BB Asset and Iguatemi Acquire Stake in Shopping Rio Sul for R$ 1.15 Billion with Stabilized Cap Rate of 7.7%
- BB Asset will invest R$ 790 million for a 33.3% ownership share in the property; meanwhile, Iguatemi will invest R$ 360 million for a 16.6% stake in the venture
- The acquisition marks Iguatemi's reentry into the commercial real estate market in Rio de Janeiro
In a statement published on Monday, the 8th, Iguatemi and BB Asset announced an investment agreement with Comprashop to join the consortium of stakeholders at Shopping Rio Sul in Rio de Janeiro, Brazil. Both Iguatemi and BBIG FII are participating jointly in this transaction.
Read more: BB Asset Enters the Shopping Mall REIT Market With a Billionaire IPO Fund
Iguatemi's investment in acquiring a 16.6% stake in Shopping Rio Sul amounts to R$ 360 million. At least 70% of this sum will be paid upfront, with the remainder split into two identical annual installments adjusted according to the CDI. The investment agreement also designates Iguatemi to manage the asset following the completion of the operation.
BB Asset has invested R$ 790 million to acquire a 33.3% stake in the project, following the same payment structure as Iguatemi.
The remaining 50.1% ownership of the property is held by Cia Brasileira de Shopping Centers (Combrashop).
The Cap Rate of the transaction has been set at 7.7% by both companies.
The transaction is currently under review by the Administrative Council for Economic Defense (CADE)
When approached by REsource for comment, Iguatemi stated that it would only communicate through its investor relations department. Similarly, BB Asset commented exclusively through relevant market disclosures.
"Iguatemi's investment in Rio Sul aligns with our strategy to establish a presence in the country's premier properties and most important markets, thereby enhancing our asset portfolio. Upon completion of the transaction, Iguatemi will hold a stake in one of the country's foremost shopping malls," stated Iguatemi in a communication to investors.
In a statement disclosure, BB Asset stated that the investment opportunity in Shopping Rio Sul aligns with the Fund's strategy to hold interests in high-end commercial properties, focusing on the A and B demographic segments and locations with higher income concentrations.
According to the fund, "in recent years, the development has demonstrated robust financial performance, achieving double-digit annual revenue growth between 2021 and 2023, driven by a diversified mix of retail stores, services, and entertainment options, in addition to strong performance indicators."
The completion of the transaction is subject to certain conditions precedent, including approval by the Administrative Council for Economic Defense (CADE).
Shopping Rio Sul was the first mall built in Rio de Janeiro and is located less than 15 minutes from Santos Dumont Airport, in the Botafogo neighborhood, one of Rio's principal districts in the South Zone. The development spans approximately 52,000 square meters of leasable area (ABL).
