Parque Arauco acquires 51% stake in Titán Plaza Shopping Center for $34m

Chilean retail giant Parque Arauco S.A. (PARAUCO.SN) has revealed its new growth strategy involving the acquisition of a 51% stake in the fiduciary rights of an investment vehicle owning roughly 19,000 m2 of Gross Leasable Area (GLA) in Titán Plaza Shopping and Business Center, located in Bogotá, Colombia. This strategic move was executed through its subsidiary Parque Arauco Colombia SAS (“PACSAS”).

$34 Million Investment in Bogotá’s Iconic Titán Plaza

51% of Fiduciary Rights Acquired from Visum Rentas Inmobiliarias

Parque Arauco has agreed to pay Visum Rentas Inmobiliarias (Visum) COP 138,720 million (approximately USD 34 million) for acquiring a 51% stake in the fiduciary rights of this prime retail space. The company also retains an option to buy the remaining 49% within 30 months, following a 24-month period after closing the agreement.

Titán Plaza: A Prominent Retail and Office Space in Bogotá

Mixed-Use Asset Enjoys Prime Location and High-Quality Real Estate

The Titán Plaza Shopping Center is a mixed-use asset boasting about 69,000 m2 of total GLA. This includes around 54,500 m2 of retail space and over 14,500 m2 of AA-category offices. The shopping center is strategically situated between two major Bogotá thoroughfares, Calle 80 and Avenida Boyacá, and is anchored by key brands like Falabella, Jumbo, Zara, and Cine Colombia.

EBITDA of $5.6M Highlights Investment Quality

Retail and Office Space Operations Contribute to Significant EBITDA

The 19,000 m2 of GLA owned by the investment vehicle in Titán Plaza generated an EBITDA of approximately COP 23,000 million (USD 5.6 million) in the last twelve months up to June 2023. Notably, 80% of this EBITDA comes from retail operations, with the remaining 20% attributed to office space operations. This performance closely parallels that of Parque La Colina, Parque Arauco’s main asset in Colombia, emphasizing the high quality of the real estate involved.

CEO Diego Bermúdez Reaffirms Commitment to Colombian Market

Acquisition Part of Broader Strategy to Expand in Multi-Owner Shopping Centers

Diego Bermúdez, the CEO of Parque Arauco’s Colombia Division, stated that the investment in Titán Plaza not only strengthens their presence in Bogotá but also marks the company’s first investment in a multi-owner shopping center. He noted that about two-thirds of shopping center spaces in Colombia are multi-owner properties, many of which perform exceptionally well. The Titán Plaza investment complements the company’s recent acquisition in Parque Alegra, its first shopping center in Barranquilla, underscoring Parque Arauco’s ongoing commitment to Colombian development.