The two largest shopping centre projects in Spain are being revived after the municipal and regional elections on 28 May. Their promoter, the company Eurofund, is betting on a redesign and a renegotiation for these two giants. On the one hand, the initiative is moving forward on the Costa del Sol, where the largest centre in the country was planned, but now with new uses such as housing and hotels, for which it has political support. In Valencia, Port Mediterrani may be resurrected after eight years of clashes in the courts and blockage by the progressive government in the Valencian Community, as the return of the PP to the Palau de la Generalitat will foreseeably facilitate investment.
Both projects, the Costa del Sol in Torremolinos (Málaga) and Paterna (Valencia) require an investment of 750 million euros each, i.e. a combined outlay of 1.5 billion.
These projects have also had to overcome the fact that Eurofund's main partner, the British company Intu, went into insolvency proceedings, which means that in the future the Spanish company will need new investment partners.
In the case of the centre formerly known as Intu Costa del Sol, the Torremolinos Town Hall is modifying the general plan to convert it to mixed uses. Ian Sandford, president and owner of Eurofund, explains that his initiative has the support of the mayoress Margarita del Cid (PP), who after the 28-M elections will revalidate her post by obtaining 17 of the 25 councillors in the plenary session.
"After the pandemic, it was not logical to allocate 250,000 square metres to a commercial area," Sandford acknowledges. Customer tastes have changed, with more emphasis on online retailing, and funding for large retail investments has also become more difficult.
Sandford reveals that the large centre will be converted into residential and hotel (40% of the buildable area), commercial (another 40%) and office (the remaining 20%). Within this housing category, he explains that there will be build to rent, senior living (serviced flats for the elderly) and coliving (flats with services and communal areas).
"We could start work in two or three years," Sandford says of the timescale of the work, which is always conditional on slow urban planning modifications and finding a new investment partner. Currently, 25% of the land is owned by Eurofund - which is Sandford's family office - and the rest is still in the hands of his British ally. "Intu is going to leave, but it will wait for the urban planning to be approved," says Eurofund's chairman.
Intu went into insolvency proceedings in 2020 after being unable to refinance its debt, which amounted to some €4.9 billion. The firm KPMG was chosen as insolvency administrator and tried to sell its positions in Spain, including the land in Torremolinos. It did previously sell to Generali for 238 million its 50% stake in Puerto Venecia in Zaragoza, which is the largest shopping centre in Spain, where Eurofund was also the manager. It also disposed of Parque Principado in Asturias and unsuccessfully tried to sell its 50% stake in Madrid Xanadú.
