Adveo Sells An Industrial Warehouse In Cornellà For €4M

17 March 2016 – Diario Vasco

Through its subsidiary Monte Urgull, Adveo has completed the sale of an industrial warehouse in Cornellà de Llobregat (Barcelona) to Rentauro for €4 million. The consideration has already been received in full by the office supply company.

The operation, which forms part of Adveo’s new strategic plan, has generated a loss of more than €1 million for the group, according to a statement made by the company to Spain’s National Securities Market Commission (CNMV).

No debt was associated with the asset and so the net amount from the operation will be recorded directly as cash and will contribute to reducing the company’s net debt, which, amounted to €305 million as at 31 December 2015.

The property, acquired by Monte Urgull in 2002, has been leased since its purchase to the entity Saint Gobain Idaplac, but that lease contract is due to end in May this year.

Original story: Diario Vasco

Translation: Carmel Drake

Evo Buys GE’s Spanish Mortgage Business For c. €300M

14 April 2016 – Expansión

As a result of this operation, involving Evo’s acquisition of almost €400 million in mortgages from GE Capital, Apollo’s subsidiary expects to increase its balance sheet by 10% and its loans to customers by 25%.

(…). The Spanish subsidiary of the US fund Apollo is acquiring General Electric’s mortgage business in Spain: almost €400 million in loans to individual borrowers, according to financial sources consulted by Expansión. According to the same sources, Evo will pay almost €300 million for the portfolio.

This operation brings the bank led by Enrique Tellado closer to its objective of achieving critical mass to emerge from the red in 2016.

Since Apollo acquired Evo, the former subsidiary of NCG Banco, the entity has registered three consecutive years of losses: €3.6 million in 2013, €78 million in 2014; and €13 million last year, according to the latest figures published, as at September, according to the Spanish Banking Association (AEB).

GE Capital Bank, the financial arm of GE, launched this divestment last year, as part of Project Zágato, advised by PwC. The portfolio, worth €400 million, contains 5,000 mortgage contracts and mainly contains loans that the US entity granted through APIs (real estate agents).

With this sale, GE Capital Bank is virtually shutting down its business in Spain, following the transfer of its leasing portfolio to Incus Capital, at the end of last year; and the repayment of the majority of its consumer loans.

This departure is the response to a change of strategy for the multinational company at the global level. At the beginning of 2015, GE decided to divest the majority of its financial business to focus on its industrial turbine, aircraft engine and medical equipment businesses, amongst others. It did so because of the risk posed by this financial exposure following the outbreak of the subprime mortgage crisis in 2008. At the time, the group had financial assets worth $500,000 million (€438,400 million).

Since then, GE Capital has been selling off parts of this business through different agreements in different countries, such as those signed with Evo and Incus in Spain.

This subsidiary reached its peak in Spain with partnerships that it signed with CAM and BBK before the crisis.

In 2008, it recorded losses and has remained loss-making ever since.

Quantitative leap

Project Zágato allows Evo Banco to make a significant quantitative leap. The portfolio acquired represents around 10% of its current balance sheet, which according to data from AEB as at November amounted to €4,000 million. The growth in terms of loans to customers is greater, almost 25%, given that it held €1,771 million last November.

Apollo’s standard strategy since it arrived in Spain has been to make purchases of entities, such as Evo Banco, which it acquired in 2013. Evo’s loan portfolio comprises purchases such as Finanmadrid, from Bankia; Bank of America’s credit card business; and portfolios of consumer credit and mortgages from Citi.

In the last few months, Evo Banco and Apollo have looked into other acquisitions in Spain, such as the BarclayCard sale, where it was pipped to the post by Bancopopular-e, the subsidiary of Värde Partners and Banco Popular, which is now in exclusive negotiations.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

BBVA Puts Logistics Warehouse Portfolio Up For Sale

13 April 2016 – Expansión

BBVA has put 441 properties on the market, primarily warehouses and logistics plots, which have a combined surface area of more than 500,000 m2.

BBVA has launched one of the largest operations involving the sale of industrial assets in the Spanish market. The entity has appointed BNP Paribas Real Estate to coordinate the divestment process of a portfolio covering a surface area of more than 500,000 m2 and containing primarily warehouses and logistics plots. The entity wants to tap into the investor appetite that exists in the market for this kind of asset, in the context of rising rents and the forecast recovery in demand.

According to sources, BBVA wants to close the sale of this portfolio, known as Detroit, by July. BNP Paribas Real Estate will be responsible for coordinating the whole process and for selling the assets. For the sale, all possible options will be accepted, ranging from the sale of the entire portfolio to a single investor, to the sale of different sub-portfolios to several interested parties. In addition, the sale of individual assets will also be considered. As such, potential interested parties include large international real estate funds, listed Socimis and several Spanish family offices.

Cataluña and Andalucía

The Detroit portfolio comprises 441 properties that currently sit on BBVA’s balance sheet, having been repossessed from borrowers in the past. 65% of the assets are located in Cataluña, the region in which the entity chaired by Francisco González took over six of the former savings banks. Another 20% of the assets are located in several provinces in Andalucía.

