Blackstone, Cerberus, Apollo, Intu & Singapore’s Government Poach Real Estate Bargains in Spain

6/10/2014 – Expansion

Blackstone, Cerberus, Apollo, Intu, the Singapore Sovereign Wealth Fund and China’s richest man are only few examples of big-name international investors who have carried out significant transactions on the property market in Spain over the past months.

In its latest report, CBRE Spain tries to answer the question what is the investor boom due to? Presently, the country’s market is the third hottest in Europe, ranking just behind the United Kingdom and Germany. Unlike its opponents, Spain has got up its sleeve historically low property prices and pretty positive outlook for economic recovery.

‘Since first real estate purchases back in July 2013 by foreign private equity firms like Goldman Sachs or Blackstone, we have observed a money-pouring fever on the part of all kinds of investors, ranging from international funds, private equity and family offices, as well as other locally found partners and sources of capital’, says Alejandro Campoy, general director for Investment at Aguirre Newman.

Their arrival marked the Spanish non-residential sector with a €3.23 billion FDI (Foreign Direct Investment) spent on offices, retails and logistics hubs.

What are they looking for? Great majority of foreign equity groups strives at value-adding and they do not hesitate to buy a property requiring refurbishment as long as an attractive discount is applied. For instance, a joint venture established by Baupost, Green Oak and Socimi (REIT) Lar acquired six retail parks for €160 million in total. To compare, Oaktree alone bought the Gran Vía de Vigo shopping center for €115 million.

Other, more conservative investors opt for prime assets rented by trustworthy tenants. To give an example, the headquarters of IBM has been purchased by Mexican group Financess, while the one of Vodafone by London & Regional Properties for €117 million.

Aside from custom investors from the U.S.A. and Europe, last months have also seen equity flowing from sovereign wealth and pension funds of China, Korea and Singapore. From January to June, the Asian countries mainlined €368 million, whereas during the entire year 2013 the amount post €50 million.

The most recent Asian investment examples are: the purchase of 30% stake in Spanish property manager GMP for more than €200 million by Singapore Sovereign Wealth Fund (GIC) or the hotel-entertainment project of Wang Jianlin, the richest man of China who bought the Edificio España iconic building in Madrid earlier this year.

When it comes to corporative investments, Spanish Socimis shone on this field like stars. With support of billionaires like George Soros or John Paulson and big-name companies like Cohen & Steers, Pimco or Goldman Sachs, all freshly listed REITs could do property shopping for more than €1.6 billion year-to-date.

 

Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE

Saba Aparcamientos Increases Capital By €120 Mn

6/10/2014 – Expansion

Saba reorganizes its structure with view to adding the municipal car parks in Barcelona and to ending refinancing of its indebtness estimated at between 450 and 500 million euros.

At the latest shareholders’ meeting. it has been agreed that on October 23rd the equity of Saba Aparcamientos (Parkings, translator’s note), which is an affiliate of the Saba infrastructure group, will be increased by €119.7 million in total. Approximately half of it, €58.15 million, proceeds from the sale of logistics hubs to Prologis, a transaction that took place in August. The amount will be intended for paying management fees of €232 million to the City Hall of Barcelona which will administer the 26 car parks over the upcoming 25 years.

The other part of the total, €61.5 million, will be raised through asset transfers. From now on, Saba Aparcamientos will exclusively manage all car parks of the group.

The debt restructuring concerns 180.000 parking spaces the group led by Josep Martínez Vila owns in Spain, Portugal, Italy, France and Andorra.

 

Original article: Expansión (by Artur Zanón)

Translation: AURA REE

BBVA Puts Up For Sale Madrid Downtown Torre Saint Gobain Tower

Another piece of news from the Azca business and retail complex in the financial heart of Madrid. Only few days ago, information about a tender of one of the most desired plots in the Spanish capital, namely the parcel located on the Paseo de la Castellana street, between the tower of BBVA and the Nuevos Ministerios light railway station and just in front of El Corte Ingles store, leaked out.

Now BBVA itself is selling another juicy asset, its impressive Torre Saint Gobain skyscraper (pictured, in the background), situated at 77 Paseo de la Castellana street,  adjacently to the bank’s headquarters, El Corte Ingles and at a few meter distance from the famous Torre Picasso, owned by Amancio Ortega.

The 18-story (above ground level), 70 meter tall property disposes of a 16.000 square meter area in total. Moreover, it goes six floors deep into the ground where its parking lots, warehouses, instalations and services are found. CBRE España will advise on the operation.

According to experts, given the size of the property, the landlord may obtain between 22 and 3o euros for each square meter monthly, giving a 6% yield and an estimated asking price of between 70 and 100 million euros. The skyscraper was bought by BBVA in 2003 and that time the entity paid €87.5 million for it. However, specialists remark that the building requires refurbishment, a cost to be born by the future purchaser.

