Category: Offices

Citibox Seduces the RE Market & Signs Agreements with Merlin, Colonial & Aedas Homes

22 November 2017 – Eje Prime

With just 48 hours to go until Black Friday, Citibox is busy working on a multiple-pronged strategy. The real estate proptech firm is getting ready for the big e-commerce day of the year, when Spanish consumers are expected to spend more than €1.4 billion online. On 24 November alone, many online businesses generate between 10% and 30% of their annual sales.

This fact directly affects Citibox, a Spanish company that in just two years has signed agreements with the kings of the Socimis, Merlin and Colonial, as well as with property developers such as Vía Célere. And all thanks to its intelligent lockers (or boxes, as they call them), storage spaces “that enable us to ensure that anyone can receive the package they are waiting for without having to be there in person”, says Félix Navarro, Director of Citibox, speaking to EjePrime. The firm has already installed 2,500 boxes in Madrid and Barcelona, the two cities where they currently have a presence.

Created in Valencia in May 2015, the proptech firm has a system whereby each one of its boxes is permanently connected to its own app. As a result, the parcel service is able to deliver a package to the user in the box that he/she chooses in advance and “once there, a password allows the delivery person to place the package in the corresponding space”. Once the package has been delivered, the recipient receives a message on his/her mobile device informing him/her that the package is ready to be picked up”, explains Navarro. “This satisfies the user and also the delivery companies, given that it saves them money and time by ensuring in advance that the delivery of its parcels will be successful”, says the Citibox executive.

According to research, 84% of people want to receive their parcels at home, and with the e-commerce boom, “online buyers have become more demanding”, says Navarro. A report from Cushman & Wakefield indicates that the rate of growth of the Spanish digital market is 19%, faster than any other country in Europe. Citibox wants to build on this – it already has a presence in the residential sector and in offices, through a series of models.

In the case of the housing market, the proptech firm offers communities of neighbours the opportunity to install its boxes. The only condition is that the block has at least 50 residents. Nevertheless, where the company really comes into its own is in the new urbanisations that currently being built, given that it has been reaching agreements with the most important Spanish property developers. In the Community of Madrid, it is already working with Vía Célere, in Villaverde, and with Grupo Roca in Getafe, in two residential complexes that are about to be handed over to their new owners. Moreover, the company has framework agreements in place with other companies in the sector such as Aedas Homes, Corp and Acciona. (…).

In this sense, one of the points that the company highlights is that “the investment is made by the user upfront: no payment is required for the services, regardless of the number or frequency of deliveries”, says the company’s Marketing Director.

Merlin and Colonial 

In the office sector, Citibox operates for the two largest players in the real estate sector. Merlin has boxes in its Muntadas I and I buildings, whilst Colonial has an agreement with the company for its Sant Cugat Nord asset. Moreover, the proptech is present in the headquarters of Mutua Madrileña, Catalana Occidente, P&G, Saint Gobain and Just Eat, amongst others (…).

Citibox was created with five employees, including its CEO, David Bernabéu, and in just two years, its workforce has grown to include 50 people, and “we are still growing”, says Navarro.

Boosted by this growth, the company is now thinking about its expansion overseas. In 2018, Navarro is confident that “we can be present in the main European markets, such as in France, Germany and the UK”. (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Metrovacesa Sells an Office Building Still Under Construction to Axiare

22 November 2017 – Expansión

The real estate company controlled by Santander and BBVA has sold a building, located in Madrid and still under construction, to the Socimi for €30 million.

The Socimi Axiare is continuing to expand its portfolio, whilst its counterpart Colonial is pushing ahead with its plans to buy the company. The group led by Luis López de Herrera Oria has closed the purchase of an office building, located on Calle Josefa Valcárcel in Madrid.

Axiare has paid its former owner, Metrovacesa, €29.7 million for the property, which is still under construction, as reported by the Socimi to Spain’s National Securities and Exchange Commission (CNMV).

The project under construction includes a gross leasable area for offices of 8,652 m2, spread over seven floors, as well as two underground floors, which will contain 261 parking spaces. The construction work on this building is expected to be completed during the last quarter of 2018.

The property forms part of a small real estate portfolio that Metrovacesa held onto after transferring its non-residential buildings to the Socimi Merlin Properties in an operation closed in October 2016. Specifically, this project emerged from the final investment plans of Román Sanahuja, owner and President of Metrovacesa prior to 2008, when the real estate company ended up in the hands of its creditor banks.

Following this purchase, Axiare has a portfolio of assets worth €1.74 billion, dedicated primarily to office buildings. So far this year, the Socimi has purchased seven properties, located in Madrid and Barcelona, for a total investment of €245 million. Similarly, it has assets “in an advanced stage of analysis” worth another €170 million.

On Monday 13 November, Colonial launched a takeover bid  for 100% of Axiare, in an operation worth around €1.4 billion. Before launching the public offer, Colonial, which has been Axiare’s largest shareholder since October 2016 with a 15% stake, increased its shareholding to 28%.

Colonial’s offer boosted Axiare’s share price, which now stands at around €1.453 billion, equivalent to €18.38 per share, compared with the takeover offer price of €18.50.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

C&W: Office Rentals Down By 56% In Barcelona In Q3

21 November 2017 – Expansión

The uncertainty caused by the process directly affected the activity of Catalan companies even before the illegal referendum was held on 1 October. That finding is evidenced by the data relating to the leasing of office space, which fell by 56% in Barcelona during the third quarter, according to the Marketbeat study prepared by the real estate consultancy firm Cushman & Wakefield.

This decrease contrasts with the growth that had been achieved during the first two quarters of the year, when the leasing of office space increased by 39% with respect to the same period last year. Operations included in this study relate to both the leasing and acquisition of new space, provided that, in the case of the latter, the company uses the space directly and does not re-lease it to obtain returns.

The decrease recorded during the third quarter was spread unevenly across the different neighbourhoods. One of the most pronounced decreases was seen in the Digaonal area and along Paseo de Gracia, where the volume of space leased fell from 10,000 m2 to 4,000 m2, in other words, by 60%. According to Ramiro Rodríguez, Director of Market Research at Cushman & Wakefield, “companies from the legal, consultancy and financial sectors” are typically based in this area.

In the Plaza Europa area, the percentage decrease was even greater – 80% – but it should be noted that the magnitudes there are smaller – the volume of space leased there fell from 5,000 m2 to 1,000 m2. The companies that dominate that area are from the “technological and telecommunications sector”, said Rodríguez.

It should be noted that these figures correspond to the months of July, August and September. By then, the first alarms had been set off following the call for the illegal referendum on 1 October, but by the point, the political crisis that culminated in the application of Article 155 by the Spanish Government had not yet been unleashed.

Asked about the effect of those events, Rodríguez stated that they extended the “feeling of uncertainty”, which led to a certain stoppage in the leasing of office space. Nevertheless, following the illegal vote, there was a “return to normality”, which has allowed operations to be reactivated.

For this reason, the head of the study forecasts that, by the end of the year, the volume of office space leased will amount to around 360,000 m2, representing a rise of approximately 12.5% with respect to the 320,000 m2 that was registered in 2016. Currently, the cumulative YoY increase between January and September 2017 amounts to a similar percentage (12%), and, in theory, a similar rate of growth is expected to be maintained during the fourth quarter.

In addition to the uncertainty caused by the ‘independentista’ process, the main obstacle that companies looking for new offices will find is the shortage of available space, especially when it comes to larger offices. According to data compiled by Marketbeat, the supply in Barcelona had an availability ratio of 8% at the end of September, which represents a decrease of 3.5% with respect to the previous quarter.

