Grupo Villar Mir has decided to put the project to construct a fifth tower in the Cuatro Torres Business Area on the Paseo de la Castellana in Madrid on hold. The project was going to involve an investment of €500 million, but instead the group will focus all of its financial resources on the clean up of OHL.
The construction company, in which the businessman Juan Miguel Villar Mir holds a majority stake (59.8%), has announced a €1,000 million capital increase to reduce its debt and strengthen its balance sheet. Villar Mir has been investigating different ways of obtaining the more than €500 million it needs to finance the operation and avoid a reduction in its stake in the company. The businessman has been forced to sell some of the capital that he held in two listed companies, Colonial and Abertis. He has raised €559 million through these two operations.
Moreover, at the end of June, Villar Mir engaged the real estate consultancy Aguirre Newman to sell Torre Espacio, the other skyscraper that the group owns in the complex on the Castellana. Villar Mir hopes to receive €650 million for the building. However, the process is being drawn out by the fact that, to date, the group has not received any offers that meet its expectations. The company has decided to invite more investors to participate in the process, which was initially scheduled to close this summer.
Grupo Villar Mir was awarded the plot of land behind the Cuatro Torres complex a few months ago….after it committed to pay an annual fee of €4 million for the use of the land for the next 75 years.
On the newly acquired plot, which has a surface area of 33,325 m2 and 70,000 m2 of buildable area, Juan Migual Villar Mir was going to allocate 53,000 m2 for social use (i.e. to provide some kind of public service). The remaining 16,500 m2 was going to be allocated for commercial use, with a further 33,647 m2 of green space.
Villar Mir had hoped to lease the building to a hospital group, which would dedicate the majority of the space to its own centre and the remaining floors to research. (…).
Meanwhile, Villar Mir reached a pre-agreement with the USA company Mount Sinai, to open a Spanish branch of its prestigious New York medical centre in the future tower. However, the US firm was not convinced by the structure of the building; it would rather rent a less tall building, which is more practical for a hospital and with a more affordable rent.
Without a tenant, it will be difficult for Villar Mir to tackle such an expensive project. In addition to the €300 million that it will have to pay for the plot of land, by means of the annual fee of €4 million over 75 years, Villar Mir will have to spend at least another €140 million on the construction of the new building.
The group and especially its president do not want to give up on the project and are still working on a solution. The search continues for a tenant in the hospital sector or from the world of education, to open a centre of reference in the building. Another alternative for Villar Mir would involve the redesign of the project and the construction of several high-rise buildings, rather than a single skyscraper.
Original story: Expansión (by R. Ruiz and C. Morán)
Translation: Carmel Drake
Translation/Summary: Carmel Drake