Chilean multinational real estate investment fund Parque Arauco S.A. (PARAUCO. SN), through its subsidiary Parque Arauco Colombia SAS has signed a deal to buy 51% of the fiduciary rights of an investment vehicle that owns about 19,000 square meters in the Titan Plaza Shopping and Business Center located in the Northwest of Bogotá from Visum Rentas Inmobiliarias, a real estate investment fund.
In Colombia, it is common for units in shopping centers to be sold off individually as retail condominium units, so many unit investors may participate in the ownership of a mall, plaza or office building.
In a statement shared with Finance Colombia, Parque Arauco confirmed that Visum Rentas Inmobiliarias currently owns a portfolio of commercial premises and offices in Titan Plaza. Once the conditions agreed in the agreement are met, Parque Arauco will pay Visum $138,720 million Colombian Pesos (approximately $34 million USD) for the acquisition of 51% of the fiduciary rights to the property, and will have a purchase option for the remaining 49% for a period of 30 months, after 24 months from the closing date of the agreement.
The Titan Plaza shopping center in Bogotá’s northwest at the intersection of 80th St. and Boyacá Avenue, near the suburb of Engativá, has about 69,000 square meters of leasable space, which is divided into about 54,500 square meters of commercial area and 14,500 square meters of office space. Completed in 2012, the mall is anchored by major brands such as Falabella (department store), Jumbo (grocer), Zara (fashion) and movie theater CineColombia.
The vehicle in which Parque Arauco will invest owns about 19,000 square meters of commercial space, which in the last twelve months (until June 2023) contributed an EBITDA of $23 billion COP (approximately $5.6 million USD). 80% of the EBITDA of this vehicle, which currently has no debt, comes from the operation of the retail surface and 20% of the EBITDA comes from the operation of the office space. The EBITDA per square meter of this retail area is very similar to that of Parque La Colina in the northern Bogotá suburb of Suba, Parque Arauco’s main asset in Colombia, which accounts for the high quality of the real estate spaces that are part of this transaction.
Diego Bermúdez, General Manager of Parque Arauco Colombia Division, said that “this investment in Titan Plaza, along with allowing us to strengthen our presence in Bogotá, the largest city in the country, is the first we have made in a multitenant shopping center. In Colombia, approximately two-thirds of the surface of shopping centers is in multitenant assets, and exceptionally some of them have an outstanding performance. This investment is in addition to the one recently made in Parque Alegra, our first shopping center in the city of Barranquilla, reinforcing our commitment to the development of Colombia.”