(Bloomberg) -- Deutsche Bank’s asset management unit DWS is selling three shopping centers in Portugal, taking advantage of a recovery in commercial real estate valuation to lock in profits, according to people familiar with the matter.
The three malls, spread across the nation, are being sold separately as they’re managed by different entities linked to DWS, said the people, who asked not to be identified discussing confidential information. DWS is now selling some of these assets to take advantage of higher valuations as shopping malls make a comeback after being shunned by investors during the pandemic, they added.
Lower borrowing costs are also making it cheaper to finance these property deals, they said.
The assets include Nosso Shopping in the northern city of Vila Real and Alma Shopping in Coimbra, central Portugal. The firm is also offloading Forum Madeira in Funchal, a city on the Portuguese island of Madeira, the people said.
A representative for DWS declined to comment on the sale of the three malls.
DWS acquired several malls in Portugal from funds controlled by US private equity firm Lone Star in 2015. That was seen as a sign of investor confidence in Portugal after it completed an international bailout program in 2014 and as the economy rebounded from a recession.
Spanish newspaper Expansion reported in June on the sale of Nosso Shopping and the Alcala Magna mall in Madrid by Trajano Iberia Socimi SA, a Madrid-based real estate investment trust managed by DWS. Nosso Shopping was valued at €70.7 million ($76.3 million) at the end of 2023 while Alcala Magna had a market value of €96.5 million, according to a presentation on Trajano’s website.
Cushman & Wakefield said in a report earlier this year it expects commercial real estate sales in Portugal to accelerate in the second half as interest rates drop. Investment in commercial real estate fell to €1.7 billion in 2023 from about €3 billion in the previous year.
Castellana Properties, a Spanish real estate investment trust controlled by South African fund Vukile, said in September that it bought three shopping centers in Portugal from Harbert European Real Estate for €176.5 million.
The timing coincided with South African Lighthouse Properties’ acquisition of the Alegro Montijo Shopping center south of Lisbon for €178 million, Portuguese law firm PLMJ, which advised Lighthouse on the deal, said in a statement on its website.
DWS also owns the LeiriaShopping center in the town of Leiria, north of the capital Lisbon, and the Alameda Shop & Spot in Porto, northern Portugal. The two malls are currently not on sale, the people said.
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