Wood & Company, as the transaction leader, together with its JV partner Tatra Asset Management, will initially acquire a 60 percent interest for an agreed total acquisition cost of €450 million (at 100 percent). The remaining 40 percent will be acquired through pre-agreed stakes in 2022, 2023 and 2024.
The total acquisition cost is in line with the gross market value (GMV). In light of the impact of the ongoing COVID-19 pandemic, URW has provided a three-year rent guarantee and a participative loan, including an earn-out mechanism. The joint venture formed by URW and the Purchasers has also refinanced Aupark’s existing debt, by obtaining non-recourse bank financing of €229.5 million.
“The acquisition of Aupark, as a trophy asset in an excellent location, is in line with our investment strategy focused on quality real estate assets, with well-established clientele and a strong tenant mix. We consider Aupark to be a perfect addition to our portfolio and an extraordinary investment opportunity for our clients, with stable returns and a favourable risk-return profile. The current analyses and trends confirm that consumers are expected to shop in-store after the pandemic, and countries with re-opened stores are showing a high increase in footfall. Therefore, together with the Unibail-Rodamco-Westfield team, we will continue to develop the shopping centre in order to maintain Aupark as a market leader in the premium shopping centre segment. This year, we continue to fulfil our expansion strategy and plan to enter other CEE countries, take the opportunities created by the disruption of the ongoing pandemic and develop our portfolio further,” said Martin Šmigura, Investment Director and Head of Slovak real estate operations at Wood & Company.
With the acquisition of the Aupark shopping centre, Wood & Company becomes the second-largest owner of office and shopping centres in Bratislava and Prague. The total value of Wood & Company’s real estate portfolio will exceed €1 billion, after the acquisition of Aupark. In addition to this investment, the group already owns two Prague shopping centres: Galerie Harfa and Centrum Krakov. Together with Aupark, the retail leasable area in Wood & Company’s portfolio will increase to 115,000 sqm.
The completion of the transaction is expected during the first half of this year and is subject to standard conditions precedent, such as competition clearance. URW will continue to manage the property, together with Wood & Company, until the asset has been fully acquired by the Purchasers and the earn-out mechanism settled.
Martin Makovec, Director of Investment and Operations Central Europe for URW, commented: “We are very pleased to work with Wood & Company on this important transaction, which is a genuine landmark deal in the Slovak market. It also demonstrates the resilience of flagship shopping centres and the liquidity of the asset class despite the COVID-19 context. The transaction makes clear sense for all parties involved, and allows URW to accelerate progress on its core strategic focus of deleveraging.”
“The pandemic acts as an accelerator that has brought a transformation to the deal-making process. At the outbreak of the crisis in early-2020, most M&A deals were put on hold or renegotiated, and both buy- and sell-sides were evaluating the changes in the short and long-term factors, and the changes in the value chain and competitive landscape. We are delighted that, together with our business partners, we went through this period of uncertainty confidently, and showed the adaptability and flexibility to keep our deals on track. In the market, we have observed some recovery, and we believe transaction volumes will rise this year,” added Lukáš Palaščák, Head of M&A at Wood & Company.
“Premium shopping centres, such as Aupark, will play a unique role in reviving the economy after the COVID-19 pandemic. Their clientele consists of visitors from the middle and upper classes – the groups of the population who have been affected the least by COVID-19’s economic consequences. Compared to the competition, the average visitor to Aupark has 30% higher income and visits 20% more stores in one visit. Aupark benefits from an excellent location and the viability of Bratislava, which has been, traditionally, one of the EU’s most economically strong regions, making the acquisition of Aupark an exceptional business for the new owner. It represents above-standard value,” said Michal Soták, from consulting company Cushman & Wakefield, a leading expert in the retail sector.
The disposal of the Aupark Bratislava shopping centre, which is URW’s only asset in Slovakia, is fully in line with URW’s deleveraging strategy, and its strategy of the dynamic recycling of capital from mature assets and the concentration on ownership of assets in key European cities.
