Property investment manager Savills Investment Management (Savills IM) has added four urban supermarkets in Portugal to its European Food Retail investment portfolio.
This acquisition brings the total value of the portfolio to approximately €470 million.
The company plans to continue investing in the food retail sector across key European markets, including Spain, Portugal, Italy, the UK, Ireland, Benelux, and the Nordics.
With additional capital available, Savills will continue to pursue further investment opportunities.
Kathrin Michalzik, portfolio manager at Savills IM, said, “This is the latest in a series of acquisitions on behalf of our European Food Retail strategy. Last year, we acquired a supermarket portfolio comprising four properties in Portugal for the strategy, also let to Continente.
“This exciting new opportunity for the strategy stood out due to the portfolio’s strong investment fundamentals – well-established retail properties in good urban locations, with long-term leases to a leading food retailer. Portugal also benefits from solid market fundamentals and a positive economic outlook, despite the challenging economic conditions in Europe.”
Acquired Properties
The acquired properties comprise two supermarkets in the Lisbon metropolitan area, one near Porto, and one in the Algarve.
Each supermarket is leased to Portuguese food retailer Continente on long-term agreements. These prime locations, with strong catchment areas and growing populations, make the portfolio an attractive investment.
These established Continente Modelo supermarkets are popular with shoppers due to their convenient locations and wide selection of products.
Continente has consistently improved the ESG aspects of these properties. This includes the installation of solar panels and modern building management systems, as well as upgrades to energy-efficient LED lighting.
Ian Jones, director of investment at Savills IM, added, “Food retail was one of the few sectors to benefit from government lockdown restrictions as a result of the coronavirus pandemic. It is not least this high level of crisis resistance, combined with stable returns, that has brought the asset class into the focus of various investor groups.
“Only a few supermarket portfolios have come onto the market in recent months. We are therefore all the more pleased that we were able to secure the attractive portfolio in Portugal for our strategy, leveraging our strong European investment platform.”
