Overview – August

 

CBRE published a report in August confirming Spain’s position as the fifth most popular destination for real estate investment in Europe after more than €6.1 billion was invested in the country during the first six months of 2018, equivalent to 5% of the European total. Moreover, the consultancy firm’s country outlook for the rest of the year is positive, with total investment volumes in Spain predicted to match those seen in previous years (€12.9 billion in 2017).

 

Also during August, despite the holidays, several deals were closed in the retail, hotel, office and land segments, amongst others.

 

Retail

In the retail sector, the Slovak developer J&T won the bid to acquire three shopping centres (Gran Casa in Zaragoza, Max Center in Bilbao and Valle Real in Santander), in a deal estimated to be worth €500 million that will see it team up with Portuguese group Sonae Sierra. In addition, Lar España sold two out-of-town stores in Pamplona to AEW for €11.5 million and El Corte Inglés put two non-strategic department stores up for sale for €100 million as part of its on-going debt reduction plan.

 

Hotels

In the hotel sector, Alantra’s real estate investment platform Alantra Reim acquired one of Andalucía’s largest resorts, the Islantilla Golf Resort on the Costa de la Luz, for an undisclosed sum. Meanwhile, in Madrid, Grupo Villar Mir exited the Canalejas Project by selling the 32.5% stake that it still held in the development to its subsidiary OHL for €50 million; as such, Canalejas is now equally owned by OHL, which already held 17% of the firm, and Mohari Limited, a company controlled by the Israeli executive Mark Scheinberg. Also, Asturian property developer Victor Madera purchased the Can Oleza historic manor in Mallorca for €10 million; it is unclear what the millionaire intends to do with the property although he is likely to want to convert it into a high-end boutique hotel if regulations permit.

 

In the holiday-let market, the competition authorities started to crack down on the attempt by some of Spain’s large Town Halls to regulate the boom in tourist apartments, created by Airbnb and its competitors, which many blame for contributing to an increase in residential rental prices and the expulsion of residents from the centre of Spain’s cities. The National Markets and Competition Commission (CNMC) announced in August that it is going to challenge the urban planning rules approved recently in Madrid, Bilbao and San Sebastián on the basis that they violate competition and harm consumers and users. Other rules, not yet in force, in Barcelona and Valencia, could also be targeted by the CNMC.

 

Offices

In the office segment, Barings acquired five properties with a combined surface area of more than 25,495 sqm in the Avalon Business Park in Madrid from Meridia Capital in the firm’s seventh deal in Spain, albeit its first in the office market in the Spanish capital. Also in Madrid, GreenOak purchased a 9,800 sqm office complex from Axa for an undisclosed sum. Meanwhile, in Barcelona, Colonial bought a prime office block spanning 5,800 sqm on Avenida Diagonal, which it plans to renovate for a total cost of €37.

 

Land

In the land sector, in Granada, property developer Grupo Inmoglaciar acquired a plot with a buildable surface area of 62,493 sqm for €87.4 million where it plans to build 608 two-, three- and four-bedroom apartments. In Madrid, two wealthy Chilean investors acquired a 40,000 sqm plot in Pozuelo de Alarcón for €30 million from La Caixa, where they plan to construct 396 homes. In Sevilla, Habitat acquired a 12,000 sqm plot in the town of Camas to build a 186-home development for €30 million; and in Valencia, the same firm acquired a plot of land with a buildable surface area of almost 8,000 sqm for €13 million where it plans to construct 68 homes. Finally, in Barcelona, Henderson Park and Hines teamed up to acquire land on which they plan to build a 750-bed student housing project in the Catalan capital’s trendy 22@ district.

 

NPLs

Also in August, the Spanish firm Alantra Partners completed its purchase of KPMG’s London-based advisory division specialising in the sale of loans and non-strategic assets, whereby almost doubling the size of its current team from 40 to 75.  Meanwhile, Apollo submitted an aggressive bid for Santander’s last real estate portfolio, estimated to be worth between €5 billion and €6 billion. And Banco Sabadell announced that it is now open to offers for its servicer Solvia after excluding it from the bulk asset sale agreed with Cerberus in July.

 

The scene is set for an exciting last four months of 2018, with annual house sales expected to exceed the 500,000 threshold and GDP growth predicted to reach 2.7%.

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