Parque Arauco Announces Agreement to Acquire Open Plaza Kennedy in Santiago, Chile

Parque Arauco S.A. (PARAUCO.SN) announced an agreement for the purchase of assets with Open Plaza Chile SpA and Falabella Inmobiliario S.A. (hereinafter referred to as “Grupo Falabella”) to acquire Open Plaza Kennedy, located in Las Condes, Santiago. The agreement is subject to the fulfillment of customary conditions for this type of transaction. If these conditions are met, Parque Arauco will pay Grupo Falabella a sum of UF 4,800,000 (approximately US$ 200 million), subject to potential adjustments.

Inaugurated in late 2019, Open Plaza Kennedy is located on the east side of Rosario Norte Street, in front of Parque Arauco Kennedy. The property includes a shopping center with 54,000 sqm of retail space and a hotel with 15,500 sqm operated under the Courtyard by Marriott brand, totaling 69,500 sqm of leasable space.

The Open Plaza Kennedy mix includes a Sodimac home improvement store, a Tottus supermarket, an Ikea furniture store, an H&M clothing store, and a Decathlon sporting goods store. These tenants are different from those already present in Parque Arauco Kennedy, and therefore are complementary to its existing mix. Over the past twelve months, Open Plaza Kennedy achieved an operational result (NOI) of approximately UF 320,000 (around US$ 13.3 million).

Eduardo Pérez Marchant, CEO of Parque Arauco, commented, “This agreement is important for Parque Arauco because, if completed, it will increase our retail space by approximately 5%, and at that time, we will actively work to capture cost synergies to strengthen the asset's NOI.” Regarding the financial effects of this acquisition, he added, “Our cash position exceeds CLP 420 billion (approximately US$ 460 million), which is more than sufficient to fund this transaction. On the other hand, we have had very solid results recently. In this context, if the deal goes through, we will reschedule some CAPEX investments to accommodate this acquisition. Thus, considering Open Plaza Kennedy's twelve-month NOI, we expect to move from the current financial debt to EBITDA ratio of 5.2 times to a ratio of approximately 6 times, aligned with our target range of 5 to 6 times. Additionally, we will continue pursuing potential sales of minority stakes in mature assets, similar to those we have already executed in Chile and Colombia, to further strengthen our balance sheet.”

About Parque Arauco

Currently, Parque Arauco has 1,182,000 sqm of total GLA (Gross Leasable Area) across Chile, Peru, and Colombia. The company opened its first shopping center in Chile in 1982, expanded to Peru in 2005, and entered Colombia in 2008. For more details, visit the company’s website: www.parauco.com.

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