The Ederra tower – as it is known in the Azca area – used to be the premises of the Saint Gobain Cristalería group. Rental contract with this firm expired last year.

Over the last three years, Madrid’s office market has witnessed many large-magnitude operations like this one. The most recent took place in May 2014, when the Castellana 200 bulding changed hands. It was bought by PSP Investments for €140 million, after pretty troublesome sale process.

To give more examples, at the end of 2013, Abu Dabi and its investment fund IPIC barged in the market and acquired the Torre Foster building for €450 million.

 
Original article: El Confidencial (by E. Sanz & M. Lamelas)
Translation: AURA REE

Socimi Merlin Properties Pays €130 Mn For Five Office Buildings in Madrid

3/10/2014 – Expansion

Socimi (Spanish counterpart of a REIT firm) Merlin Properties has just made public an acquisition of five office buildings located in the capital of Spain. The amount, €130 million, was ‘fully disbursed from its own funds‘.

The transaction was carried out by the Socimi’s branch Merlin Oficinas. The portfolio sold by Levitt comprised ‘modern and efficient’ (in energy terms class A) properties of a total of 34.715 square meter gross lettable area (GLA).

The buildings are found in the A1 office area, ‘the business downtown of the northern Madrid’, and they house such prominent tenants as Philips (pictured), Vestas or Neoris.

In total, the Socimi possesses GLA greater than 575.000 square meters ‘generating a gross annual rate of return of more than €122 million’.

 

Original article: Expansión

Translation: AURA REE

Fairmont Settles in Rey Juan Carlos I Hotel in Barcelona

3/10/2014 – Cinco Dias

Hotel chain Fairmont has chosen Barcelona for opening its first establishment in Spain. The Canadian firm will manage the Rey Juan Carlos I hotel (named after the previous King of Spain, translator’s note), operated by now bankrupt Husa until 2013.

The establishment will be renamed the Fairmont Rey Juan Carlos I, Barcelona in the upcoming months and renovated next year. The 432-room hotel belongs to Barcelona Projects, controlled by Saudi Prince Turki ben Naser.

FRHI International and Fairmont chairwoman Jennifer Fox assured that ‘the asset is a jewel in our portfolio, situated in such an important city as the “entrance door to Europe”. The businesswoman also put emphasis on the poplarity of Barcelona among tourists and the role the Catalonian capital plays in the Mediterranean cruise industry.

By landing on the Spanish land, Fairmont joins other big-name hotel chains, such as Four Seasons (to open two establishments: in Barcelona and in Madrid) and Hyatt.

Fairmont manages 65 hotels all over the world, with such iconic buildings as the one on the New York Square, the Savoy in London or the Fairmont Monte Carlo.

 

Original article: Cinco Días (by L. S.)

Translation: AURA REE

Ministry of Finance Announces Sale of Seven Plots in Madrid

3/10/2014 – Cinco Dias

The Government of Spain notified of a public tender of seven residential plots owned by the General State Administration, located in Pozuelo de Alarcon (Madrid) and valued at €40 million.

According to the information included in the communication, the call for bids concludes on November 14th and the offers will be reviewed further on 27th of November.

The Ministry of Finance thought it the right move to sell the plots situated close to the Arroyo Meaques-Ciudad de la Imagen business area, as the authority had observed certain rise in demand for land in this zone. Two plots were sold within the area for almost €10 million as recently as on July 11th.

 

Original article: Cinco Días

Translation: AURA REE

Spanish Energy Office Disposes of Derelict Headquarters

3/10/2014 – El Mundo

Segipsa, Spanish Public Real Estate Management Company, sold the ghost premises of the old National Energy Office. The building was bought in 2008 for €19 million. After years of disuse, its value dropped by 40% to €11.3 million.

The property is situated at number 13 of the Barquillo street in Madrid and it was supposed to house the Energy Office as its extension. Built in 19th century, the four-storey building disposes of 3.174 square meters destined for residency. In total, there are five dwellings up and five retails on the ground floor.

Disuse and lack of maintenance over the last years led to dereliction of the property whose state was described as ‘poor’ at the latest  Building Technical Inspection (BTI) carried out by the City Council of Madrid. The bad note has been given due to ‘general state of the building structure, foundations and facades (both outside and dividing walls), as well as maintenance of the inclined and flat rooves and of the plumbing and sewerage systems’.

Apart from the building in ruin, yesterday’s auction held in Madrid included also five other property packages embraced by the State Real Estate Asset Value-Adding programme, set in motion by the Ministry of Finance. However, biddings for three of these lots were unattended. The other lot that was sold encompassed an office and 19 garage spaces on the Miguel Angel street in Madrid.

Original article: El Mundo (by Víctor Martínez)

Translation: AURA REE

Investors Storm the Residential Market

First, there were the bargains and the well-slashed prices of secondary products. Then, quality rental assets in large cities’ downtowns. Now, also land. This is how the objective of big-name investors, mainly funds and managers, has evolved since mid-2013.

‘This client has returned stronger and determined to take advantage of the improvement of the Spanish real estate market. Armed with local offices and employees, some of them acquired banking servicers but still 80% of them have not met their targets’, says Dario Fernandez, chief of the Residencial department at JLL (former Jones Lang LaSalle).

The funds heard the call of Sareb (Spain’s bad bank) and arrived in the country. Since the beginning of 2014, they have been pressing residential prices, driving the market’s recovery up. ‘This summer trend was developable land in Madrid, Barcelona and the Costa del Sol coastline. Foreign funds poach first class plots because they believe they can construct on them and benefit from the sales’, explains Fernandez.

The tendency brought the investors to poaching downtown plots sold by public administrations or repossessed by banks. ‘Transaction volume has shrunk due to tremendous number of seekers. Before, deals started at around 200 and 300 million euros but now also 50 and 60 million portfolios are taken under consideration’, remarks Mr. Fernandez. There are project offers in Murcia at a 30 kilometer distance from the coast. ‘The investors know they will be unable to sell the houses at 2.300 €/sq m each but at 1.500 €/sq m – yes’.

Thus, it is expected that in 2014 the residential investment will hit highest ever. ‘A €3 billion amount is still waiting to be spent before the end of the year. Principally, the equity will be intended for loan or directly for residential portfolios’.

Price stabilization in areas like Madrid, Barcelona, Costa del Sol and other coastal zones is the main motivational factor for staking on Spain. ‘Residential tourism market will bring us a lot of joy as in Tarragona foreigners account for 50% of all sales, while along Costa del Sol for 40%’, adds the executive of JLLS.

 
Original article: Expansión (by R. Ruiz)
Translation: AURA REE

Miami Skyline Holder Keeps His Word & Invests in Spain

2/10/2014 – Expansion

The owner of half of the Miami skyscrapers. One of the Times‘s 25 most influencial Hispanics. The number 193 of America’s richest people by Forbes. Possessing a $3.1 billion (€2.46 billion) worth of real estate. Jorge Perez, the president of Related Group, announced some time ago that he wanted to invest €500 million in the Spanish real estate. And so he did.

Presently, Mr. Perez is at the brink of closing his first acquisitions in Spain, amounting to €120 million in total.

With belief that the country’s market has got a huge potential and the moment to invest is perfect, the businessman created Related Spain. The arm is led by one of his sons, Nicolas. ‘We are setting our focus on rental buildings in big cities like Madrid and Barcelona. Also, we will target land, both in large metropolises and residential tourism areas, seeking zones where the product is diminishing’.

Perez held talks with Spanish banks and Sareb but he has not taken any decisive steps yet. ‘Most of the investments we are carrying out are agreed on with property owners directly. When it comes to the real estate investment arms of entites, we sincerely think they must still cut in asking prices’, he explained.

Competition

The investor who constructed, developed and managed over 100.000 residences, properties and condominia in the U.S.A., admits that over the last months in Spain the competition has grown pretty fierce. ‘Above all, around rental assets in Madrid and Barcelona. Return from this product brings similar rate as in the United States and other countries’, Mr. Perez adds.

Spanish home prices went up 0.8% year-on-year in the second quarter of 2014, marking the first rebound since the Q1 2008. The chairman of Related Group is conscious that opportunities may fade out in mid-term. ‘I think there will be further value loss, especially in case of land, but it is also clear than in the upcoming months will see bargains thinning out. However, I believe that there is a huge volume of finished housing stock and hectares of land awaiting their sales’.

The magnate does not seem disturbed by the uncertainty of the Catalonian region and neither he rules out seeking opportunities in Italy and Portugal.

 

Original article: Expansión (by D. Badía)

Translation: AURA REE

New Owner of the Edificio España Ponders Creation of a Huge Complex in Madrid

2/10/2014 – Cinco Dias

Chinese magnate Wang Jianlin bought the historic Edificio España building in Madrid for more than €200 million back in March. Now, the richest man of China weights up construction of a grand shopping and entertainment center in the Community of Madrid, informed regional chairman Ignacio Gonzalez.

Target location of the project has not been disclosed and Mr. Gonzalez assures this venture has got nothing in common with the Eurovegas – the unsuccessful plan on raising a fun park proposed by U.S. most affluent Sheldon Adelson who withdrew from it at the last moment.

The Community of Madrid’s president bitterly admits that the experience with the Eurovegas has been a tough lesson but  at the same time the city proved to be consequent and perservering in its commitments.

 

Original article: Cinco Días (after: EFE)

Translation: AURA REE