Original story: Expansión (by I. Bolea)

Translation: Carmel Drake

Axiare: BofA & 4 Large Hedge Funds Acquire Stakes in Midst of Colonial Takeover Bid

21 November 2017 – Bolsa Mania

Bank of America, one of the giants of the US financial sector, has acquired a stake in Axiare, at the same time as Colonial has launched a takeover bid for the Socimi with the aim of creating an office rental giant. The US entity has declared to the CNMV that it holds a 6.7% stake in Axiare, whilst another group of funds has purchased just over 8% of the entity, at a time when the largest real estate operation in Spain this year is on the verge of being completed.

On Monday, the investment fund Wellington Management announced an increase in its stake from 3% to 3.8%. That means that 15% of Axiare’s share capital is now in the hands of funds. MVN Asset Management (Maven Securities), Gruss Global and Amber Global appeared last week with stakes of 3.5%, 1.1% and 1.21%, respectively. Those qualifying investors join Citi, which already held a 4.9% stake in the Socimi and which emerged as the only high-profile shareholder behind Colonial, after the other shareholders sold their stakes in this real estate company.

Specifically, the British firm MVN Asset Management (Maven Securities) declared a stake of 3.09% in Axiare on 13 November, and on Tuesday (21 November), increased that percentage to 3.5%. Gruss Global controls another 1.1%. Meanwhile, Amber Global, an entity headquartered in the Cayman Islands, has reported that it holds a stake of 1.21%, in that case, all through derivatives, according to the CNMV’s registers. Maven and Amber Global acquired their stakes in Axiare on the same day that Colonial launched its takeover bid for the Socimi Axiare. Colonial is already the largest shareholder with a 28.7% stake.

With its offer, the real estate company led by Pere Viñolas is looking to acquire the remaining 71% of Axiare that it does not yet control. On the same day as it submitted its offer, Colonial increased its stake in the Socimi from 15% to 28%. To that end, it offered €18.50 per share in the Socimi chaired by Luis López de Herrera-Oria. That price represents a premium of 13% over the share price of Axiare on the eve of the takeover and 20.8% over the average list price for the last three months. On Tuesday, the Socimi’s shares were trading at around €18.30.

Axiare claims that the takeover is “hostile”

Axiare says that the takeover that Colonial launched over the company on Monday is hostile in nature, given that it did not know anything about the intentions of the real estate company. The firm, whose largest shareholder is Colonial, announced that it will consult its legal and financial advisors regarding the details of the operation.

“Until the morning of 13 November, neither the management team nor the Board of Directors of Axiare was aware of the intentions of Colonial to purchase an additional block of shares, nor of its intention to formulate a takeover bid”, say sources at the firm chaired by Luis López de Herrera-Oria.

This is not the first time that discrepancies have arisen between the two companies. In fact, it is the second time that Axiare has expressed its resistance to Colonial’s acquisition of its shares. The first time was when the company purchased 15% of the Socimi. Proof, they argue, is that Colonial is not represented on the most senior governing body of Axiare, because it is considered to be a “competitor”.

Original story: Bolsa Mania (by Alberto Sanz)

Translation: Carmel Drake

Colonial Launches €800M Bond Issue To Finance Axiare Takeover

21 November 2017 – Eje Prime

Colonial is pushing ahead with its plans for Axiare. The Socimi has launched a bond issue amounting to €800 million, funds it plans to use to partially finance the takeover that it has formulated for Axiare, with the aim of creating an office rental giant, as explained by the group in a statement.

The operation has been structured in two tranches, one amounting to €500 million over eight years and the second amounting to €300 million over twelve years. The real estate company led by Pere Viñolas (pictured above)  opened the placement books first thing on Tuesday and expected to close them by the end of the day.

Colonial is returning to the capital markets with an issue that forms part of the financial structure designed to finance the takeover of Axiare, launched on Monday 13 November, with the aim of acquiring the remaining 71% stake that it does not yet control in that Socimi.

