Sareb Recorded Loss Of €663M In 2016 Despite 25% Rise In Property Sales

31 March 2017 – RTVE

Sareb recorded a loss of €663 million in 2016 due to the high costs associated with the maintenance of its portfolio and the sale of its assets at a loss, despite increasing its volume of property sales by 25%.

The entity known as the bad bank highlighted the 1% increase in revenues that it recorded, to reach €3,923 million, which allowed it to reduce its debt by €2,170 million.

The entity’s main source of income last year was its portfolio of loans to property developers, whose management generated revenues of €2,846 million. Almost three-quarters of that amount came from the repayment and sale of loans, collaboration initiatives with the property developers through the Sales Promotion Plans and the sale of properties securing loans.

Finance costs amounted to €558 million

Meanwhile, in the expense caption, the company highlighted that its finance costs carried the most weight, amounting to €558 million.

During 2016, the first year of full operation with the four servicers responsible for managing the entity’s assets (Altamira, Haya, Servihabitat and Solvia), the volume of property sales rose by 25% with respect to 2015, to a total of 14,000 units, including residential assets, land and tertiary properties.

Most of Sareb’s asset sales were concentrated in Madrid, Andalucía and Cataluña

By autonomous region, Madrid, Andalucía, Cataluña and the Community of Valencia accounted for most of the bad bank’s property sales. Similarly, Sareb managed 10,500 proposals relating to the clean-up of its credit portfolio, up by 16% compared to the previous year.

Regarding its real estate business, the company recorded revenues of €1,050 million due to the “commercial dynamism” that was deployed during the first full year of operation of its servicers and to the commercial campaigns that it undertook for new builds, second-hand properties, homes on the coast, plots of land, etc.

Specifically, Sareb’s revenues from these campaigns grew by 85% to reach €220 million. Meanwhile, the number of homes put up for rent increased by 20% to 4,558 units.

Taking stock after four years

Since Sareb was launched in 2013, it has: recorded revenues of €16,864 million, reduced its portfolio by €10,806 million (21.3%); and repaid debt amounting to €9,856 million (19.4%).

Similarly, its cumulative losses during the first four years have amounted to €751 million.

Sources at the entity highlight the contribution that it has made to economic activity in Spain (€14,870 million), primarily by reducing debt, paying interest to entities that received public aid amounting to around €2,800 million and paying taxes amounting to €596 million.

In parallel, the entity explained that it has established a channel of collaboration with the public administrations in the area of social housing, which has allowed it to create a stock of 4,000 homes for social housing, and that 3,000 homes have been handed over already, and around 8,000 people have benefitted as a result.

Original story: RTVE

Translation: Carmel Drake

Gesvalt: Rental Prices Rise In Spain’s Prime Retail Spaces

31 March 2017 – Eje Prime

Rental prices in the retail market continued to rise in 2016. Rental prices on the prime high streets of the main urban areas in the country experienced a change in trend after an increase in their prices. High streets such as Portal de l’Àngel in Barcelona and Gran Vía in Madrid now have monthly rental costs of €270/m2 and €230/m2, respectively, according to the Market Study of Commercial premises, prepared by the valuation specialist Gesvalt.

Although the retail sector still represents a very attractive market, its volume decreased with respect to 2015, primarily due to the boom in the Socimis, which last year focused their attention on actively managing their portfolios, rather that making new investments like the year before.

In the Catalan capital, streets such as Paseo de Gracia, Rambla Cataluña and Avenida Diagonal saw prices stabilise at their 2015 levels. In Madrid, rental prices rose slightly with respect to 2015, with Calle Preciados once again the high street that recorded the most expensive prices in the capital, with rents of €255/m2/month. In Madrid, the significant increase in rents on Gran Vía saw prices rise from €205/m2/month to €230/m2/month last year.

In Valencia, rents in the prime areas rose by between 5% and 10%, and Calle Colón was the city’s most expensive street, with rents of up to €160/m2/month on its most exclusive stretches. In the city of Palma, prices remained stable with respect to the previous year on the city’s three prime streets.

“Meanwhile, it is worth noting the low and almost zero availability of large and flagship stores in all of the prime areas, due to the significant demand for that kind of property from the large brands”, said the study.

Sandra Daza, Director General at Gesvalt, said that, based on the results obtained, it is clear that “commercial premises are still the most profitable assets in Spain”. And she added that “buying a commercial property in a prime area in Spain and then leasing it out would currently generate a gross return of between 4.5% and 6%.

Original story: Eje Prime

Translation: Carmel Drake

Quonia Buys Mixed-Use Property In La Barceloneta For €7M

31 March 2017 – Eje Prime

The Socimi party in Spain is still raging. As the undisputed stars of the real estate sector over the last two years, these companies are still fattening up their asset portfolios and valuations through acquisitions. Such is the case of the Catalan firm Quonia, which after acquiring a property in one of the best area of La Barceloneta in the Catalan capital, has increased its valuation by 12% to €72 million, according to the annual accounts filed by the company.

The most recent asset acquired by Quonia, a vehicle managed externally by Rusiton XXI, a specialist real estate fund manager with extensive financial experience, is a property at number 60 on Passeig Joan de Borbó, in La Barceloneta, one of the most touristic areas in the Catalan capital, for €7 million.

The property comprises three commercial premises on the ground floor, which are currently occupied by the classic restaurant Can Manel, which has now closed its doors and which is going to be occupied by the Degus group, in an operation brokered by the real estate consultancy firm Laborde Marcet, according to sources in the sector.

The building also contains six homes on the first and second floors, and a terrace on the third floor. The gross leasable area amounts to approximately 1,658 m2, split into tertiary use (815 m2) and residential use (843 m2) which, according to sources close to the operation, will soon be subjected to a comprehensive renovation.

Following this acquisition, Quonia’s portfolio now comprises six assets, located in Barcelona, Asturias and Sevilla. The Socimi debuted on the Alternative Investment Market (MAB) in July 2016 (…).

In terms of Quonia’s management team, the role of CEO is held by Enric Pérez Más, an executive who is closely linked to the investment business in Spain. The director has held senior management positions in groups such as AMCI, Habitat and Investmex, amongst others. The Socimi’s Board of Directors also comprises Alicia Solares, Ana Marías Saucedo, José Luis Llamas, Mayra Hernández and José Luis Rodríguez.

Original story: Eje Prime

Translation: Carmel Drake

GreenOak Buys Vallsolana Garden Business Park For €25M

31 March 2017 – Cinco Días

The US fund GreenOak is continuing its commitment to the Spanish real estate sector with another acquisition. It has just closed the purchase of the Vallsolana Garden Business Park, located in Sant Cugat del Vallès (Barcelona) from the Swiss entity UBS for €25 million, according to market sources. The operation has been advised by Cushman & Wakefield.

The complex has a surface area of almost 20,000 m2, spread over two office buildings. Each one of the independent properties has four floors. The facilities house the headquarters of companies such as Adidas, Everis and Eurofragance.

GreenOak will add these offices to its ever-growing portfolio in Spain. Last year, the fund purchased four buildings in the Avalon business park, on the Julián Camarillo industrial estate in Madrid from Santander.

Nevertheless, to date, its only major acquisition in a single operation was made last year when it acquired the Las Mercedes business mega-complex, next to Barajas airport. That park has a surface area of 78,000 m2 and comprises nine buildings. In that case, it paid around €140 million to Standard Life, according to sources in the sector.

GreenOak is also preparing to launch its second real estate specific fund in Spain, with an expected investment capacity of around €900 million.

The building in Sant Cugat includes services such as padel courts, a gym, a games room, an auditorium and a lounge. In addition, the business park has around 400 parking spaces. The site’s currently occupancy rate stands at 80%, according to sources in the sector.

The business park is located in one of the most powerful business centres in Barcelona, in the city of San Cugat, which attracts numerous companies.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

UK Fund Shaftesbury Buys Plot Of Land In 22@ District

31 March 2017 – Eje Prime

The UK fund is satisfying its investment appetite in the Spanish market by making acquisitions. In this vein, it has just added a plot of land in the 22@ district of Barcelona to its portfolio of assets. The plot is located at number 66 on Calle Cristóbal de Moura, according to Frédéric Mangeant, the Director General of the fund in Spain. Following this purchase, the group plans to construct an office building on the site.

Although the company did not want to make a statement about the amount of the operation, sources close to the deal say that the fund must have paid around €10 million. According to the same sources, Shaftesbury has purchased the plot of land from “a bad bank”, and is now waiting to receive all of the necessary licences from the Town Hall of Barcelona before it starts construction of the property.

Shaftesbury is thereby committing itself to one of the areas that is expected to grow by the most in the Catalan capital. The 22@ district is attracting a large number of companies, both from within Spain as well as from overseas, wanting to open offices in Barcelona. In the same way, a large number of real estate companies are committing themselves to the construction of new office buildings to satisfy demand (…).

Shaftesbury’s purchase of this plot of land forms part of the group’s plans to grow in the Spanish market. Headquartered in Luxembourg, the fund’s leader in Spain is Frédéric Mangeant, an executive who previously served as a managing partner of the international real estate consultancy Knight Frank and who is a member of the Board of Directors of Real Valladolid Football Club.

