51
51
100
72
46
57
91
38
157
87

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

Deloitte: Inv't In Retail Sector Will Reach €3.046bn in 2017

23 November 2017 - Expansión

Shopping centres have reached their cruising speed. After breaking all records last year, with a transaction volume of €3.769 billion, investment in the sector is maintaining its strong dynamism and could reach €3.046 billion by year-end. That would represent the second highest annual figure for a decade, according to research by Deloitte for The Shopping Centre Handbook.

So far this year, investment in shopping centres has amounted to €2.296 billion, which represents 30% of the total volume invested in the non-residential real estate market in Spain. Moreover, the remaining weeks of the year are expected to be particularly busy, which should allow the figure to exceed the €3 billion threshold in 2017.

Historical operations, such as the purchase of Xanadú (Arroyomolinos, Madrid) by the British fund Intu Properties for €520 million and the subsequent sale of 50% of that asset to TH Real Estate for €264 million; and the acquisition by Klépierre of Nueva Condomina, in Murcia, for €230 million, have catapulted investment this year despite the fact that, if the outstanding operations in the pipeline materialise, the total volume will be 19% lower than in 2016.

Record operation

Compared with other countries in Europe, Spain is consolidating its position as the third largest market in terms of investment, accounting for 16% of total volume. In this sense, the purchase of Xanadú leads the ranking of the largest operations transacted in Europe this year. Nueva Condomina also features in the list of top 5 deals, together with the purchase of Rathaus Galerie Leverkusen, (Germany) and Le Befane Shopping Centre (Italy), both of which were acquired by Union Investment, for €220 million and €244 million, respectively.

“Investors in shopping centres in Spain believe that the strong macroeconomic outlook will continue to boost household consumption and with that, the valuation of retail assets”, said the Partner in Financial Advisory at Deloitte, Javier García-Mateo.

In terms of the investor profile, García-Mateo explains that this year, "the stage has been shared by Spanish Socimis, which have seen their stake of total investment fall to 16%, to the benefit of international funds, which are looking to build large multi-country platforms”.

The Director of Financial Advisory at Deloitte, Ana Granado, also points out that this year, financing for shopping centres amounting to between €1.2 billion and €1.5 billion has been closed. “The traditional banks are being joined by a select group of alternative providers of capital, which are willing to finance the development of land and projects in the transformation and renovation phase”, she said.

Regarding the supply, currently, the average commercial density of shopping centres in Spain amounts to 285 m2 for every 1,000 inhabitants. By province, Zaragoza (with 638 m2 for every 1,000 inhabitants) and Las Palmas (with 641 m2 for every 1,000 inhabitants) are the Spanish provinces with the highest commercial density. At the other end of the spectrum are Lérida, with 40 m2 for every 1,000 inhabitants and Gerona, with 65 m2 for every 1,000 inhabitants.

Renovation

In terms of the commercial park, José María Espejo, Senior Manager at Deloitte Financial Advisory, indicates that 45% of the current supply of shopping centres is showing signs of significant technical obsolescence. “Any renovation processes will have to go hand in hand with some major capex investment”, he said.

According to Deloitte’s calculations, the amount of investment required to reposition the obsolete assets amounts to around €1.08 billion.

By way of example of some of the shopping centres that have been repositioned in recent years, La Moraleja Green, in Madrid stands out, with an investment of €10 million. That shopping centre, located in Alcobendas and inaugurated in 1995 is owned by Kennedy Wilson, which bought it from ING Real Estate in December 2015 for €71 million. Meanwhile, Unibail Rodamco, has invested €148 million in the repositioning of the Glòries shopping centre in Barcelona and Intu has spent €12 million on improvements at its shopping centre in Asturias.

Omni-channels

In terms of challenges for the future, commercial spaces are going to have to adapt to cater for the new habits of consumers and to make e-commerce an ally.

According to the report, shopping centres are at very preliminary levels of evolution and only the most advanced have online shopping platforms, mobile applications and loyalty programs for their clients.

Specifically, the level of omnichannel use of shopping centres in Spain amounts to 33%. By category, retail outlets achieve the highest degree of omnichannel use, whilst shopping centres bring up the rear in terms of their degree of digitalisation.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

 
The Profits Of Spain's Top 5 Socimis Rise By 68%

16 November 2017 - Expansión

Spain's principal Socimis are continuing to register record-breaking numbers and improve their balance sheets thanks to the on-going real estate boom and the appreciation of their assets. In this way, during the first nine months of the year, Merlin, Colonial, Hispania, Axiare and Lar España saw their combined net profits soar by 68% and the value of their property portfolios rise by 35%.

In total, the largest five Socimis that trade on the Spanish stock market earned €1,306 million during the nine months to September 2017. Their revenues during the same period amounted to €797 million, up by 30% compared to the first nine months of 2016. The reason why these companies earn more (profits) than they turnover (revenue) stems from the significant capital gains that they record from the appreciation of their real estate portfolios. In this way, for example, Merlin Properties and Hispania recorded €332.6 million and €204.82 million, respectively, for this concept, during the first 9 months of 2017.

These five real estate companies, which, with the exception of Colonial, debuted on the stock market just three years ago, currently own combined assets worth €24,295 million. Of that volume, two of the companies stand out due to their size: Merlin, which although it did not update its portfolio in the third quarter, is still the largest entity with an asset volume of €10,556 million; and Colonial, which owns properties worth €8,253 million.

Consolidation

The success of the Socimis, together with the good times that the real estate sector is enjoying, has led these companies to enter a new phase. In this way, after years of intense competition, the companies are starting to rotate their assets, by selling the properties that are not strategic as well as those that have reached a certain degree of maturity in their portfolios.

Such is the case of Merlin, which at the start of the year sold its hotel portfolio to Foncière de Murs Lar, for €535 million, and has deconsolidated its residential branch through Testa. Lar España has done something similar, given that in September it sold an office building to Colonial for €32.5 million, to focus on its current strategy of commercial assets.

Meanwhile, Hispania, which will focus its activity on hotels until its extinction, planned for 2020, is continuing with the unitary sale of homes and is also preparing the sale of its office portfolio, although it has had to postpone that operation until the first quarter of next year in light of the Catalan crisis.

These real estate companies are also backing investments that involve the revaluation of the assets they have acquired. Such is the case of, for example, Merlin, which after absorbing the real estate portfolio from Metrovacesa, is updating its portfolio, with an investment of €95 million to renovate six shopping centres. The Socimi in which Santander and BBVA hold stakes is also investing another €46 million in the construction of a new office tower (Torre Chamartín) in Madrid and in the renovation of Torre Glòries. Meanwhile, Lar España has managed to increase the value of its portfolio by more than €230 million with respect to the purchase price of its properties.

Moreover, the market is preparing for consolidation between the Socimis. The first move in this sense came last Monday with the launch of a takeover by Colonial for Axiare. The former announced the purchase of an additional 13.3% stake in Axiare on Monday and a takeover bid for the remaining 71%.

Stock market

Merlin, Hispania, Axiare and Lar raised almost €2,560 million in their respective debuts on the stock market and they have a combined market capitalisation of €9,060 million.

Including Colonial, whose General Shareholders’ Meeting approved the adoption of the special tax regime for Socimis in June, with retroactive effect to January, the stock market value of the large Socmis amounts to €12,038 million. In addition, Colonial’s bid for Axiare has raised its stock market value by €154 million in three days.

Original story: Expansión

Translation: Carmel Drake

 
Valliance Puts Asset Portfolio On Madrid’s Gran Vía Up For Sale

17 November 2017 - Eje Prime

Valliance, the real estate services company specialising in investment operations, is reactivating the real estate sector on Gran Vía. The company has been selected to coordinate the sales process of a real estate portfolio comprising residential and commercial properties in one of the most iconic buildings on Gran Vía, Madrid.

Located between Plaza de Callao and Plaza de España, a Madrilenian family office has engaged Valliance to sell three residential units and five commercial assets.

All of them are located in one of Gran Vía’s most well-known buildings, which was constructed in 1923 and which has a comprehensive listing. “The scarcity of assets of this kind for sale on Gran Vía means that this portfolio represents a great investment opportunity”, explains Belén Díaz, Director General at Valliance in Spain.

Valliance is a real estate services company that specialises in real estate investment, divestment and value-enhancing operations. It advises on the buy- and sell-side of all kinds of real estate assets, including offices, shopping centres, retail premises, logistics warehouses and hotels.

The firm works in the Spanish market, as well as in the United Kingdom through a partnership with Lambert Smith Hampton. It also collaborates with partners in Lisbon and other European capitals to render its services. The company is also the capital markets arm of Gesvalt.

Original story: Eje Prime

Translation: Carmel Drake