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All Market News: Spanish Real Estate Intelligence

CPPIB Puts Valencia's Largest Hall of Residence Up For Sale

25 April 2018 - El Economista

The Canadian pension fund CPPIB is going to take advantage of the investor appetite that currently exists for student halls of residence by placing the “For Sale” sign up over one of its assets in Spain. Galileo Galilei is the largest accommodation block for students in Valencia and one of the largest in the country, according to confirmation from several sources speaking to this newspaper.

With more than 500 beds, the asset will come onto the market during the course of the next month, given that its owner has entrusted the sales process to the international consultancy firm Savills, which declined to comment.

Currently, this hall of residence, which is the only one located on the campus of the Universidad Politécnica de Valencia, forms part of the Liberty Living portfolio, one of the largest managers of student halls of residence in the United Kingdom. CPPIB acquired the British group in March 2015 for GBP 1.1 billion (around €1.2 billion) and continued to grow its portfolio.

In December 2016, CPPIB closed an important operation with Blackstone, which divested a portfolio of 13 student halls, located in the United Kingdom, Germany and Spain, which included Galileo Galilei. For that package, comprising 6,484 beds, the pension fund paid around GBP 460 million (€536 million) to the US firm.

Almost a year and a half later and with the sector in Spain in full boom, CPPIB has decided to put this property on the market in an operation that, according to the experts, could amount to €32 million.

Galileo Galilei currently has 520 beds spread across individual, double and triple rooms, which range in price from €515/month to €846/month. That figure includes all consumption, restaurant services, doctors, cleaning and sports activities.

In addition, the hall of residence offers supplementary services such as laundry, sheet and towel changes, a university support academy for all subjects, IT and nutritional advice, amongst others. Moreover, on the ground floor, the property houses a shopping arcade with restaurants and cafeterias offering special prices for students and various local shops such as a beauty salon, a hairdresser, a print shop, a travel agent, a newsagent, a driving school and a language academy.

With these features and its high occupancy rate, Galileo Galilei is expected to arouse significant interest amongst investors looking to gain positions in the alternative asset market in Spain in the main university cities, such as the case of Valencia. “Since 2016, the city has appeared in the Top 100 ranking of the QS Best Student Cities, which highlights the best cities in the world for students. It is also one of the most sought-after locations by European students participating in the Erasmus program,” says Patricio Palomar, Senior Investment Consultant at Aire Partners.

In fact, the expert highlights the growth potential of the supply in this market, which in its metropolitan area “has around 165,000 students matriculated, a mobility rate of approximately 29% and just 4,123 beds in colleges and halls of residence, which results in a supply rate that falls below the Spanish average”, Moreover, Palomar points out that “the process of economic recovery currently being seen in this area is expected to lead to an increase in demand from domestic and international students alike, and this situation of imbalance may be accentuated even further”.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

 
RGA Rural Vida Acquires Office Building on c/Velázquez, 108 from Spanish Family Office

26 April 2018 - Press Release

The real estate consultancy firm Lassen Global has advised both the sale and rental of an office building in Madrid, on c/Velázquez, 108.

The property in question is very emblematic, located in the heart of the Salamanca neighbourhood. It comprises a surface area of 3,700 m2 and has 50 parking spaces in total. The consultancy firm has advised the vendor, a Spanish family office, throughout the sales process. The buyer is the insurance company RGA Rural Vida.

Following the acquisition of this asset by RGA Rural Vida, Lassen Global has also advised that firm regarding the rental of the building’s total available surface area, comprising approximately 3,000 m2 plus 39 parking spaces, which has been leased to the law firm Andersen&Tax Legal.

Lassen Global

Lassen Global is a boutique consultancy founded by Luis Cocero and Pablo de Luque Moreno-Luque. “It was created with the aim of providing a more transparent, personal and professional service to the real estate market”, explain its founding partners, both of whom have extensive experience in the provision of real estate services in the domestic market and who have carried out operations and provided consultancy services in various segments of the market, such as offices, retail and residential (…).

The company’s core business centres on the office and retail markets in Madrid and Barcelona (…).

Original story: Press Release

Translation: Carmel Drake

 
Marathon & Colliers Team Up to Finance €200M of Land Purchases in Spain

25 April 2018 - Expansión

MCAP, one of the funds managed by Marathon, is going to offer financing to property developers and cooperatives for the acquisition of finalist land amounting to €200 million.

The current objective of many international investment funds is to take advantage of the strong performance of the house buying market in Spain at the moment, either through the launch of their own property developers or by forming alliances with third parties.

The latest to join the bandwagon is the US manager Marathon Asset Management. The firm has announced that it is going to allocate €200 million to finance the purchase of finalist land in the Spanish market through its London-based subsidiary.

The resources, which come from funds managed by MCAP Global Finance UK, will be shared between property developers and cooperative managers in search of alternative financing and bridge loans for their projects.

The objective is to finance up to 75% of the land value (LTV) depending on the commercial viability of each project, explained sources at Colliers Internacional, Marathon’s partner in this plan. “We expect to close financing agreements amounting to more than €100 million over the next six months”, said Mikel Echavarren, CEO of Colliers International.

The team at Colliers plans to close the first agreements with cooperatives and property developers that are carrying out projects located in Madrid, Málaga, Valencia and Sevilla over the next few weeks. The minimum investment volumes will amount to between €2 million and €3 million.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake