Lighthouse Properties Acquires Portuguese Mall for €177.8M with 7.2% Yield

  • Lighthouse Properties acquires Alegro Montijo, a 45,469 m² mall in Portugal, for €177.8 million.
  • The acquisition boosts Lighthouse's Iberian portfolio to 72.2% of its property value.
  • Financial forecasts project a 7.2% annualized net initial yield for 2024.

Lighthouse Properties p.l.c. has announced a significant acquisition. The company, through its subsidiary Lighthouse Netherlands B.V., has entered into a share purchase agreement with Tiekenveen Holding B.V. This deal involves the purchase of Alegro Montijo, a regional mall in Portugal.

Acquisition Details

The acquisition is structured as a share deal. The seller will transfer the entire issued share capital and shareholder claims in Alegro Montijo – Gestão de Centro Comercial, Sociedade Unipessoal, Lda. to Lighthouse Netherlands B.V. This entity indirectly owns Alegro Montijo.

About Alegro Montijo

Alegro Montijo is a 62,433 square meter regional mall. It is located in Montijo, part of the Lisbon metropolitan area. The mall boasts a strong tenant mix. Notable tenants include Zara, Bershka, Stradivarius, Pull&Bear, and Primark, set to open in Q3 2024. Other major tenants are Fnac, JD Sports, and a large Continente Hypermarket. However, the hypermarket is not part of this acquisition.

Property NameLocationSectorGross Lettable Area (m²)Avg. Monthly Rent (EUR/m²)Purchase Consideration (EUR)
Alegro MontijoMontijo, PortugalRetail45,46924.64177,800,000

Strategic Rationale

This acquisition aligns with Lighthouse’s investment strategy. The company focuses on dominant and defensive malls in economically robust regions. Alegro Montijo fits this profile with its strong tenant offering and strategic location. This purchase also increases Lighthouse’s exposure to the Iberian market. After this acquisition, Iberian properties will make up 72.2% of Lighthouse’s property portfolio by value.

Financial Details

The total purchase consideration for Alegro Montijo is €177.8 million. This amount is before existing senior bank debt of €76.3 million. The remaining amount will be funded from Lighthouse’s cash resources. The acquisition is expected to yield an annualized net initial return of 7.2% based on forecasted 2024 net operating income.

Conditions Precedent and Effective Date

The acquisition is subject to finalizing terms with the existing lenders by September 30, 2024. The deal will close within 15 business days after fulfilling this condition. On the closing date, the entire share capital and shareholder claims in Alegro Montijo will transfer to Lighthouse.

Financial Forecast

Lighthouse has provided financial forecasts for Alegro Montijo. These forecasts cover a 5-month period ending December 31, 2024, and a 12-month period ending December 31, 2025. The forecasts are based on information from the seller’s management accounts, budgets, and rental contracts.

Forecast PeriodRevenue (EUR)Net Property Income (EUR)Net Profit After Tax (EUR)Distributable Profit (EUR)
5 months (2024)5,602,7665,375,0003,267,9173,267,917
12 months (2025)13,909,36813,337,4338,241,7588,241,758

Assumptions for Forecast

The forecast assumes the acquisition closes around July 31, 2024. It incorporates contracted revenue based on existing lease agreements and expected indexation. 90% of rental income is contracted, while 10% is from expected renewals. Property operating expenses are based on the 2024 approved budget by the property manager, Nhood Portugal. No fair value adjustments are included.

Conclusion

Lighthouse Properties’ acquisition of Alegro Montijo is a strategic move. It strengthens their portfolio in the Iberian region and aligns with their investment strategy. The financial forecasts indicate a promising return on investment. This acquisition underscores Lighthouse’s commitment to expanding its footprint in economically growing regions.


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