The operation, worth €1,462 million, is currently being backed by a bridge loan facilitated by JP Morgan. The real estate company plans to replace that loan with this bond issue and, subsequently, reduce those securities with a program to sell non-strategic assets amounting to €300 million and other resources, including a capital increase, amounting to €450 million.

Original story: Eje Prime

Translation: Carmel Drake

Onix Capital Buys Former ‘Páginas Amarillas’ HQ In Madrid

21 November 2017 – Expansión

The firm Onix Capital, in which several wealthy South American families own a stake, has reached an agreement with the former owners of the company to purchase the building, located on Avenida de Manoteras in Madrid.

Another office building in Madrid has changed hands. In this case, the star is a property located on Avenida de Manoteras, in the north of the capital, which, until just a few days ago, was home to the corporate headquarters of Páginas Amarillas (the Yellow Pages) in Spain.

The building used to be owned by the fund Hibu Connect, which sold the company that created the famous yellow coloured telephone directory in May (it now specialises in advising SMEs) to the firms Metric Capital Partners and Evolvere Capital. Following that corporate operation, the owners held onto the property, but they have sold it to a new owner six months on.

The architect of the purchase has been the firm Onix Capital Partners. “We are a group specialising in the real estate sector, with 30 years of experience in Argentina”, explained Martín Kielmanowicz, Vice-President of Onix Capital Partners. Our investors are Latin American families, above all from Argentina, and institutional groups (…).

In fact, the Páginas Amarillas building is the third purchase that this group of investors has made in Spain. Its first operation involved the acquisition of Edificio Montepríncipe, located next to Santander’s Ciudad Financiera, in Boadilla del Monte (Madrid). For that property, which is leased to the financial institution to house its IT services, Onix paid almost €80 million. Last year, the investor group also reached an agreement with Allegra Holding, the investment arm of the Losantos family, to purchase HP’s headquarters in Las Rozas.

“At the beginning, we focused on core properties, with long-term lease contracts and good tenants but, with such intense competition for those kinds of assets, we have now branched out to look at new options”, explained Kielmanowicz.

In this way, the Páginas Amarillas building appeared on the firm’s radar. It is one of the most well-recognised properties in the area thanks to its original design. Its surface area spans 12,000 m2 and it has 200 parking spaces. “The property is currently spread over five floors, but following the renovation, we hope to increase the height and extend the space to 13,000 m2”, said the Vice-President of Onix.

Following the completion of the purchase last week, the employees of Páginas Amarillas have now left the property, which will be renovated in its entirety to attract a new tenant. To this end, the Argentinian manager has engaged the architecture studio B720 Fermín Vázquez Arquitectos, which will take care of the complete refit of the building (…).

The renovation of the property will begin before the end of the year, with the aim of putting it on the market at the beginning of 2019. Onix will invest €35 million in total on the purchase and the renovation (…). “Behind the investment are five Latin American families and the Onix management team also holds a percentage stake”, he added.

The firms JLL, Knight Frank, Baker Mckenzie and Uría Menéndez have all participated as advisors to the operation.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Sabadell Offers €33M for Duro Felguera’s HQ in Madrid

20 November 2017 – Eje Prime

Sabadell may complete the purchase of a new asset very soon. The financial institution is close to signing the acquisition of the headquarters of the company Duro Felguera for €33 million. The Asturian company, which is fighting hard to avoid having to file for creditor bankruptcy, would raise liquidity for its internal battle as a result of the agreement.

Interestingly, Duro Felguera must have rejected an offer amounting to €38 million from Sandra Ortega, the daughter of the founder and President of Inditex, Amancio Ortega. According to Voz Populi, although she was offering a higher financial proposal, she was also imposing the condition that the company remain as the tenant of the property for ten years, in return for a price of €2 million per year and a seven-year deposit.

By contrast, Sabadell is offering €33 million without any requirement for the company to remain in the building or to pay any deposits, which means that Duro Felguera would see a cash inflow of between €10 million and €15 million after paying off its loan.

Original story: Eje Prime

Translation: Carmel Drake

Villar Mir Redesigns Fifth Tower & Delays Award of Construction Contract

20 November 2017 – Eje Prime

Grupo Villar Mir has listened to its partners and the Town Hall, and is going to redesign Torre Caleido, the fifth tower in Madrid. The skyscraper, which is going to be built next to the Cuatro Torres, will be adapted to the requests of Megaworld Corporation, its Philippine partner, and the local government led by Manuela Carmena. Amongst other features, the project is now going to include a supermarket and a cinema, as well as more lifts than initially planned, as requested by the Town Hall.

This redesign of the building will result in a delay in the award of the construction contract, which is now expected to take place during the final month of the year. Nevertheless, OHL, the construction company that forms part of Grupo Villar Mir, is currently positioned as the favourite to build the skyscraper, since to date, it has carried out the demolition and the work to prepare the land, which spans a surface area of 33,326 m2, according to El Economista.

An investment of approximately €160 million is estimated for the main construction work to build the skyscraper, out of a total projected budget of €300 million. Moreover, Torre Caleido already knows who its most important tenants are going to be, namely: IE and Quirón. The business school has acquired 50,000 m2 of the skyscraper in its move to become the first high-rise campus in Spain, whilst the healthcare group will turn its section of the building into a state-of-the-art medical centre.

On the outside, Villar Mir has redesigned the plans to include a shopping area, which will contain a supermarket and two cinema screens, an express wish of Megaworld, the company that controls 49% of the project’s capital. The tower will have 36 storeys as well as a four-floor base, which will be 20m tall.

Original story: Eje Prime

Translation: Carmel Drake

The Profits Of Spain’s Top 5 Socimis Rise By 68%

16 November 2017 – Expansión

Spain’s principal Socimis are continuing to register record-breaking numbers and improve their balance sheets thanks to the on-going real estate boom and the appreciation of their assets. In this way, during the first nine months of the year, Merlin, Colonial, Hispania, Axiare and Lar España saw their combined net profits soar by 68% and the value of their property portfolios rise by 35%.

In total, the largest five Socimis that trade on the Spanish stock market earned €1,306 million during the nine months to September 2017. Their revenues during the same period amounted to €797 million, up by 30% compared to the first nine months of 2016. The reason why these companies earn more (profits) than they turnover (revenue) stems from the significant capital gains that they record from the appreciation of their real estate portfolios. In this way, for example, Merlin Properties and Hispania recorded €332.6 million and €204.82 million, respectively, for this concept, during the first 9 months of 2017.

These five real estate companies, which, with the exception of Colonial, debuted on the stock market just three years ago, currently own combined assets worth €24,295 million. Of that volume, two of the companies stand out due to their size: Merlin, which although it did not update its portfolio in the third quarter, is still the largest entity with an asset volume of €10,556 million; and Colonial, which owns properties worth €8,253 million.

Consolidation

The success of the Socimis, together with the good times that the real estate sector is enjoying, has led these companies to enter a new phase. In this way, after years of intense competition, the companies are starting to rotate their assets, by selling the properties that are not strategic as well as those that have reached a certain degree of maturity in their portfolios.

Such is the case of Merlin, which at the start of the year sold its hotel portfolio to Foncière de Murs Lar, for €535 million, and has deconsolidated its residential branch through Testa. Lar España has done something similar, given that in September it sold an office building to Colonial for €32.5 million, to focus on its current strategy of commercial assets.

Meanwhile, Hispania, which will focus its activity on hotels until its extinction, planned for 2020, is continuing with the unitary sale of homes and is also preparing the sale of its office portfolio, although it has had to postpone that operation until the first quarter of next year in light of the Catalan crisis.

These real estate companies are also backing investments that involve the revaluation of the assets they have acquired. Such is the case of, for example, Merlin, which after absorbing the real estate portfolio from Metrovacesa, is updating its portfolio, with an investment of €95 million to renovate six shopping centres. The Socimi in which Santander and BBVA hold stakes is also investing another €46 million in the construction of a new office tower (Torre Chamartín) in Madrid and in the renovation of Torre Glòries. Meanwhile, Lar España has managed to increase the value of its portfolio by more than €230 million with respect to the purchase price of its properties.

Moreover, the market is preparing for consolidation between the Socimis. The first move in this sense came last Monday with the launch of a takeover by Colonial for Axiare. The former announced the purchase of an additional 13.3% stake in Axiare on Monday and a takeover bid for the remaining 71%.

Stock market

Merlin, Hispania, Axiare and Lar raised almost €2,560 million in their respective debuts on the stock market and they have a combined market capitalisation of €9,060 million.

Including Colonial, whose General Shareholders’ Meeting approved the adoption of the special tax regime for Socimis in June, with retroactive effect to January, the stock market value of the large Socmis amounts to €12,038 million. In addition, Colonial’s bid for Axiare has raised its stock market value by €154 million in three days.

Original story: Expansión

Translation: Carmel Drake

Sabadell Seeks Approval From Creditor Banks To Buy Duro’s HQ In Madrid

17 November 2017 – El Comercio

Banco Sabadell has provided a solution to unblock the complex situation that Duro Felguera finds itself in. With its proposal to purchase the building that houses the Madrilenian headquarters of the Asturian group, the firm has a glimpse of the possibility of definitively unblocking the negotiations between the company and the creditor bank.

Duro has already approved the sale of the aforementioned property to Sabadell. Now the rest of the banking pool just needs to give its approval to the purchase of the building, for which the financial entity will pay between €30 million and €33 million. If this happens, according to sources familiar with the process, the operation could be signed as early as next week. Without further ado. Because time is running out for the Asturian engineering company.

From the sale of the Madrilenian building, Duro would record revenues of €10 million, a deposit that would serve as an emergency guarantee so that, in turn, the creditor banks could release the rest of the avals, amounting to up to €31 million. In this way, the Asturian group would be in a situation to start entering into contracts once again.

It is precisely the lack of avals that has forced the Asturian group to withdraw recently from four projects, with a combined total of €918 million: the Río Grande and Novo Tempo electricity generation centres in Brazil; the LNG terminal for Octopus LNG in Chile; and the hydrocarbon storage terminal for Vopak in Panama. On Tuesday, the company itself acknowledged in a statement presenting its results to the CNMV that “the risk is limiting (the winning of) new contracts and is making it hard to push ahead with projects in the portfolio”. In this way, it justified the losses recorded during the first nine months of the year, which amounted to €11.4 million.

Although it is still pending approval from the other creditors, Sabadell’s proposal for Duro’s Madrilenian building has won favour over the other offer, presented by Sandra Ortega, the eldest daughter of the founder of Inditex, who offered a higher amount: €38 million, but on the condition that the Asturian group remain in the property as the tenant for at least three years.

The option proposed by the financial entity, which operates under the brand Sabadell Herrero in Asturias, is more aligned with the interests of the engineering company, given that the group is also negotiating the sale of the two subsidiaries that work in the building in Madrid.

Although they acknowledge that it is still early days, the firm intends to divest Núcleo Comunicaciones, a division acquired in 2011, which specialises in the defence and air, maritime and environmental control; and Epicom, a firm that has 40 employees for which Duro paid €4.6 million in 2013 and which specialises in the development of security and defence software. Núcleo’s workforce comprises 170 professionals (…).

Leasing operation

In any case, both divisions may continue to occupy the building in Madrid for as long as they form part of Duro Felguer. According to the sources consulted, Sabadell intends to sign a leasing arrangement to allow the Asturian group to continue operating in the property (…).

Original story: El Comercio (by Susana Baquedano, O. Villa and C. Tuero)

Translation: Carmel Drake