10 years of commitment

10 years of commitment to...


José Luis del Valle
Chairman of the Board of
Directors of Lar España

Today marks exactly ten years since Lar España made its debut on the stock exchange. I had the honor of ringing the bell at the Stock Exchange, opening the trading for our company. I couldn’t tell you how many market openings and closings we have completed since then. However, I vividly remember the part of my speech where I spoke about the commitment to excellence of our newly listed company, Lar España Real Estate.

We were born with the intention of bringing a vision, mission, and values to real estate management that would make us recognizable and distinguish us in the industry. I believe that ten years later, we can be proud of what we have achieved. We are at the forefront of our sector and in an enviable position to continue growing.

As I understand it, excellence consists of six essential attributes, each representing a commitment from our Board to shareholders, professionals, tenants, and end customers. Firstly, it obliges us to build a portfolio of the highest quality. Secondly, it requires us to optimize asset management, in our case through the experience provided by Grupo Lar. Thirdly, it commits us to achieve the best operational results—both recurring and resilient. The remaining three attributes, of a distinctly corporate nature, involve maintaining a healthy balance, applying best practices in ESG, and, last but not least, delivering the best returns to our shareholders.

When Lar España went public, there was a certain initial specialization in retail, the sector where prior knowledge, technological contribution, and experience are most important. We quickly defined it as our preferred asset. Over time, it became exclusive. We believe that shopping centers and retail parks go beyond being a simple financial business. Their connection to the different societies where they operate, the tastes and needs of end customers, and the strategies of operators require a high level of knowledge and, in return, generate increasing and recurring results.

Lar España continues to demonstrate this ability for constant growth. We have achieved it, even in the most adverse conditions, such as the explosion of e-commerce, the pandemic, geopolitical crises, inflation, or interest rate hikes. Our shopping centers and retail parks have always been strong and successful.

Asset rotation has always been inherent to the real estate sector, especially when dealing with a listed REIT. We have witnessed this in our journey. Currently, real estate investments in retail are gaining momentum. There may be numerous operations in the medium term, and fortunately, we are in a position to take advantage of those that best fit in terms of value increase and profitability.

We have just sold two retail parks as part of our active asset rotation policy for mature assets. As part of the modernization plan for our portfolio, we aim to increase the average size of shopping centers and retail parks through highly qualified investments. We will also intensify our policy of innovation and digitalization, always based on criteria of prudence, efficiency, and return.

Ten years after starting our journey, we hope to continue improving and evolving. The context is reasonably positive. The macroeconomy is holding up, consumption is strong, there is consensus that interest rates will decline in the not-too-distant future, making a rebound in valuations easier.

We closed a very positive year in terms of revenue and profits, and we are confident that we will continue to grow in 2024. On the stock exchange, we ended an excellent 2023, and there is still room to grow. We aim to keep looking forward. To achieve this, maintaining operational results will be fundamental. They are the key to everything else.

In these ten years, we have demonstrated a remarkable track record. We own premium assets without having bought any portfolios; all our assets have been chosen one by one. We only bought what could improve or diversify our portfolio. Our operational results are unquestionable. For many consecutive quarters, we have positioned key performance figures above the sector average. We have improved asset management compared to the average of our peers, and at the same time, the recurring nature of our income allows us to pay dividends consistently at the top of the market. And we have very controlled, low-cost, and “green” debt.

Since 2014, we have also been clear that the environmental, social, and governance (ESG) strategy is an essential guiding axis for the recognition of our various stakeholders. We are one of the few Spanish real estate companies that have certified their entire asset portfolio as sustainable construction endorsed by Breeam. We have also been the first real estate company to receive the “Reduzco” seal from the Ministry of Ecological Transition and Demographic Challenge for the cumulative reduction in our emissions. We have just approved our decarbonization policy.

Our governance model promotes the best practices identified at the national and international levels. We largely comply with the recommendations established in the CNMV Good Governance Code. Additionally, for the past five years, we have been part of the Ibex Top Dividend index. We have been recognized for nine consecutive years with the EPRA Gold Award for the quality of our financial information and six times for the quality of our public information in ESG. We contribute a specific solidarity plan for each of the communities where we operate. Each of our assets radiates interest in customers and operators, quality of life, better services, and more inclusive urban planning.

Allow me to conclude these remarks on excellence with what I believe is the clearest and most representative example of Lar España. I refer to our flagship, the Lagoh shopping and family entertainment center, created from scratch by our teams and managers. Lagoh, designated the best shopping center by Spanish and European industry professionals in 2023, is a unique project that does not compete with any other Sevillian commercial establishment and has benefited everyone. It offers a large outdoor space with a natural ecosystem, has become a driver of urban growth, and has consolidated a whole new neighborhood based on its commercial attraction.

This urban projection had its first effect in the residential area. Lagoh has been one of the reasons why the city’s urban development has shifted downstream along the Guadalquivir. Isla Natura, the Jardines de Hércules, the former Daoiz and Velarde barracks, the surroundings of the Military Hospital, or the area of Avenida de Las Razas have benefited from this momentum. The next pole of urban attraction is provided by the relocation to the future City of Justice in Seville, supported and connected with the rest of the city through the Seville metro’s Line 3 project.

In short, we create a city, contribute to inclusion, generate coexistence, and help the growth of the environments where we are located. Excellence is the only way to approach the great expectations and possibilities of a sector in constant innovation day by day. Excellence is also necessary to respond efficiently and committedly to the needs of our tenant partners, the expectations of our professionals and shareholders, and the trust of the millions of end customers who have walked through the doors of our shopping centers and retail parks over these ten years.

But our next challenge begins tomorrow, and it involves not settling, being rebellious to self-satisfaction, defending entrepreneurial ingenuity, commitment to society, and the pursuit of a better future for all. I assure you that we will do everything possible to achieve it.