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retail-shopping-centers Market News: Spanish Real Estate Intelligence

Deka Puts Most of its Recently Acquired Inditex Stores Up for Sale

23 April 2018 - Eje Prime

After closing one of the most important real estate operations of the year, Deka is looking to capitalise on its investment with a new knock-on effect. The German fund manager has just put back on the market the majority of the stores that it purchased at the beginning of the year from the Galician giant Inditex, in an operation worth around €400 million, according to sources close to the sales process, speaking to Eje Prime.

According to the same sources, Deka has divided the portfolio into three. The first part comprises two properties, which the fund is going to hold onto, those at number 16 Calle Preciados, in Madrid (with 2,725 m2 of retail space) and number 58 Calle Pelayo, in Barcelona (with 5,134 m2 of retail space).

The second and third parts of the portfolio are already up for sale. The aim of Deka is to divest the assets located in secondary cities (such as those located in Zamora, Albacete and Ciudad Real) by placing them on the market and also to listen to offers for the assets located in cities such as Valencia and Madrid, which, although they are not strategic for the fund, it is not in a rush to sell.

Deka, which will also hold onto one of the two properties that it purchased in Lisbon (located on Calle Augusta), acquired the 16 assets in January for approximately €400 million, and chains belonging to the Inditex group continue as the tenants of those establishments.

These two moves, both the purchase and the sale, demonstrate Deka’s interest in the Spanish market. As Eje Prime revealed, Deka’s route map involves doubling its investment volume in the country from €1 billion to €2 billion over the next five years.

Currently, the fund manager owns a portfolio of tertiary assets in Spain including the office buildings on Avenida Diagonal 640 and Sarrià Forum in Barcelona and the mixed-used (office and retail) property El Triangle, also in the Catalan capital. Moreover, the group owns the Ballonti shopping centre in Bizkaia, which it recently put on the market for around €150 million, and the Espacio Mediterráneo shopping centre in Cartagena, as well as the Hotel Meridien de Las Ramblas in Barcelona and another vacation hotel in Mallorca.

The company’s presence in the Spanish real estate sector dates back to the 1990s when it had a portfolio of assets with a very similar volume to its current size. At that time, Deka owned large spaces such as the Diagonal Mar shopping centre in Barcelona and the Castellana 35 and Castellana 79 buildings in Madrid. But, in around 2006, according to Esteban de Lope, Director of the Retail Property Fund Management Department at Deka, “an opportunity arose and we sold almost all of our portfolio at a significant profit”.

After hiding in the shadows for five years, competing in other European markets such as the French, British, Belgian and Dutch, as well as its own German real estate market, Deka returned to Spain in 2010 with the acquisition of the Avenida Diagonal 640 building.

The sale of the batch of assets acquired from Inditex coincides with the group’s desire to divest some of its businesses in Spain. Lope said that “given the nature of the market, it is easier for Deka to divest than to purchase”. “The Inditex portfolio was an exception” – says the director – “they wanted to sell quickly, but they needed to be certain that the buyer had money to invest; thus an opportunity arose, with the condition of us having to move very fast”.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

 
Bankia Relaunches Sale of c/Alcalá 1 With Asking Price of €20M

16 April 2018 - Eje Prime

Bankia can’t make up its mind about c/Alcalá 1, one of its star assets in the centre of Madrid. The Spanish bank has put paid to the first process that it opened at the beginning of the year and is now launching a new round with a minimum sales price of €20 million, according to sources in the sector.

In the previous bid, which several investment funds participated in, the finalists were Arcano and Renta, after both submitted offers amounting to around €18 million, as revealed by Eje Prime.

Despite the offers, Bankia has now decided to seek refuge in a clause that allows it to exit the process if none of the bids proved attractive and has opted to launch a new tender with a higher minimum asking price, whereby taking advantage of the boom in the market.

The asset, which due to its façade would interest restaurant operators more than fashion retailers, has two floors: the first spans 458 m2, whilst the basement measures 405 m2.

The building, constructed in 1880, has a total surface area of 3,209 m2 and has housed the offices of the Community of Madrid’s Ministry of Finance and the Economy. Although it currently houses offices, compatible uses also include a hotel, commercial, administrative, healthcare, education and even residential (…).

Bankia’s other prime assets

In addition to the property on Calle Alcalá, Bankia’s asset portfolio contains a second property located in a prime enclave in the centre of the Catalan capital. That building is the former headquarters of Bankia in Barcelona, located at number 9 Plaza Cataluña. The property has a surface area of 1,000 m2 and has attracted attention from a large number of operators.

Although the objective with the branch in Madrid was to sell it, the strategy with the property in Barcelona is not so clear. According to explanations provided by the entity to Eje Prime, there are several options on the table, including a sale, but also the rental of the building to an operator or even investing in the property to renovate it (…).

Original story: Eje Prime

Translation: Carmel Drake

 
Family Office Puts Tesla's Store on c/Serrano Up For Sale for €7M

18 April 2018 - Eje Prime

The retail sector is hotting up in Madrid. A Spanish family office has put up for sale the store at number 3 Calle Serrano, which is occupied by Tesla, the company specialising in electric cars and led by Elon Musk. Although sources close to the operation have explained to Eje Prime that the process to receive offers has already begun, the estimated price of the asset is around €7 million.

This store has been occupied by Tesla since last September after it signed a lease contract that will continue in force following the sale. The asset has a retail surface area of 247 m2 spread over two floors. There, Tesla has a showroom, a warehouse and the group’s offices in Spain. According to real estate market sources, the consultancy firm CBRE is exclusively leading the sales process.

In recent months, the retail sector has been reactivated in the Spanish capital, with both the placing of premises on the market and the renovation of assets for their subsequent rental. The latest to be added to the portfolio of establishments for sale was the branch that Bankia owns at number 1 Calle Alcalá.

Although the bank already initiated an auction, which was attended by funds such as Arcano and real estate groups such as Renta, who were offering approximately €18 million for the premises, Bankia has decided to wipe the slate clean and launch a new auction process, through which it hopes to raise at least €20 million.

The asset, which, given its façade appeals more to restaurant operators than fashion retailers, is spread over two floors: the first floor spans 458 m2, whilst the basement measures 405 m2.

And from premises for sale to premises sold. In March, the fund manager IBA Capital, together with CBRE Global Investment, finally completed the sale of number 9 Calle Preciados, in Madrid, to the real estate investment vehicle of the insurance company Generali, Generali Real Estate. The Italian group paid €100 million for the asset, which is going to house Pull&Bear's future flagship store on this high street, one of the most expensive in Spain for opening a store (…).

Investor appetite in 2018 

After closing 2017 with a total investment of €3.5 billion, the sector started 2018 with retail assets up for sale worth €2.5 billion. Moreover, during the course of this year, the volume of retail space on the national map is forecast to increase by 500,000 m2.

At the moment, shopping centres worth €2 billion are up for sale, along with high street products worth another €500 million. This situation guarantees a high degree of product availability for the segment, which is ideal at a time when Spain is very much in the firing line of international investors.

The influence of the retail market on the tertiary sector in 2017 is evidenced by the statistic that 38% of all transactions completed in this market involved retail assets, allowing retail assets to exceed office buildings for the first time ever.

With a volume increase of 36% over the last year, several large shopping centre openings are scheduled for 2018 including Open Sky in Madrid, which will see the arrival of Compagnie de Phalsbourg in Spain, after investing €160 million in the complex.

Similarly, in the Community of Madrid, the shutters will be lifted on X-Madrid, owned by Merlin, and in Málaga, McArthurGlen and Sonae Sierra will inaugurate a new designer outlet centre in the capital of the Costa del Sol. The stock of retail surface area in Spain amounts to 16.5 million m2, up by 1.4% YoY.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake