Acquisition of Puerta del Sol Madrid
Kennedy Wilson Europe Real Estate Plc (LSE: KWE) an LSE listed property company that invests in direct real estate and real estate loans in Europe, has completed on the acquisition of Puerta del Sol 9, a high street property in the iconic Plaza Puerta del Sol in Madrid, for €30.0 million by order of the Mercentile Court 3 of Barcelona. The acquisition was funded from the Company’s cash resources.
Plaza Puerta del Sol is a landmark location in the heart of Madrid’s city centre offering a wide range of restaurants, shops, cultural sights and attractions. Recently, the plaza benefitted from the opening of one of Apple’s largest flagship stores in Europe, (c. 65,000 sq ft) at Plaza Puerta del Sol 1.
The 24,700 sq ft unit 9 is spread over six stories and requires significant refurbishment. A planning application is expected to be submitted by the end of 2015 to convert the planning use from residential to retail.
Upon receipt of planning approval a comprehensive refurbishment will be undertaken with the aim to market the premises to high-end retailers looking for flagship accommodation. Future capital expenditure is anticipated to be c. €10.0 million.
This is the second deal KWE has completed under the framework agreement with Renta Corporacion entered into at the end of 2014.
Mary Ricks, President and CEO of Kennedy Wilson Europe, commented: “The acquisition of Puerta del Sol adds Madrid’s renowned touristic destination, the equivalent of Piccadilly Circus in London, to our portfolio. It provides us with prime irreplaceable real estate with significant asset management potential. The supply-demand dynamics of the area have remained robust, even throughout the downturn, and occupational requirements continue to grow.
“The redevelopment and repositioning will allow us to deliver a global retailer to the Plaza, transforming the existing neglected accommodation into a highly sought after institutional product.”