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industrial Market News: Spanish Real Estate Intelligence

Barings Acquires 2 Logistics Assets in Madrid for €17.6M

11 December 2017 - Eje Prime

Barings Real Estate is closing its ambitious expansion plan for Spain in 2017. Just weeks after it purchased a 29,000 m2 logistics centre in Zaragoza, the international manager has acquired two assets in Majadahonda (Madrid) for €17.6 million; the same amount it spent on the operation in the Aragonese capital.

The fund has acquired a warehouse and a gas station, which span a combined land area of 10,900 m2. The company has also announced that it will lease the centre to the multinational furniture retailer Conforama under a ten-year contract.

With this new acquisition, Barings has accumulated a portfolio of non-residential assets in Spain worth almost €100 million during 2017. In April, the manager purchased a logistics space in Madrid measuring 56,000 m2 for €35 million and in July it bought an asset measuring 1,600 m2 for €21.6 million. In addition to the two centres it acquired in the last month, the company has now spent €90 million in Spain.

Original story: Eje Prime

Translation: Carmel Drake

 
Singapore's Sovereign Fund GIC Lists its Logistics Socimi on the MAB

5 December 2017 - El Economista

Singapore’s sovereign fund GIC has obtained the green light to debut the logistics Socimi that it owns in Spain on the Alternative Investment Market (MAB), according to a statement by the exchange.

The Socimi in question is P3 Spain Logistic Park, which owns eleven logistics centres, as well as one solar panel farm. Its asset portfolio is worth €30.3 million, and so it has set the price for its debut on the stock market at €5.66 per share.

The logistics complexes have a combined surface area of 321,392 m2 and are located in five autonomous regions, although the majority are situated in Madrid and Castilla La Mancha.

Specifically, four of them are located in Madrid, two in Zaragoza, two more in Toledo and one in each of Bilbao, Quer (Guadalajara) and Valencia, respectively. Their surface areas range between 7,729 m2 and 80,037 m2.

In terms of the solar panel farm, it is also located in the Aragonese capital (Zaragoza) and is connected to Endesa Distribución’s network.

The Socimi has leased out all of its logistics centres, each one to a different centre. Its tenants stand out due to the great variety of sectors to which they belong.

Main tenants

According to the firm, its main tenants at the moment include the household appliance manufacturer BSH, the pastry distribution firm Conway, La Casera (Schweppes) and Seur.

In addition, its other tenants also include the furniture firm Arc Distribución, the manufacturer of rubber parts for the automotive sector Saargummi, the company that cleans plastic food containers Europool, the express parcel delivery firm DHL and the cold storage company Montfrisa.

Together these tenants provide the Socimi with annual rental income of €3.44 million, according to information provided in the IPO information brochure.

In the financial section of that document, the Socimi reports that it holds debt of €204 million with its main shareholder, in other words, with the State of Singapore, although that liability does not have a fixed maturity date. The sovereign fund itself will determine the timing and amounts of the debt plus interest that it asks to return.

P3 Spain Logistic Park is coming onto the market at a time when it is also analysing new asset investments, including “turnkey” projects and those already constructed, provided they fulfil the requirements of the firm’s growth strategy.

According to the information brochure, this business policy involves buying logistics assets used primarily for the distribution and storage of goods, which are located in the centre of the country or along the Mediterranean corridor, and which are guaranteed to generate “consistent revenues” over the medium term.

The Singapore fund’s Socimi states that it is an owner with a long-term investment profile, and so it rules out the sale of any of its assets (for the time being).

Original story: El Economista

Translation: Carmel Drake

 
Knight Frank: Inv't in Logistics Will Amount to €1.2bn in 2017

4 December 2017 - Eje Prime

The Spanish logistics sector is on the right track as the industry approaches the centres of the country's largest cities. The new methods of consumption, which demand greater speed when it comes to receiving a product and the increase in the volume of online purchases, has led to a rise in the leasing of logistics land in Spain, in particular in the regional capitals. During the nine months to September, investment in the market amounted to €550 million and that figure is forecast to reach €1.2 billion before the end of the year.

Spain’s Gross Domestic Product (GDP) is growing at a rate of 3% p.a., and the index is not escaping the gaze of international investors, who are placing their trust in the country. This has been demonstrated by the largest logistics operation recorded so far this year involving P3 Logistics Parks, the developer controlled by the sovereign fund of Singapur GIC, which paid €243 million for GreenOak’s logistics portfolio in April, according to a report from the consultancy firm Knight Frank.

In addition to Madrid and Barcelona, several other large regional capitals have benefitted from the investments made in the purchase of industrial land on the outskirts of cities. Such is the case of Valencia, in the adjoining town of Ribarroja, where the largest operation was signed during the third quarter of the year. There, TH Real Estate acquired a Carrefour logistics platform measuring 55,000 m2, on a plot with a surface area spanning 87,000 m2.

Focusing on the Community of Madrid, the report points out that the absorption of logistics space has soared this year. The figures for the third quarter of the year, when 675,000 m2 of space was leased, exceed the surface area recorded during the whole of 2016 in the Spanish region. The international consultancy firm forecasts that Madrid will close the year with absorbed logistics surface area of around 800,000 m2.

The large deals notably drove the increase in the surface area leased in the country. Seven of the transactions signed in the sector during 2017 involved assets spanning more than 40,000 m2.

Prime yields, on the rise in Madrid and Barcelona 

In a survey of international investors conducted by Knight Frank, 51% of those questioned chose industrial and logistics assets as their preferred asset type for investment over the next five years. This investor appetite has led to an increase in the price of Spanish industrial land. Prices in the logistics market are on the rise, although yields are remaining stable.

In the market for logistics assets in Madrid, prime rents amount to around €5.25/m2. The forecasts indicate that the increase in demand and the improvement in the quality of new logistics facilities will lead to an average annual increase in rental prices in the region of around 3%.

Meanwhile, in Barcelona, the price of prime logistics land is even more expensive at around €6.85/m2. If we look at a map of Europe, the Catalan capital is the seventh most expensive city, and the most expensive, by far, in the south of the continent. In this sense, Barcelona, where land is already more expensive than it is in Frankfurt (€6.65/m2), is only exceeded by Amsterdam (€7.10/m2), Munich (€7.10/m2), Dublin (€8.15/m2), Helsinki (€10/m2), Geneva (€14.55) and London (€15.25/m2).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake