Vukile Property Fund Expands Footprint with €63.3 Million Acquisition in Madeira
In an exciting development for investors and retail enthusiasts alike, Vukile Property Fund’s Spanish subsidiary, Castellana Properties, has successfully secured an agreement to purchase the Forum Madeira shopping centre in Funchal, Portugal, for an impressive €63.32 million (approximately R1.36 billion). This marks Vukile’s fifth retail investment in Portugal since it ventured into the market just a year ago, showcasing its ambitious vision of expansion beyond South Africa.
Located in the picturesque capital of Madeira, Funchal, Forum Madeira boasts a lettable area of 21,472 square meters and serves as a bustling hub for both locals and tourists. The shopping centre is home to popular brands and features anchor tenants, including the renowned Inditex group and Pingo Doce supermarket, along with Cinema NOS, the island’s favorite movie destination.
One of the standout features of Forum Madeira is its high traffic, which attracts about 5.4 million visitors annually. It not only caters to the local community, which numbers around 250,000 residents, but also engages approximately 2.3 million tourists who flock to this beautiful island each year. With a 100% occupancy rate, the shopping centre is thriving, indicating strong consumer interest and faith in its offerings.
Vukile describes this acquisition as a strategic move, providing them with a high-performing asset in a region ripe for growth. The company’s report highlights the low effort rates and impressive sales levels at Forum Madeira, suggesting that there’s ample room for continued expansion. Impressively, this shopping centre is the only one on the island featuring the full range of Inditex brands, solidifying its stature within Madeira’s retail landscape.
Moreover, the economic indicators for Madeira are promising. The Autonomous Region has recorded a remarkable 23.4% GDP growth since 2019, while unemployment has seen a significant drop from 11.1% in 2017 to just 5.9% today. These positive trends solidify the region as a burgeoning area for investment and highlight the island’s potential for future growth.
Vukile plans to finance this acquisition through a mix of cash and in-country debt totaling €28 million, maintaining a healthy loan-to-value ratio of 38.5%. With an initial net operating income yield of 9.5%, and anticipated cash-on-cash yields reaching 11.8% before withholding tax, Vukile’s acquisition promises to be a lucrative addition to its portfolio.
As Vukile Property Fund continues to expand its reach, particularly in Europe, this acquisition stands as a testament to its commitment to investing in high-potential markets and assets. The company aims not only to capitalize on these opportunities but to contribute positively to the local economies in which it operates.
Tags: #BusinessNews #Portugal #RealEstate #Investments #Tourism
