offices Market News: Spanish Real Estate Intelligence

Popular Values The Complex That Was Going To House Its New HQ At €400M

17 October 2017 - Expansión

Popular has increased the book value of the real estate complex that was going to house its future headquarters to almost €400 million. The complex, which is still under construction, is being built on two plots that Popular purchased from Vocento in 2008. The plots span a surface area of more than 100,000m2, alongside the A2 motorway in Madrid. The market valuation of the headquarters could amount to €200 million, according to calculations by real estate experts.

The property is one of the unique assets inherited by Santander following its purchase of Popular. For the time being, the group will retain control of the headquarters, given that it has not been included in the batch of assets that Santander is going to transfer to the company that it is going to constitute together with Blackstone. That new company, in which the US firm is going to hold a 51% stake and Santander a 49% stake, will manage the damaged portfolio inherited from Popular. The company will be born with assets on its balance sheet with a gross value of €30,000 million.

Two buildings

The corporate complex of the former Banco Popular comprises two independent buildings, located on both sides of the A2. One of them, on Calle Abelias, is already finished. The second, on Calle Juan Ignacio Luca de Tena, is still under construction. The initial forecast was that the building work would be completed this autumn.

The book value of the property on Calle Abelias amounts to €132 million, according to the most recently published figures, which relate to December 2016. Of that total value, €44 million relates to the cost of the land and €93 million to the investment in the construction of the building. The sum of those two figures equals €137 million, from which €5 million has already been deducted for cumulative depreciation, to arrive at the aforementioned figure of €132 million.

In terms of the building on Calle Luca de Tena, the cost of the land amounts to €112 million. Meanwhile, the value of the construction in progress amounts to €149 million at year-end, up by €74 million compared to 2015. The sum of the two figures gives a global value of €261 million.

The property that has already been finished, on Calle Abelias, was inaugurated in January 2013 and houses Popular’s technological headquarters. The IT migration is one of the most sensitive elements of the merger currently underway between Santander and Popular (…).

Four headquarters

Following the purchase of Popular, Santander now has four large corporate centres in Madrid. On the one hand, it has the Ciudad Financiera, its central headquarters, located in the Madrilenian town of Boadilla del Monte. That building was inaugurated in 2004, has a surface area of 250 hectares and comprises nine office buildings (….). Santander also owns Banesto’s former corporate complex, located on Calle Mesena in Madrid, which is home to the Santander España division. Meanwhile, the group owns the historical headquarters of the now extinct entity Banif, specifically, the small palace located on Castellana 24, which has housed the central services of Openbank, the group’s digital bank since this summer.

Original story: Expansión (by M. Martínez)

Translation: Carmel Drake

 
Insur Launches Its Co-Working Business With 1,800m2 Space In Sevilla

17 October 2017 - Eje Prime

Insur is moving into the co-working sector. The Andalucían real estate company has launched an iSspsaces business centre in Sevilla. The building, which has a surface area of 1,800 m2, contains 30 offices, three meeting rooms and one training room with capacity for 80 people. With this move, the group is following in the footsteps of WeWork and Spaces, which have both opened their first centres in Spain in the last month.

This is the first space of its kind in Andalucía, “a place adapted to the new needs of companies that are looking to bring themselves in line with current models of working”, explains the Director of Insur, Alejandro Fernández.

According to Fernández, “the total saving in terms of investment in this business centre compared to a traditional office is 84.7%”. The offices measure 5nm2 each, with space for between one and ten desks.

iSspaces is located in the Edificio Insur, on Avenida de Diego Martínez Barrio 10, in Sevilla, next to some of the city’s strategic transport hubs, such as the San Bernardo metro and train station, several bus stops, the Santa Justa train station and with fast access to the motorways linking with Málaga, Cádiz and Huelva.

The co-working business is entering Spain with a vengeance in 2017, as shown by several investments undertaken in recent months in Barcelona and Madrid. In the Catalan capital in September, the North American multinational WeWork, which specialises in the management of coworking spaces, leased an office building in the 22@ district of Barcelona, thanks to an agreement signed between the real estate developer Grupo Castellví and the real estate funds Stoneweg and 1810 Capital Investments, according to Eje Prime. Moreover, during the same month, the company also signed a lease for another property in Madrid, owned by Colonial, on Paseo de la Castellana.

Similarly, another company in the sector, Spaces, has opened an office measuring 1,500 m2 in the centre of Madrid, on Calle Manzanares, whilst it awaits the opening of its first centre in Barcelona, in the 22@ district.

Original story: Eje Prime

Translation: Carmel Drake

 
Madrid Attracts Many Of The Companies Relocating Their HQs From Cataluña

10 October 2017 - Expansión

Over the last 10 days, several companies with their headquarters in Cataluña, such as Oryzon, Dogi, Eurona, Proclinic and Sabadell have announced that they are moving their HQs outside the region. Oryzon has established its registered address on Carrera de San Jerónimo in Madrid (...) and the telecommunications operator Eurona has also moved to the Spanish capital (...). Meanwhile, Proclinic has announced that it is moving its headquarters to Zaragoza; Sabadell is moving to Alicante; CaixaBank to Valencia; Gas Natural and Abertis to Madrid, in both cases; and Catalana Occidente is still considering if/where to move.

According to sources consulted, no effective consultations are being carried out at the moment, but Madrid is becoming one of the major alternatives. Prime rents are higher in the capital than in Barcelona, ranging between €25/m2/month and €35/m2/month along Paseo de la Castellana, and peaking at historical maximums of €37/m2/month in Torre Serrano. Meanwhile, in Barcelona, the average rent in the city centre amounts to €19/m2/month, reaching maximums of €24/m2/month on Avenida Diagonal. In any case, the performance of prime rents in both cities has been very good so far this year, with growth of 9% in the last quarter with respect to the same period last year, according to CBRE (…).

In terms of absorption, 128,108 m2 of space was leased during the second quarter of the year in Barcelona and 156,334 m2 of space was leased in Madrid. Availability is greater in Madrid, at around 12%, compared to 8% in the Catalan capital.

According to José Miguel Setién, of JLL, whilst it is really hard to find spaces of 3,000 m2 on Avenida Diagonal, there is more high-quality space available in the business district in Madrid, due to the renovations that have been carried out since 2013. As such, the market for medium-sized operations has performed exceptionally well there, even during the summer.

Overall, it is estimated that 1.5 million m2 of surface area is available in Madrid; of which 220,000 m2 is free in the centre of the capital, according to Ángel Estebaranz, National Director of Offices at Aguirre Newman. There is space available in several well-known offices such as Torre Foster, Torre Europa, Castellana 81, Castellana 77, Castellana 200 and Plaza de la Independencia, mostly grade A renovation products. Even Torre Picasso has almost two floors available, which would allow the right tenant to locate its corporate headquarters in one of the most iconic buildings in the city (…).

When it comes to choosing a new location, the nature of the company’s business plays a critical role. In this way, financial and legal companies tend to locate their offices in the business centre of cities, whilst pharmaceutical companies, for example, position themselves between the M30 and M40 ring roads, since they do not require such iconic buildings, but do need a lot of space, available in areas such as Campo de las Naciones, Alcobendas, Moraleja, Sanchinarro... Tech firms, like Google and Amazon, tend to establish themselves within the city centre but not in prime areas, such as Atocha, for example. Meanwhile, publicity firms are moving to Chamberí, with WPP and Havas’ new headquarters to be located in that neighbourhood, and Telcos are concentrating in urban areas of the city with rents of between €22/m2/month and €25/m2/month, says José Mittelbrum, National Director of Offices at CBRE (…).

Original story: Expansión (by Lucía Junco)

Translation: Carmel Drake