JSE-listed Vukile Property Fund’s 99.5%-held Spanish subsidiary Castellana Properties has agreed to acquire a high-quality, blue-chip-tenanted portfolio of three shopping centres in Portugal.

Castellana will acquire the assets from a Harbert European Real Estate Fund subsidiary at an initial yield of about 9%, which is expected to deliver a cash-on-cash yield of about 10% in euros.

The Portuguese retail property portfolio includes two shopping centres in Lisbon and one in Porto.

Vukile highlights that it encompasses all retail fundamentals including dominant market positions, good locations, access, visibility and a strong shopper base.

Castellana is acquiring RioSul, a two-storey shopping centre in Seixal, southern Lisbon.

In the north of Lisbon, Castellana is acquiring Loures, also a two-storey shopping centre.

Both feature national tenants including Zara, Bershka, Pull&Bear, Stradivarius, Foot Locker and C&A, as well as various food offerings and a cinema multiplex.

In both cases, the centres are tenanted by grocery anchor, Continente Hypermarket, which owns its own stores.

RioSul attracts a yearly footfall of nearly eight-million consumers and achieves sales of about €98-million a year in a market where both the population and its spending power is growing, Vukile avers.

Loures is in a growth node of greater Lisbon and busy undergoing preparations to be integrated into a new metro station, set to open in 2026.

Castellana is also acquiring 8a Avinda, the only shopping centre in São João da Madeira, an industrial and manufacturing town south of Porto.

Its tenant mix includes national brands Lefties, Bershka, Pull&Bear, Stradivarius, Cortefiel and C&A, together with a selection of food choices and a cinema multiplex.

Similar to the Lisbon assets, the centre is shadow-anchored by Continente Hypermarket. 8a Avinda boasts a yearly footfall of six-million people, generating sales of about €58-million.

The assets will be held in a subsidiary, in which Castellana will have an 80% interest and RMB Investments & Advisory the remaining 20% interest.

With the three new shopping centres acquired in Portugal, post the transaction, about 64% of Vukile’s assets will be located in the Iberian Peninsula, and almost 56% of its property net operating income will be in Euros.

Vukile CEO Laurence Rapp confirms that Vukile remains committed to its stated strategy in South Africa, Spain and now Portugal and continues to evaluate opportunities that are strategically aligned and financially accretive.

The transaction remains subject to the usual conditions precedent and is expected to close on October 1.