Shaftesbury’s Spanish subsidiary began its expansion in Spain in 2014, with the purchase of a building at number 48 on Calle José Abascal in Madrid, which it acquired from Sareb for €26.5 million. The fund has converted that property into a luxury residential building. According to sources in the sector, the 17 homes cost around €8,500/m2, and are set to become a benchmark for the multiple high-end projects that are currently underway in the capital (…).

The Shaftesbury Asset Management group manages more than €1,700 million of real estate assets and created the fund Shaftesbury Real Estate Partners 1 in 2015 with the objective of investing approximately €300 million.

Original story: Eje Prime

Translation: Carmel Drake

Neinor’s Share Price Rises By 3.16% On First Day Of Trading

31 March 2017 – Eje Prime

Neinor Homes ended its first day of trading on the stock market on a high, as its share price increased by 3.16% following its debut on Wednesday. Its shares ended their first trading session at a price of €16.98 per share compared with the price of €16.46 set for their debut on the stock market.

The largest real estate development company to be listed in the last decade saw its shares appreciate by 9.96% at one point, given that during trading its share price fluctuated between a low and high of €16.98 and €18.10 per share, respectively.

The real estate company’s shares began trading at 12:00, following the traditional ringing of the bell by its CEO, Juan Velayos (pictured above) and the representative of Lone Star, Juan Pepa, at the Bilbao Stock Exchange, where the firm has its corporate headquarters.

The objective of the real estate company’s IPO is to reduce debt and continue acquiring plots of land in areas with strong demand. Neinor intends to list on the stock markets in Madrid, Bilbao and Valencia.

The group owns one of the largest portfolios of buildable land in Spain, comprising 161 developments and 9,086 homes. As at 31 December 2016, its buildable land portfolio was worth €1,120 million and had a development value of €2,548 million.

Original story: Eje Prime

Translation: Carmel Drake

Primark Buys New Flagship Store In Mallorca From Carrefour Property

31 March 2017 – Eje Prime

The Irish company has completed the purchase from Carrefour Property of a space where will open its flagship store in Palma de Mallorca, located in the Fan Mallorca Shopping Centre. The establishment has a commercial area of 5,700 m2, spread over two floors.

Primark’s flagship store in Palma de Mallorca will be the operator’s third large-format store in Spain. It will be exceeded in size only by the establishment that the firm has on Calle Gran Vía in Madrid and by the store it has in Granada.

Fan Mallorca Shopping, which opened its doors on 22 September 2016, involved investment of more than €190 million to secure more than 112 stores, housing international and domestic brands, such as H&M, Mango, C&A, Cortefiel, Sfera, Women’secret, Springfield; and operators such as Decathlon, Media Markt, Samsung, Artesiete Cines, Starbucks, VIPS, La Tagliatella, Udon, Pandora, Jean Louis David and Dock 39, amongst others.

The shopping centre, which generated 1,500 direct jobs and 2,000 indirect positions, has a constructed surface area of 170,000 m2 and a commercial area of more than 72,000 m2 (gross leasable area), plus 2,800 parking spaces.

Original story: Eje Prime

Translation: Carmel Drake

New Winds Group Buys Málaga Plaza Shopping Centre

31 March 2017 – Eje Prime

New Winds Group has purchased the Málaga Plaza Shopping Centre from Inversiones Igueldo. The asset, located in the financial and commercial heart of Málaga, has a gross leasable area of 6,600 m2, spread over three shopping floors and three underground floors containing 320 parking spaces.

The Málaga Plaza Shopping Centre was constructed in 1993 by the architect Ángel Asenjo and currently receives 3 million visitors per year. It is home to brands of the calibre of Burger King, FNAC, VivaGym and Primor, amongst others.

Over the next few months, New Winds Group will undertake an ambitious project to improve the shopping centre and will introduce new operators. Aguirre Newman has advised the divestment through an improvement in the occupancy rate and in the quality of the tenants and the subsequent sale at a profit.

New Winds Group is a Madrilenian real estate company linked to the Reyzábal family, known primarily for being the owner of the Windsor building. In recent years, it has acquired other shopping centres, such as Montecarmelo in the Spanish capital.

Original story: Eje Prime

Translation: Carmel Drake

Knight Frank: UHNWIs Invest In Spanish RE Again

30 March 2017 – El Mundo

The large fortunes are looking towards Spain once more as a destination for their real estate investments. Political stability, rising prices and high returns mean that it is now ranked as the sixth most attractive country for ultra-rich people or UHNWIs (ultra-high-net-worth individuals), in other words, those whose wealth exceeds $30 million (around €27.7 million), excluding their habitual residence.