Other assets are also located in Galicia, Extremadura, Murcia, Baleares, Castilla y León, Valencia, Cantabria, Canarias and Castilla-La Mancha.

Of the 441 properties now up for sale, 327 are industrial warehouses, 28 are industrial or logistics plots and 86 are parking spaces. 376,000 m2 of the total surface area (550,000 m2) correspond to industrial warehouses.

Investor interest

“This is a great investment opportunity, given that industrial warehouses are becoming a sought-after asset in the market once again, due to the expected recovery in demand and the gradual absorption of the existing stock”, say sources at BNP. According to the real estate consultancy, rents for this type of asset are currently on the rise and yields are higher than those earned on other real estate assets, such as offices, shops and homes.

In 2015, tenants leased almost 1,000,000 m2 of logistics warehouses, up by 37% compared with a year earlier. The increase was particularly marked in Cataluña, where a historical record was broken for warehouse rentals, with 564,000 m2 of surface area leased, an increase of almost 80%, according to figures from JLL. The largest operations were closed in the fashion and automobile sectors, although the e-commerce sector also played an important role leasing facilities for the distribution of products purchased online.

In parallel, investment in the industrial and logistics sector amounted to €734 million in 2015, up by 25%. The main players were Socimis and overseas funds. The widespread interest caused yields to be compressed from 8% to 6.5%.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake

CBRE: Inv’t In Industrial & Logistics Assets Totals €386M In H1 2015

15 July 2015 –

Investment in industrial and logistics assets in Spain amounted to €386 million during the 6 months to June 2015. This figure is considerably higher than the one recorded during the same period in 2014, when only €113 million was invested, according to data from CBRE, the leading global consultancy and real estate service company.

Several factors have contributed to this increase, including the greater ease of access to financing and the expectation that rents will rise.

International investors are continuing to see Spain as an attractive market, based on their analysis of location and type of asset. Investment funds and Socimis have been the main purchasers.

Madrid and Guadalajara accounted for the majority of the activity, although one-off transactions were also recorded in other Spanish cities. These include Merlin Properties’ purchase of Testa’s portfolio, spread across several regions, with a total surface area of 209,000 m2. They also include Rockspring’s purchase of two logistical warehouses, still under construction, in Montepino and Torrejón de Ardoz, with a surface area of 49,000 m2, which will be completed during the first quarter of 2016.

Two transactions were also recorded in Barcelona, including Baraka Global Invest’s purchase from Inbusa of Alstom’s facilities in Santa Perpetua de Mogoda, with a surface area of 370,000 m2 and a price of €60 million.

Both the increase in liquidity and purchasing activity, as well as the scarcity of supply in the market, has led to the compression of prime rental yields since 2012, to their current levels of between 6.5% and 7%.

Original story:

Translation: Carmel Drake

DIA & Blackstone Close Largest Industrial RE Transaction Since 2013

11 March 2015 – ABC

The two companies have signed a contract for the rental of logistics buildings covering 30,000 square metres.

Logicor, the logistics platform owned by Blackstone, has signed a long-term rental agreement with the supermarket chain DIA for 30,000 square metres of space, which makes it the largest lease transaction in the industrial sector since 2013.

The rental contract covers a substantial part of a 37,000 m2 warehouse in the Miralcampo Logistics Park (in Corredor de Henares), a building that was acquired by Logicor at the beginning of 2014, according to JLL, the real estate consultant that has advised this transaction.

Logicor is the largest owner of logistics warehouses in the Iberian Peninsula, with a portfolio of 960,077m2. According to Logicor’s director general for Southern Europe, the positive changes in the real estate investment market in Spain are starting to be reflected in occupancy rates in the logistics sector.

That, combined with the limited availability of large, modern logistics warehouses in Madrid, has meant that tenants are under more pressure to hire the highest quality products, he added.

The CEO and Chairman of Logical, Mo Barzegar, highlighted that this transaction reflects the company’s investment strategy to purchase functional warehouses, close to urban areas, that are attractive to clients. JLL España advised Logicor in this transaction.

Original story: ABC

Translation: Carmel Drake

Merlin Properties Buys an Industrial Warehouse in Almussafes (Valencia) For €12.2 Mn

1/10/2014 – Expansion

Merlin Properties, a freshly listed real estate investment trust known as a Socimi in Spain, has bought a unit in the Sollana industrial area in the municipality of Almussafes (Valencia) for €12.2 million from CBRE.

The building of a 26.613 square meter GLA (gross lettable area) was constructed in 2008. Presently, the property houses companies like Ford, Johnson Controls or Truck & Wheel.

Adding this transaction up to the total of Merlin’s investments, year-to-date the Socimi spent nearly €1.07 billon out of its €1.29 billion funds raised on its flotation day.


