Category: Offices

Hispania Commissions Block Sale Of Entire Office Portfolio

3 May 2017 – Mis Oficinas

According to elconfidencial.es, Hispania’s portfolio is worth €521 million, excluding one building measuring 4,800 m2, which is currently being refurbished and which will be sold separately to the law firm Uría Menéndez for its headquarters. The directors of the Socimi have held meetings with the major real estate consultancy firms with the aim of closing the agreement and commencing the sale.

The newspaper reports that during the course of this week, the main consultancy firms that operate in Spain, such as CBRE, Aguirre Newman and Cushman & Wakefield, have submitted their proposals to be awarded the project.

The Socimi has decided to focus solely on its hotel business, and whereby divest all of its homes and offices. The company hopes to sell its 26 office buildings, which have a total surface are of 181,945 m2, before July. Most of the offices are located in Madrid (78%), followed by Barcelona (20%) and Málaga (2%). In addition, the entity has 754 homes to sell.

With this project, Hispania will be able to return to its investors a large part of the €1,118 million that was entrusted to its manager Azora, thanks to whom a portfolio worth more than €2,000 million has been created. Despite having received several offers for various assets, the company has opted to sell the assets in a block, to allow it to obtain profits more quickly and to be able to return its contributions with the agreed interest amounts.

Original story: Mis Oficinas

Translation: Carmel Drake

Telefónica To Lease Out 1 Building At Its Las Tablas HQ In Madrid

30 April 2017 – El Confidencial

A year after taking over the Presidency at Telefónica, José María Álvarez-Pallete (pictured above) now has the telecoms operator’s first major real estate operation on his desk: the rental of one of the 13 buildings at the entity’s Madrid headquarters, specifically, the complex known as District C.

The company has launched a tender process with the country’s main real estate consultancy firms, with the aim of selecting one of them to find a new tenant for the North 3 Building. All interested parties should submit their bids within the next few days, given that the operator has asked for them to submit their projects after Easter. (…).

With this tender, Telefónica confirmed the rumours that have been circling for a while, which were further fuelled when the operator’s employees vacated the North 2 and 3 Buildings. The properties are located in one of the corners of the main face of the complex. Almost 10,000 people work at the headquarters on a daily basis.

In the end, after considering various options – ranging from organising a kind of small Silicon Valley for startups to selling the building – the team led by Álvarez-Pallete has opted to rent out at least one of its properties. And this option promises to receive interest in the market, given that in the past, commentators have speculated about the possibility of companies such as L’Oreal and Huawei being interested in moving their headquarters there, and which moves the group away from the possibility of selling the entire complex.

The option of Telefónica selling District C has been on the cards for several years – the idea was that it would remain as the tenant with a long-term contract, in order to obtain a sizeable cheque with which to reduce its significant debt balance. In fact, many funds have called at its door, but with offers that have always fallen well below the company’s €3,000 million asking price.

In addition, the new accounting legislation that, from 1 January 2019 onwards, will oblige firms to account for rental commitments as debt, means that any kind of “sale & leaseback” operations that the firm may have been considering under the prism of reducing its financial commitments would be significantly less attractive.

Located in the Madrilenian neighbourhood of Las Tablas, District C opened its doors a decade ago, after Telefónica took the decision to bring together all of its employees in Madrid in a single headquarters. Previously, they had been distributed across around thirty buildings.

Although the option of building a skyscraper was initially proposed, in the end, a horizontal design was chosen by the architect Rafael de la Hoz, with independent, but perfectly connected buildings within a single district. From there emerged what is popularly known as District C – the Communications District – although its official name has been the Telefónica District for over six years.

The complex has a total constructed surface area of 370,000 m2 and more than half, 180,000 m2, corresponds to the 13 existing office buildings: four of those, located at the corners have ten storeys each; another four have four storeys; four more have three storeys, whilst the main building, in the centre, has a surface area of 16,480 m2.

In addition, District C has 20,000 m2 of space dedicated to all types of auxiliary services, from a children’s nursery to shops; 130,000 m2 of space comprising open areas and gardens; and 5,000 parking spaces.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

The Montoro Family Prepares For Monthisa RE’s IPO

28 April 2017 – El Confidencial

With the discretion that characterises family businesses, the Montoro family, which owns the real estate firm Monthisa, has been working for two years on one of the major milestones in its recent history. Known as Project Maura, the operation is aimed at creating a large portfolio of rental assets, with the firm’s debut on the stock market as the ultimate objective.

To deal with this firm, the company segregated its entire real estate business into the company Monthisa Real Estate, which was just another subsidiary until then, and sold one third of the capital to the US fund Proprium Capital, the same entity that has been a shareholder of Grupo Lar for almost a decade, which currently controls 16.5% of that company’s shares.

This asset manager is the heir of Morgan Stanley’s former special situations fund, which ended up being spun off from the parent company in the United States for regulatory reasons, although the management team continued, with Tim Morris at the helm.

Although Proprium – whose representative on the Board of Monthisa Real Estate is Philipp Westermann (…) – is a minority shareholder, the two partners signed a pact by virtue of which they established joint control over Monthisa Real Estate and committed to multiplying the assets in record time.

The result of this alliance has been the creation of a new real estate giant, whose first major purchase was the acquisition of the El Corte Inglés’ ground-floor retail premises on Paseo de la Castellana for almost €150 million, an operation that was closed in September last year; and most recently, the purchase of a building on the Madrilenian Calle Montera, which will be used for tertiary activities (offices and a hotel).

Following these operations, Monthisa Real Estate has a portfolio worth around €250 million, given that the company was constituted with commercial premises, offices and hotels that the Montoro family already controlled, worth more than €100 million.

Its assets include: the Correos Building, so called because the tenant is the public postal company; number 8 on Ribera del Loira, currently occupied by Dell; and the Hotel Radisson, on Calle Moratín 52, on the sought-after Prado Recoletos thoroughfare.

But the Montoro family and Proprium are also rotating their asset portfolio, as demonstrated by the sale of the office building that they used to own in Berlin – a 7,975 m2 property, leased in its entirety to MTV; and a unit in the Plaza Norte 2 shopping centre, occupied by Cinesa cinemas.

Survivor of the crisis

Monthisa is, together with Lar, GMP and Pryconsa, one of the few domestic real estate companies that managed to survive the crisis and, like the first two, it is committed to carving out its real estate business and teaming up with overseas funds to take advantage of the recovery in the sector.

Before reaching this point, the Montoro family’s property development arm regularised its situation with Sareb (…) and reached an agreement with the entity chaired by Jaime Echegoyen to develop properties jointly.

Following all these changes, the next major milestone involves turning Monthisa Real Estate into an iconic real estate company and, if the script is followed, providing an exit for Proprium, with the capital markets as the preferred option.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Clemente: “Merlin May Participate In A Future Wave Of Socimi Mergers”

26 April 2017 – Cinco Días

He is one of the stars of the new real estate sector. In 2014, Ismael Clemente (…) created the Socimi Merlin Properties out of nothing. In less than three years, it had debuted on the Ibex 35 to become the largest player in the sector by market capitalisation. The company’s CEO convinced international funds to back the recovery in Spain and later on, he adopted an aggressive acquisitions policy.

First, Merlin acquired Testa from Sacyr, and then it absorbed the tertiary assets (shopping centres and offices) of Metrovacesa, which made way for Santander and BBVA to enter that company as major shareholders. Merlin Properties now has properties amounting to almost €10,000 million in its portfolio. Here, Cinco Días interviews the CEO.

Q: Merlin has grown very quickly. What are your plans now?

A: During 2017, we are focusing on managing our assets and on consolidating the company after several years of rapid growth. Over the next few years, we will invest in creating value from our properties, above all, rather than in buying more assets on the market. Right now, it is hard to justify any asset purchases to our shareholders because of the prices.

Q: In other words, you are going to withdraw from the market because of the high prices?

A: It seems like we have been very active in the market, given our recent acquisition of Torre Agbar in Barcelona, but really, since the middle of 2016, we have had a quiet period. Nevertheless, we knew that we wanted to increase our exposure in Barcelona and Lisbon and that is what we have done.

Q: What do you think about the future of the Socimis?

I think that we have a rather interesting period to look forward to because the Socimis have undergone a settling down period, and are now focusing on different specialisation strategies. There will be less purchasing activity and we will see more M&A activity between entities. (…).

Q: Might Merlin participate in any mergers?

A: Maybe, but it will take a while for the merger period to really get going. If we find something that we think may have value for our shareholders, then we may participate in the future wave of mergers between the Socimis.

Q: Why would Merlin be interested in that?

A: We would be interested if we could strengthen one of our areas of activity, if it was good for us from a cash flow point of view or if such an operation would contribute an asset that complemented the quality of our portfolio particularly well.

Q: Will we see mergers amongst the large players?

A: There are two very large players, us and Colonial, which is not actually a Socimi, even though it may as well be. Any of the large players could be interested in any of the small entities on the stock market, and even, eventually, on the MAB.

Q: Can we expect to see mergers in 2017?

A: It is still too early. I think that we will see some activity from 2018 onwards. What we are not going to see is mergers between real estate companies and residential developers. I don’t think that there will be any interaction between those two sectors. The starting point features five large players, including Colonial as a Socimi equivalent, and 30 entities on the MAB, where the largest players are GMP and Iba Capital. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

March Family Sells Vodafone TV’s HQ In Madrid For €13.3M

26 April 2017 – El Confidencial

Last Tuesday (18 April), the March family closed its first major sale of an entire building, in an operation that forms part of the asset sale plan that it has been immersed in for several years now. After taking the decision, in the spring of 2015, to rotate some of its property portfolio, the Mallorcan dynasty has now completed the divestment of an office building located in the elitist Madrilenian urbanisation of La Florida.

The building in question houses the headquarters of Vodafone TV. It has a surface area of 4,900 m2, spread over five floors (basement, -1, ground, 1st and 2nd) and 140 parking spaces. The telecommunications operator recently renewed its rental contract there for another 10 years.

The purchaser is the Mutualidad de la Abogacía, which has been advised by Cushman & Wakefield and which has paid €13.3 million for the building. It is the fifth property that the buyer has acquired in just over a year, after taking control of properties such as number 12 on the Madrilenian Calle O’Donnell last June.

Corporación Financiera Alba, the holding company owned by the March family, which has been advised during the operation by Aguirre Newman, valued this building on its books at €11.2 million, which means that it has managed to close the transaction at a substantial profit. In fact, this asset was the eighth most valuable in the entire portfolio of Alba Patrimonio Inmobiliario, the direct holding company of these properties, whose jewel in the crown is number 89, Paseo de la Castellana, which it acquired two years ago for €147 million.

Despite having put the “for sale” sign up over a significant number of subsidiaries and investments, until now, the March family had barely moved an inch in the real estate market. The only exception to that rule was the sale of three floors and several parking spaces on Calle Miguel Ángel, 23 to Axiare, in a complex operation handled in four parts back in February, whereby the Socimi managed to acquire the entire building.

The March family is stepping on the accelerator

The sale of Vodafone TV’s headquarters, located at numbers 3 and 5 on Calle Basauri, comes just three weeks after Artá Capital, one of the investment arms of the Mallorcan dynasty, completed its exit from Flex, in which it used to hold a 26.3% stake, for €80 million.

The March family’s manager has also put its stakes in Mecalux and Panasa up for sale; meanwhile, Corporación Financiera Alba has been reducing its stake in ACS for several years, to bring it below the 3% threshold for the first time this month; and it is finalising the sale of Clínica Baviera to the Chinese group Aier Eye.

Following this operation, the appraisal value of the real estate portfolio owned by the Mutualidad de la Abogacía amounts to €701.5 million and its book value stands at €575 million, comprising 44 assets in total.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Savills: Office Inv’t In Barcelona Exceeds Madrid For First Time Ever

25 April 2017 – La Vanguardia

Transactions in the Spanish office market amounted to almost €900 million during the first quarter of 2017, more than twice the figure recorded during the same period in 2016. Moreover, Barcelona exceeded Madrid in terms of investment, for the first time, with a differential of €50 million – investment in Barcelona amounted to €450 million – driven by the purchase of Torre Glòries, according to data from the real estate consultancy firm Savills.

Two mega-operations amounting to more than €100 million each boosted office investment during the first quarter, which represented 30% of the total figure recorded during the whole of 2016. Firstly, during the second week of January, Merlin Properties announced the purchase of Torre Glòries (Torre Agbar) for €142 million.

The second deal saw the sale of the so-called Boston portfolio, comprising 14 BBVA office buildings (eight in Barcelona, five in Madrid and one in Valencia), which were sold to Oaktree and Freo.

According to Savills, the operation involving Torre Glòries is one of the largest recorded in Barcelona in recent years, exceeded only by the €145 million that Deka spent in 2010 on the former headquarters of Caja Madrid on La Diagonal.

The fact that 20 of the 35 assets that changed hands during the quarter were located in Barcelona significantly increased the Catalan capital’s share of the national total. The city accounted for 52% of total investment, which allowed it to exceed Madrid for the first time in the historical series.

The volume of office investment in Barcelona amounted to almost €450 million, compared with €40 million during the same period in 2016. In Madrid, office investment exceeded €400 million, an amount that was distributed between thirteen assets. In interannual terms, the volume of investment in the capital increased by 60%. One of the major operations in Madrid was the sale of Barclays headquarters in Plaza de Colón, which was acquired by CBRE Global Investors for more than €55 million.

Original story: La Vanguardia

Translation: Carmel Drake

Inmo Acquires 4.7% Of Colonial & Buys Puig’s HQ From BBVA

25 April 2017 – El Español

Inmo, the real estate company owned by the Puig family, has acquired shares in Inmobiliaria Colonial to take its stake in the company to 4.7%. Meanwhile, it has also purchased the headquarters of the Puig perfume and fashion company that BBVA put up for sale in October.

Inmo encompasses the real estate activity and assets of the family-owned group, and Inmo’s investment in Inmobiliaria Colonial comes in response to its “willingness to diversify” its exposure in the real estate sector, according to a statement issued on Monday.

Regarding the acquisition of Puig’s headquarters in Plaza Europa de L’Hospitalet de Llobregat (Barcelona), the property has 21 storeys and covers a surface area of 14,300 m2. (…).

Inmo’s announcement on Monday comes after Colonial reported in February that it had teamed up with the real estate company owned by the Puig family to develop a new office tower in Barcelona, an “iconic” building in the Catalan capital that will involve investment amounting to €32 million.

The project forms part of the investment in new real estate assets that the real estate company announced in its three markets: Madrid, Barcelona and Paris, for €400 million in total.

In the case of the new tower in Barcelona, the project will be constructed through a joint venture, which Colonial will constitute together with the Puig family’s real estate arm (50% each). The latter will contribute the land on which the property will be built.

The new tower will be located in Plaza Europa, next door to the headquarters that the perfume group rents out. The project involves building a 60m tall, 21-storey building, which will have a surface area of 14,000 m2. (…).

Colonial announced the new tower under the framework of investing in new assets that forms another part of its growth strategy, which it launched in 2005 after completing its clean-up and restructuring process.

Since then, the firm has accumulated investments in new assets amounting to €1,760 million, according to its President, Juan José Brugera. (…).

Original story: El Español

Translation: Carmel Drake

Oion Moves HQ To ‘Cesáreo Alierta’ Building In Zaragoza

20 April 2017 – CBRE Noticias

The reactivation of the economy, experienced over the last few months, has led to an increase in demand for high-quality assets, with certain companies now looking for new locations in order to improve the profile of their headquarters, as well as better facilities that are adapted to suit their current requirements.

Proof of this includes the latest move by the company Oion Servicios Jurídicos y Financieros, which specialises in providing services to companies in the administrative management and statistical computer analysis fields. Oion has decided to relocate its offices to the Cesáreo Alierta Building, 9-11, in Zaragoza (…), where it will occupy a total surface area of 3,040m2, spread over the ground and first floors of the property, which has one of the largest floor surface areas in the Aragonese capital. (…).

Other examples of office moves include Aerolínea Aragonesa Air Horizont’s transfer to the historical El Águila building on Calle Alfonso, number 3, in an operation advised by CBRE, where it will occupy the 5th and 6th floors. The property is situated in one of the most exclusive and representatives locations of Zaragoza and is equipped with some extraordinary facilities. Meanwhile, Grupo BC is going to relocate to the Aida Office Building, whose current occupancy rate exceeds 80%, thanks in part, to the refurbishment of its space and to the provision of more services within its facilities.

“At CBRE, we are observing a better positioning of offices that have recently undergone renovations or refurbishment work, to adapt them to the needs of companies. They are the ones that end up enjoying higher occupancy rates and higher rents. Proof of this is that demand for office space in the New Business Areas now accounts for 30% (of total demand) compared with 10% in 2014, versus the decline in the Centre, which has gone from accounting for 75% to 45%. These recent operations have contributed to reducing the availability rate below 20%, a figure not seen since 2008”, says Alicia Noguera, Head of Offices at CBRE Zaragoza.

The improvement in the market during the first quarter is clear, with around 4,000 m2 of space already leased out, compared with a total of 8,000 m2 during the whole of 2016. This takes the projections for the full year 2017 to more than 10,000 m2, which would represent a historical figure, although still well below other similar domestic markets, by size of stock, such as Valencia. (…).

Original story: CBRE Noticias

Translation: Carmel Drake

Laborde Marcet: RE Inv’t Amounted To €3,520M In Q1

19 April 2017 – Eje Prime

The retail and office segments are driving investment in the real estate sector in Spain. Real estate investment amounted to €3,520 million during the first quarter of the year, in terms of non-residential real estate assets, of which more than half were located in Madrid and Barcelona, according to the real estate consultancy firm Laborde Marcet.

By sector, retail accounted for 42.5% of investments, amounting to €1,495 million, whereby recovering the starring role that it had ceded to the office segment in recent months. Offices accounted for 24.7% of total investment (€868 million). Meanwhile, the hotel sector accounted for 22.2% of the market (€783 million) and logistics the remaining 10.6% (€374 million).

“The real estate sector is reaching exorbitant levels in terms of the final prices of operations because there is a clear mismatch between the demand that exists and the available supply” – said Miquel Laborde, Managing Partner at Laborde Marcet -; “cities such as Barcelona and Madrid have very attractive real estate assets for both real estate investment purposes, as well as for commercial objectives, but there are only a handful of assets available for the large number of domestic and overseas investors interested in acquiring them, which means that rental and purchase prices are rising and asset yields are reducing”.

In this sense, domestic investors closed four out of every ten transactions completed during the first three months of the year, which represented an increase in Spain’s weight in the non-residential real estate market with respect to 2016.

By nationality, British, US, French and German investors were the main representatives from overseas, and they were particularly active in large operations in the offices and shopping centre segments.

If investment continues in this vein for the rest of the year, the tertiary real estate sector will register a record real estate investment figure of €14,000 million, which would represent an increase of 21.7% with respect to the data obtained in 2015 and of 25.8% with respect to 2016.

Original story: Eje Prime

Translation: Carmel Drake

Merlin Buys Office Building In Portugal For €29M

19 April 2017 – Expansión

Last week, Merlin Properties announced a new investment in the Portuguese market. The Socimi in which Santander, BBVA and Popular own a stake, has acquired the Central Office building, located in the Expo area of Lisbon.

The property, located on the main avenue of Parque de las Naciones in the Portuguese capital, has a surface area of 10,310 m2, spread over 13 floors, plus 265 parking spaces.

Merlin has paid €29 million for the building, in other words, around €2,850 /m2, which places its initial gross yield at 6.8%. The property is leased out in its entirety to “first-rate companies”, said the Socimi.

The Socimi, which owns assets worth more than €9,800 million, has identified Madrid, Barcelona and Lisbon as the main destinations for its office investments. In the Portuguese capital, it already owns 50,000 m2.

Merlin Properties, which debuted on the stock market in the summer of 2014 without any assets on its balance sheet, closed 2016 with a net profit of €582.6 million and a recurrent EBITDA of €303.6 million, after recording revenues from property rentals amounting to €351 million.

The Socimi’s share price rose on the stock market on Tuesday (11 April, the date the office purchase was announced) by 0.23%, taking the share price to €10.84. Its market capitalisation exceeds €3,500 million.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake