Category: Offices

Hispania Sells Its Portfolio of Offices to Swiss Life

9 August 2017

 

The Ázcarraga 3 building in the Chamartín district (Madrid)

The Spanish REIT, which counts George Soros as an investor, is close to finalizing the sale of about twenty office buildings to focus on its hotel business.

Everything is ready for the sale of Hispania’s portfolio of offices, one of the most anticipated deals in the real estate market. Absent any last-minute hiccups, the Spanish REIT, which counts George Soros as an investor, will sign an agreement with Swiss Life for the sale of some twenty office buildings for about 510 million euros, according to EXPANSIÓN’s sources.

Hispania’s office portfolio is distributed between Madrid, where 16 buildings are located, as well as two offices in two buildings and one asset under development, Barcelona and Málaga, with five and one building each.

The real estate consultants CBRE, JLL and the law firm Freshfields have advised Hispania, while Swiss Life has been advised by Aguirre Newman and Garrigues.  The deal is expected to be finalized in the coming weeks, or even days.

According to the latest information provided by Hispania, the Spanish REIT’s portfolio of offices had a value of 584 million euros at the end of the first semester of 2017. This assessment included the Aurelio Menéndez building, sold in June to a family office for 37.5 million euros. Hispania plans on keeping its commitment to execute pending works on the asset, which it expects to complete in November, at which time the sale of the building will be finalized.

Not including Aurelio Menéndez, Hispania has offices with almost 182,000 square meters of gross leasable area, of which almost 21,300 meters are in Madrid’s financial district. It also has another 116,852 square meters in office buildings in the prime secondary zone. Hispania has 39,506 square meters in Barcelona and 4,288 square meters in Malaga.

According to the latest information published by Hispania, the occupancy level in these buildings is 84%, with an average monthly income of 13.8 euros per square meter.

Hispania acknowledged this morning in a relevant fact to the market that is negotiating the sale of office assets and added that it maintains contacts with, among others, Swiss Life, although it added that it has not yet reached any agreement on the matter.

Divestment

With this operation, the company managed by the Azora Group goes one step further in its strategy to divest itself of residential and office assets to focus on the hotel business, in which it will continue to invest before putting those assets up for sale as well.

In this regard, in February Hispania announced its intention to continue with its initial objective of selling all its assets, individually, in portfolios or through a sale or change of control in the company, before March 2020, six years after the company was floated. Under this strategy, shareholders decided to extend the investment period until 31 December.

In addition to George Soros, who controls 16.7% of the REIT through Soros Fund Management, Fidelity Management and Research (7%), Tamerlane (6%), BW Gestão de Investimentos (3,6%), BlackRock (3.3%) and AXA Investments (3%) are also investors.

Original Story: Expansion – R. Arroyo / S. Saiz

Translation: Richard Turner

Sale of Office Complex in Madrid Finalized

31 July 2017

UBS expands its Spanish portfolio with the purchase of an office complex more than 11,000 square meters in size.

Real Estate & Private Markets (REPM), the investment arm of the Swiss bank, has finalized the purchase of the business complex located on Ribera del Loira 56-58 in the Campo de las Naciones office area, near the Ifema fairgrounds.

According to Expansión, the complex houses the headquarters of the Accor hotel group and the company that runs the Dentix dental clinics. The UBS real estate fund paid 38.5 million euros.

It should be noted that UBS total holdings on the Iberian peninsula are valued at 772 million euros, with office buildings accounting for around 50% of the portfolio.

Original Story: misoficinas.es

Translation: Richard Turner

Montebalito Buys Office Building In Las Palmas For €11.8M

2 August 2017 – Bolsa Mania

On Monday, Montebalito announced its latest operation, its largest investment for at least a decade: the acquisition of an office building in Las Palmas for €11.8 million. According to the real estate company, this operation fits into its new strategy to rotate its asset portfolio, selling properties located overseas to reinvest all of the proceeds it obtains in Spain.

The property acquired in Las Palmas is the ‘Iberia’ building, an office block located in the heart of the city’s administrative centre. It has a surface area of 3,931 m2, spread over six storeys, as well as 134 parking spaces. Moreover, the property, which was constructed in 2005, is fully occupied with “stable and high-quality” tenants, including PwC, Repsol and El Cabildo de Gran Canaria.

In terms of the amount paid for the asset, Montebalito will pay around €3.5 million in cash, using its own funds. Another €4.8 million will be financed through a mortgage subrogation and the payment of the remaining €3.4 million will be deferred, although that sum must be paid before the end of this year. Experts calculate that the building generates annual rental income of around €820,000. According to José Luis Rodríguez, Director General of Montebalito: “We are growing as a company. The purchase of this new property strengthens our asset portfolio with stable rental income of almost €1 million per year” (…).

Original story: Bolsa Mania

Translation: Carmel Drake

UBS Buys Office Building In Madrid For €38.5M

31 July 2017 – Eje Prime

UBS Asset Management has acquired a new asset in Spain. Through its Real Estate & Private Markets (REPM) division, the investment arm of the Swiss bank has completed the purchase of the business complex located at number 56 on Calle Ribera del Loira, in the Campo de las Naciones office district, alongside the Ifema exhibition halls. UBS’s real estate fund has disbursed €38.5 million for the asset.

The building acquired by UBS has a surface area of 11,549 m2, divided into two buildings, separated by a central atrium. Moreover, it has more than 300 parking spaces. The complex houses the headquarters of the hotel group Accor and the dental clinic company Dentix.

The Ribera del Loira operation comes just a month after the Swiss bank’s most recent investment in Madrid when UBS Asset Management purchased two logistics assets spanning almost 35,000 m2 located on the PP10 industrial estate in Leganés. It paid just over €35 million for those properties.

The Swiss bank arrived in Spain with its real estate investment arm. Through seven investment funds, UBS owns a portfolio worth €772 million containing mainly offices, which account for around 50% of the portfolio, as well as retail assets (which represent 37% of the total) and logistics properties.

Original story: Eje Prime

Translation: Carmel Drake

French Fund Heraclès Arrives In Spain & Acquires La Vega Shopping Centre

26 July 2017 – Eje Prime

A new fund is entering the Spanish market to achieve its objectives. Heraclès Investissement is joining the likes of Cogress, Blackstone, Shaftesbury and Thor Equities and is launching a subsidiary in the Spanish market, according to sources at the company. The acquisition of assets in Spain will help with the group’s international expansion plans, which include constructing a portfolio of assets worth €1,000 million by the end of next year.

Heraclès Investissement has opened its office at number 63 on Calle Velázquez, from where it will plot its adventures in the Spanish market. To this end, the fund has hired David Acea Lorenzo, former executive of companies such as Isolux and Tele2 Comunitel, as the Director General of the group in the country, which began its operations in the market in June.

The group, which focuses its activity on the development, investment and management of real estate assets, has created a corporate web in Spain to articulate its acquisitions. Heraclès Investissement has constituted Heracles Desarrollo, for the purpose of carrying out real estate developments, Heracles Gestión to administer real estate properties and Heracles Real Estate, through which it will articulate its purchases in the country.

In addition to these companies to manage and acquire its assets, Heraclès Investissement has also constituted a subsidiary with its first acquisition. The company has acquired the La Vega shopping centre, located in Madrid, which has a retail surface area of 9,000 m2 and an Alcampo supermarket measuring 18,000 m2. The group did not want to make public the price of that operation.

According to the group’s most recent results, Heraclès Investissement closed last year with an asset portfolio worth €353 million and its aim for this year is to almost double the value of its stock of assets to €700 million. Nevertheless, its more ambitious objective is to expand its portfolio to include assets worth €1,000 million by the end of next year.

The group owns commercial assets, offices and residential properties. Until now, Heraclès Investissement, which was founded in 2003, has invested €57 million in the acquisition of around fifteen commercial properties, which have a combined surface area of 15,569 m2 and which generate annual rental income of €5.2 million.

Heraclès Investissement’s block of residential properties comprises seven assets, most of which are located in France, and for which the group paid €60 million. Meanwhile, the group owns seven offices, according to the latest available data, and offices represent the segment in which the group has invested the most to date (€72 million) (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Barclays Leases Central Madrid Office From Mutua Madrileña

26 July 2017 – El Confidencial

Last year, just a few months apart, Mutua Madrileña and Barclays starred in two of the most important office transactions in the capital’s recent history.

On the one hand, during the summer, the insurer broke a decade of investment drought when it acquired the property at number 51 on Calle José Abascal, the former headquarters of Fórum Filatélico.

On the other hand, in the autumn, the British bank took the decision to sell its last jewel in Spain with the sale of the property at number 1 Plaza de Colón, an operation that was completed at the beginning of this year.

Now, the paths of these two entities have crossed again with a rental agreement that they have signed for Barclays to occupy the whole, recently refurbished, Mutua Madrileña building.

The property, located just a stone’s throw from the heart of the Paseo de la Castellana, has a surface area of 3,600 m2, spread over seven floors and 62 parking spaces. It has just been renovated in accordance with the latest energy efficiency and sustainability technologies.

Mutua Madrileña acquired the building for €30 million from Credit Suisse, an entity that had, in turn, taken over the property during Fórum Filatélico’s bankruptcy process (…).

Now that the property has restored its past splendour, Barclays will install its investment banking and corporate banking activities there, given that it sold its entire retail business to CaixaBank two years ago for €820 million.

Barclays’ former headquarters on Plaza de Colón was acquired by CBRE GI, which also plans to carry out a comprehensive renovation of that property, which may be used for retail purposes in the future.

Original story: El Confidencial (by R. U.)

Translation: Carmel Drake

Royal Metropolitan Buys Bancoval’s HQ In Madrid For c. €20M

25 July 2017 – Expansión

The headquarters of Bancoval in Madrid has a new owner. The fund manager Royal Metropolitan has closed an agreement with Inversis to purchase the building, located at number 20 on the Madrilenian street Calle Fernando El Santo.

The operation has been closed for a price of just over €20 million, which is equivalent to around €7,400/m2, according to market sources.

Last year, Inversis – owner of Grupo Banca March – acquired the subsidiary of Royal Bank of Canada (RBC) – later renamed Bancoval – and inherited this asset.

A year later, the financial institution decided to put the building up for sale to take advantage of the good times in the real estate sector and the interest from investors in assets in the best locations. Savills has participated in the transaction, which has been closed in record time, advising the buyer, and Deloitte has advised the vendor.

The building has a gross leasable area of almost 2,700 m2, distributed over seven floors, as well as two basement floors for parking with more than 700 m2 of additional space. The building, constructed in 1967, was renovated in 1998 and received a special mention from the Town Hall of Madrid in 1999 for the urban planning, architecture and public work awards, within the renovated building category.

This property is located in the Almagro district – one of the most-sought after in Madrid for investors due to the scarcity of prime products there -. The location, its renovation potential and the possibility of using it for offices (for one or more tenants) or for residential purposes, since it has licences for both uses, constitute some of the main advantages of the asset.

Investor interest

The office market is still one of the star segments in the real estate sector. In the first half of the year alone, the volume of investment in the office market in Madrid and Barcelona exceeded €1,100 million. Although the growth in rents is still in its infancy, an improvement is starting to be felt in buildings located in the business district and in the best-located areas, and upwards movements are forecast for the second half of the year.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Meridia Buys Assets In Madrid & Toledo For €40M

25 July 2017 – Expansión

The fund manager Meridia Capital will invest €40 million on the purchase and refurbishment of two office buildings in Madrid and a logistics warehouse in Seseña (Toledo), according to a statement issued by the company.

The logistics platform in Seseña, acquired by one of the funds of the manager, Meridia II, occupies a surface area of 40,000 m2. One of the office buildings in Madrid, which has a surface area of 4,000 m2 and 70 parking spaces, has been acquired by Meridia II and the other one, which spans 8,300 m2 and has 140 parking spaces, has been purchased by Meridia III.

The CEO of Meridia Capital, Javier Faus (pictured above) explained that the Spanish market for value added assets offers “great opportunities”. He also added that the manager expects to invest the remaining capital from its specialist funds (Meridia I, Meridia II and Meridia III) in the hotel and real estate sector over the next 12 to 18 months.

Original story: Expansión

Translation: Carmel Drake

Amancio Ortega Earned €72M From His Property Portfolio In 2016

24 July 2017 – Expansión

A portfolio worth €6,719 million containing assets spread over markets as diverse as Spain, Canada, the United Kingdom and Korea. That summarises the real estate activity of Amancio Ortega, founder and majority shareholder of the textile giant Inditex.

The fourth richest man in the world (exceeded in the ranking only by Bill Gates, Warren Buffet and Jeff Bezos), with a fortune worth $80,400 million according to Forbes, has allocated most of the revenues obtained from the annual dividend he has received from Inditex for the last two decades, to creating one of the largest personal real estate portfolios in the world. Through his firm Pontegadea Inmobiliaria, Ortega has acquired buildings, primarily offices and retail premises, located in a multitude of markets.

Acquisitions

In 2016, Ortega starred in the largest purchase of an office building in Spain, by paying €490 million for Torre Foster, one of the skyscrapers that forms part of the Cuatro Torres de la Castellana complex in Madrid. Months before, Pontegadea Inmobiliaria made its debut in South Korea when it acquired the M Plaza commercial complex. For both properties, Ortega’s company spent €662 million in total, according to the most recent results presented by the company.

Also in 2016, Inditex’s largest shareholder spent around €129 million on a building in San Francisco (USA).

These investments allowed Pontegadea Inmobiliaria to increase its total asset volume by €661 million in 12 months. At the end of 2016, the company owned net assets worth €6,475 million, up by €373 million compared to the previous year.

Despite this increase in assets, Pontegadea’s revenues and profits decreased last year. Revenues amounted to €120 million, compared to €129 million in 2015. Nevertheless, the gross operating profit rose slightly in 2016 to €102 million, compared with €101 million a year earlier. Last year, Pontegadea’s profit amounted to €72 million, down by 30%. The company attributes this decrease (the second consecutive fall, given that it earned €182 million in 2014) to “currency fluctuations”, which “generated negative exchange rate differences of €19 million, concentrated primarily in the variation of the value of the pound sterling”.

The British real estate market is one of Pontegadea’s favourite destinations. In London alone, Ortega’s property arm has invested at least €3,000 million. Some of its properties include Rio Tinto’s headquarters, acquired for €335 million in 2015 and Devonshire House, for which it paid €480 million in 2013. In March, Pontegadea covered a €114 million capital increase of its British subsidiary (Pontegadea UK).

In Spain, in addition to Torre Foster, also known as Torre Cepsa thanks to its tenant, Pontegadea also owns Torre Picasso, Gran Vía 32 and several buildings along La Castellana.

Pontegadea Inversiones

Ortega’s property arm forms part of the business conglomerate that the founder of Inditex has controlled for several years through Pontegadea Inversiones. That company, which groups together its majority stake in the textile group (59.29% in total), recorded revenues of €23,649 million in 2016, compared with €21,234 million a year earlier. Last year, the company’s profit amounted to €3,277 million, up by 8.3% compared to the previous year.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Hispania Finalises Sale Of Its Office Portfolio To Swiss Life

24 July 2017 – Expansión

Hispania is stepping on the accelerator in its divestment process and is pushing ahead with negotiations to close the sale of its office portfolio. The Socimi in which the multi-millionaire George Soros holds a stake is negotiating exclusively with Swiss Life regarding the sale of more than twenty buildings for a price that will amount to approximately €500 million.

In the final stretch of the process, Swiss Life has fought off the other candidates, including Starwood Capital, and has positioned itself as the favourite to acquire this portfolio, which includes 24 office buildings in Madrid, Barcelona and Málaga, according to market sources.

The operation, which is currently in the due diligence phase, forms part of its asset divestment strategy, prior to its liquidation, which the real estate firm managed by Azora began in June.

The process

Sources at Hispania consulted in this regard say that the operation “is not closed and that the asset sales process is still on-going”.

Hispania’s portfolio includes 24 assets, with a gross leasable area of around 150,000 m2. At the end of the first quarter, Hispania’s office portfolio was worth €526 million.

Hispania closed its first quarter of the year in the office segment with an average rental income of €13.8/m2/month, which represents an increase of 7% compared to the first quarter of 2016. During the first quarter of 2017, the company signed new contracts for 5,085m2 of space, which allowed it to increase its occupancy rate to 82%.

Hispania, which was created in 2014, is scheduled to be sold in March 2020, when it celebrates its sixth anniversary since debuting on the stock market.

As part of this strategy, Hispania announced in June the sale of the Aurelio Menéndez office building, located on the Madrilenian Calle Suero de Quiñones.

That building, which has a gross leasable area (GLA) of more than 4,700 m2, was sold to a family office for €37.5 million, which represents a price of €7,800/m2.

Hispania’s total office portfolio includes 18 buildings in Madrid – representing 75% of the total – and a plot of land to be developed. Notable properties include Edificio Torre 30 – previously known as the NCR Building – located on Calle Albacete, which is leased to Grupo Ilunion and which has a gross leasable area of 11,417 m2. Moreover, the company owns the Cristalia Play building (pictured above), located in the Campo de las Naciones area of the city; the Foster Wheeler building, located in Las Rozas; and the Murano building, on Calle Emilio Vargas.

In addition, the company owns five properties in Barcelona and another one in Málaga.

Asset portfolio

Although the Socimi managed by Azora specialises in hotel assets, it has made significant investments in offices and the residential segment over the years since its creation.

At the end of the first quarter of the year, the company held a portfolio of assets worth €2,024 million. Of the total, €1,292 million corresponded to hotel assets, €526 million to office buildings and €230 million to residential assets.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake