Villar Mir & IE To Sign An Agreement For Fifth Tower

26 January 2016 – El Confidencial

Nine months after winning the bid arranged by the Town Hall of Madrid to construct a skyscraper in the capital’s new financial district, Grupo Villar Mir has reached an agreement with Instituto de Empresa (IE) to allow the business school to occupy the majority of the building.

El Confidencial has confirmed with several sources close to the negotiations that the two parties expect to sign an agreement this week. And that signature will signal the starting gun for Madrid’s new skyline, as well as ensuring the viability of the project after several months of uncertainty.

The future picture of the five skyscrapers underwent some serious difficulties last summer when the initial candidate proposed by Grupo Villar Mir, the prestigious Mount Sinai hospital group, decided not to go ahead with its plans to open a health centre in the fifth tower.

In fact, the owner of OHL was awarded the land on the basis of the proposal that it would house a private hospital, with recreation and retail service areas. The plans were presented together with a letter of intent from Mount Sinai, saying that it would occupy the fifth tower, but that ended up being worthless.

Following the exit of the US group, Villar Mir began making contact with several real estate consultancy firms to find a new tenant that would comply with the requirements imposed by the town hall, namely that the property must be used for health or education purposes. Those conversations have ended up with the proposed agreement with the IE Business School.

The prestigious centre, whose MBA has just been chosen as the 12th best in the world and the best in Spain according to the Financial Times, is continuously looking for spaces to expand its educational offering. As such, it is now the neighbour with the most properties in the prestigious neighbourhood of Salamanca, which is home to its different centres, above all, around Calle María de Molina.

With the move to the fifth tower, the educational empire controlled by Diego del Alcázar would expand its classrooms beyond its traditional area of operation, but would maintain its policy of operating within Madrid and in the most representative areas for the business world.

75 year concession

The fifth tower is expected to be completed within four years, by 2020. It is an ambitious plan, which Grupo Villar Mir will tackle in partnership with the Swiss fund Corestate. The two partners have created the company Iberian Corestate, whose first operation will involve the investment of €240 million in the new skyscraper.

On the basis of the original design that won the bid, the new building will have 52,500 m2 of public space and 17,500 m2 of retail space. It will be constructed on land that will continue to be owned by the town hall, but which will be operated by Grupo Villar Mir for the next 75 years.

The group was awarded this concession after committing to pay a fee of €4 million per year to the town hall for the duration of the concession period, a figure that is much higher than the €1.9 million bid starting price.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

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