Israeli income producing real estate company Gazit-Globe Ltd. (NYSE: GZT; TASE: GZT; TSX: GZT) unit Gazit Brasil has signed a binding agreement to acquire a 70% stake in Internacional Shopping, a shopping mall in Sao Paulo, for $281 million cash. The other 30% of the mall is owned by a publicly traded Brazilian company (20%) and financial institution (10%).
This is a huge deal by the standards of Gazit Brasil. The deal is expected to close in the later part of first quarter 2018, and will be funded by recent dispositions including gains on sales of assets, retained free cash flow and other sources of company capital.
Opened in November 1998, Internacional Shopping is amongst the top ranking malls in Brazil and one of the largest, most dominant and established shopping malls in the Sao Paulo metropolitan area. Strategically located between the busiest international airport of South America, Guarulhos airport (40 million passengers annually) and Sao Paulo city, it is situated along the main Dutra Highway, with access, and visibility of 850,000 cars daily.
The mall, which will be controlled and managed by Gazit Brasil, has 77,000 square meters of GLA situated on 123,000 square meters of land area with, 4,200 parking spaces and almost 200,000 square meters of additional building rights. It is 98% occupied by 360 tenants, anchored by hypermarket, food operators, entertainment and an array of services and convenience uses, with sales of approx. R$1 billion, 30 million visitors and 4 million vehicles annually.
Gazit Brasil CEO Mia Stark said, “Internacional Shopping is a trophy asset with an exceptional strategic location, density, great visibility and access that has all qualities needed to make it one of the most desirable mixed-use complexes in the region, combining shopping, dining, living, playing and working. Gazit Brasil keeps delivering strong recurring cash flow and great results year-over-year including the gain of approx. a quarter billion Reais, from the recent sale of Extra Itaim and disposal of BR Malls shares, that will be recycled into this exciting acquisition and once again will give us the opportunity to turn another commercial real estate asset into an exciting destination hub.”
Published by Globes [online], Israel business news - www.globes-online.com - on December 28, 2017
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