It is the first time that Spain has reached the ranking’s top ten. The list has been compiled for the last ten years by the real estate consultancy Knight Frank as part of its “Wealth Report 2017”. The United Kingdom, the United States and Germany lead the classification, which is prepared on the basis of a survey of the individuals themselves.

According to the data, real estate investment in Spain amounted to €8,300 million in 2016, of which more than €1,200 million – almost 15% compared to 12% the previous year – came from private investors.

Legal certainty and the stability that economic growth has shown in recent quarters have been decisive in attracting new UHNWIs, according to Carlos Zamora, Director of the company’s Business Space.

The residential sector is still the market of choice, accounting for 36% of all private investment. (…).

The PIRI index

The price of luxury homes rose by 3% in the Spanish capital last year, in other words, by half as much as in Barcelona (where prices increased by 6.6%). An increase in the supply of new luxury properties contained the price rises in Madrid and, by contrast, generated upwards pressure in the Catalan capital.

Both cities form part of the PIRI index, which is presented in the report and which monitors house prices in the 100 largest luxury home markets in the world. Other locations in Spain include Ibiza, Marbella and Mallorca; the indexis led by Shanghai, Beijing and Guangzhou with y.o.y growth rates of more than 26%. Monaco is still the most expensive city per square metre in the world. By way of example, the consultancy firm points out that with $1 million, an investor can buy 17 m2 in Monaco, 20 m2 in Hong Kong, 55 m2 in Paris and 134 m2 in Madrid.

Another trend that has been detected is that investors have become more demanding, which has led to the sophistication of supply: luxury is still luxury, but now that also includes characteristics and services that set them apart from their peers.

Segments

Residential is the segment that sparks the most interest amongst investors, although, in recent years, the tertiary sector has gradually been gaining prominence too, including offices, retail, logistics assets and hotels.

In this context, flagship stores are also in demand, in emerging and established shopping areas alike, with a dual purpose: to be located in areas that facilitate their operation and to reinforce their brand images. The recent opening of the Mango megastore on Calle Serrano in Madrid and the inauguration on Paseo de Gràcia in Barcelona of the largest H&M store in Spain are both examples of this. (…).

Original story: El Mundo (by María Hernánez)

Translation: Carmel Drake

Radisson Wants To Grow In Madrid & Barcelona

30 March 2017 – Expansión

Radisson Blu – the hotel chain belonging to the Carlson Rezidor group, which is itself controlled by the Chinese giant HNA – arrived in Spain in 2009, with the opening of the Radisson Blue Hotel Madrid Prado. Three years later, it opened a resort in Gran Canaria, and just a few months ago it inaugurated its newest hotel in the country, the Radisson Blu Resort & Spa, also in Gran Canaria.

Radisson Blu owns almost 300 hotels in 69 countries. Now, the company wants to strengthen its commitment to Spain and to this end, it is analysing Madrid and Barcelona with particular interest, as key destinations for the opening of new establishments under the Blu and Red brands. “Spain represents an opportunity. We perform most of our expansion through management contracts or franchises, which means that we are not interested in leases, however the properties must always be in good locations”, explained Richard Moore, Vice President for Western Europe, the UK and Ireland at Radisson Blu.

HNA Tourism Group completed the purchase of Carlson Hotels last year and so took over control of 51.3% of the Carlson Rezidor Hotel Group, which operates in Europe, the Middle East and Asia, where it competes with NH, in which HNA also holds a stake. (…).

Moore added that the chain has studied options on the Mediterranean coast but that, for the firm to open a hotel, it “has to fit with our brand. We are proud of the way we make our brands fit with the properties and of our relationships with the property owners”.

Specifically, in the case of its most recent hotel in the Canary Islands, the chain has reached an agreement with the Norwegian family group Wenaasgruppen, which owns 24 hotels. It is the second time that the company has worked with the Norwegian group, which also owns the other hotel that Radisson manages in Gran Canaria. (…).

Moore added “There are lots of reasons why we want to have a presence in Spain and, above all, in Gran Canaria”. He said that, in the last twelve months, the number of tourist arrivals in Gran Canaria has grown by 14% and the average revenue per room (RevPar) has risen by 18% – or 15% in the case of luxury hotels -. “25 airlines fly to 142 destinations from Gran Canaria in 25 countries. It is the second most popular destination after Tenerife”, he said.

Brexit

In terms of risks to the business, Moore does not think that Brexit will have a significant impact on tourism in the islands and less so on the hotels that the group manages, which are upscale establishments (five stars) with a very diversified client base. (…).

Original story: Expansión (by Rebecca Arroyo)

Translation: Carmel Drake