Original article: Expansión (after EFE)

Translation: AURA REE

Jones Lang LaSalle: First Signs of Reversal on Industrial & Logistics Market in Spain

3/03/2014 – Jones Lang LaSalle

The Report on Industry and Logistics (El Informe de Industrial y Logística) by Jones Lang LaSalle analyzes movements within the sector underlining the lack of significant purchase transactions due to the fact that the cut-off in financing undermined the sector. Nonetheless, according to the report, the year 2014 casts positive outlook inasmuch as on the one side the country risk faded away, we think that the yield hit the bottom, therefrom recovery shall be imminent and finally, the returning international investors who start to demand new industrial plants that implies creation of new spaces.

Madrid´s industrial area and land

The demand from the part of small and medium-size businesses is scarce due to serious insolvency and financing problems. However, the ones that are powerful enough to buy the industrial plants come across considerable opportunities.

When it comes to supply, the price of finished product shows the impact of continuous decrease, let alone the interesting assets proceeding from arrangements with creditors.

Land purchase presents poor numbers, basically due to lack of demand. At present, we find a wide offer of outstanding land at an attractive price in all rings.

On the other hand, some developer companies are willing to buy and develop land for tender finalists, however the terms and conditions offered by the lattest in agreements make accomplishment of the projects impossible.

Logistics in Madrid

The demand in Madrid has not got back on its feet as companies still cannot afford vacant spaces. In the primary areas availability is scarce (7.5%) and that pushes investors to surrounding areas. The demand aims at the second and the third ring, where availability rate demonstrates 9% and 42% respectively.

Jones Lang LaSalle´s report also analyzes supply and assures that the availability rate remains stable in the second quarter of the year, however shrinking number of large industrial buildings is noteworthy. In the second and third ring there are lots of obsolete property in need of low-cost trading.

In the primary zones, we observe an improvement in rental fees (4,80€/m2), whereas in the second and the third ring the prices reach 3,10€/m2 and 2,15€/m2 respectively. (…)

Talking about transactions, high-quality and well-situated demand turns towards 2.000-3.000 m2 in all facilities areas. The logistic space absorbtion in Madrid during 2013 showed 355.190 m2. (…)

Industrial product and land in Barcelona

Demand analysis in 2013 presents prectically no significant operations within this area, although the demand in Barcelona´s surroundings is high and supply low. (…). Still, financing is scarce, so most of the transactions are paid from own resources. The land prices ranged between  150€/m² and 400€/m².

Demand for industrial buildings is also poor, not in primary zones, though, where prices vary from 3,50€/m²/month and 5,25€/m²/month.

Logistics Barcelona

In the last quarter of the year, the absorbtion of logistic space was equal to 106.200 m² that added to the 205.000 m² from the previous quarters give 311.200 m² throughtout 2013.

The supply of industrial buildings in Barcelona is currently set at 672.300 m², about 6% less than a quarter before and the availability rate is 10.7%. Within primary zones, the rate shows 10%, whereas in the second and the thrid ring represent 7.2% and 15% respectively.

Maximum rental rates in the last months of 2013 showed 6,25 €/m²/month in the primary zones and 5 €/m²/month and 3 €/m²/month in the 2nd and 3rd ring, respectively.

The greatest transactions of the year are the following: Docout´s renting an industrial building of 22.848 m² from Prolongis and the rent of old buildings of Ochoa in L’Hospitalet del Llobregat, Cornellà del Llobregat, El Prat del Llobregat and La Bisbal del Penedès, at a tender sale.

 Investment market: Industrial and Logistic

The year 2013 was a turning point for the sector. The most active, opportunistic investors are continously looking for great volume and bargains.

Primary yields in Madrid showed 8.25% (expected to fall sharply during 2014 due to strong investment and long-term contract signing), while in Barcelona they settled at 8%.

The report by Jones Lang LaSalle highlights that the year 2013 ended up with €100 million investment and throughout 2014 the number might even triple. (…). Since the beginning of 2014, we observe improvement in activity within the sector and we expect better contract signing rates this year.

Original article: Jones Lang LaSalle

Translation: AURA REE

The crisis leaves 17,4% of the industrial units in Madrid and Barcelona empty.

The crisis has caused a significant hole in the industrial units market. Madrid and Barcelona had a total of 1,56 million square meters of empty units available for rent at the end of last year, 17,4% of the total amount of units available in the two cities, according to a report by Aguirre Newman. Madrid had 990.866 square meters of empty industrial units, 16% of the total, at the end of 2012. Meanwhile, in Barcelona there were 572.887 square meters of empty logistic areas, 18% of the total of 3,10 million square meters of this type of properties in the city.

In spite of these figures, the hiring of this type of assets grew by 7% in Madrid and 5% in Barcelona in 2012, with a total of 630.000 rented square meters in both cities. Aguirre Newman considers that the volume of available space “continues to be very high” which has generated a “severe adjustment” in the average rental and selling prices in both markets.

As for rentals, prices adjusted by 14,2% in Madrid and 8,6% in Barcelona. As for the investment in this type of assets, the transaction volume reached 45 million Euros in 2012, which means a drop of 77% in relation to the previous year. The report of the consulting agency establishes that in 2012, “there have been no new developments of logistic projects” in view of “the current uncertainty in the market, the questions on demand and the current available offer”. The only projects which were carried out were “turn key”.

Source: ABC