 4 million is also expected to grow after the new Primark store opens in early 2020.

Blackstone Real Estate Partners Europe IV (Blackstone) purchased the property from Commerz Real back in 2015 and has hired JLL to conduct the sale process.