SANTIAGO, CHILE-Equity International, the international private equity firm affiliated with Sam Zell's Equity Group Investments, has closed on a $50 million investment in shopping center owner Parque Arauco. The investment gives Equity International an approximately 12.5% stake in Parque Arauco, which owns and operates shopping centers in Chile and also owns interests in other shopping center owners with holdings in other Latin American countries.
Gary Garrabrant, Equity International's CEO, says that the investment group sees substantial opportunity for growth and consolidation in the South American retail sector. The investment by Equity International is expected to assist Parque Arauco with further expansion in Chile, as well as increased growth through acquisition outside of Chile, according to Andres Olivos, Parque Arauco's general manager.
In additon to owning and operating shopping centers in Chile, Parque Arauco owns a 30% interest in the Buenos Aires-based Alto Palermo Shopping Center portfolio in Argentina and a 45% interest in the Lima, Peru-based MegaPlaza Norte portfolio. As part of the investment by Equity International, the Chicago-based invesor will provide advice and counsel on Parque Arauco's strategy and direction through representation on the company's board of directors and executive committee.
Parque Arauco, which is a publicly listed Chilean company that develops and manages shopping malls in Chile, Argentina and Peru, was established in 1979. The company opened its first shopping mall, Parque Arauco Kennedy, in 1982.
Today, Parque Arauco owns 100% of Parque Arauco Kennedy and Parque Arauco Maipu in Santiago, 33.3% of Mall Marina Arauco in Vina del Mar, 31.6% of Alto Palermo Shopping portfolio in Argentina and 45% of the Megaplaza Norte Shopping Center in Lima, Peru.
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