Unibail-Rodamco in near-$1 bln Austrian mall buy

LONDON, May 22 (Reuters) - Unibail Rodamco UNBP.PA has bought almost half of Austria's biggest retail and leisure mall for 607 million euros ($956.8 million), giving a 5 percent rental yield.

In one of the biggest European commercial property transactions since the onset of the credit crunch, Unibail-Rodamco said on Thursday it bought 140,400 square metres (1.51 million sq ft) in Shopping City Sued, to the south of Vienna, from private family trust Hans Dujsik Privatstiftung.

However, Richard Bloxam, director of European retail capital markets at vendor advisor Jones Lang LaSalle, played down the deal’s significance for broader mainland European property markets, which are seen set to follow the UK down.

“One swallow does not make a summer,” he told Reuters, arguing the prime shopping centre sector was different to other property sectors in that it was “not the territory of highly leveraged buyers” and was dominated by experienced property funds and property firms. Bloxam said a report in December which cited a Jones Lang LaSalle audit and said the sale of Shopping City Sued could have raised up to 800 million euros was false.

He also said Unibail had scope to improve profits at the 32 year-old landmark mall because retail rents in Austria were relatively low and because the firm also owned the rival Vienna mall of Donau Zentrum, giving it a strong negotiating position with retailers.

Unibail-Rodamco, Europe’s largest listed property company, said it was the single biggest shopping centre transaction in the group’s history.

Buying and selling of commercial property across Europe was almost 40 percent lower in the first three months of 2008 than in the same quarter of last year at 36.7 billion euros, Bloxam said.

He also said property transactions agreed in the second quarter and completed in the third and fourth quarters would probably be more indicative of the true underlying state of broader European property valuations, which were likely to drift downwards. (Reporting by William Kemble-Diaz; Editing by Sue Thomas)