Apollo Negotiates Purchase of 14 Offices in Madrid from Merlin

23 October 2018 – Expansión

Apollo is maintaining its interest in the Spanish real estate sector and is considering increasing its footprint in the capital with the purchase of an office portfolio from Merlin. Specifically, the US investment fund is analysing the acquisition of a portfolio comprising 14 office buildings and business complexes located, for the most part, in secondary business areas of Madrid, according to market sources speaking to Expansión.

When consulted on the matter, both Merlin and Apollo declined to comment about the operation.

The offices, which together span a gross leasable area of 126,900 m2, were worth more than €300 million at the end of June 2018. The buildings are located in well-known business districts of Madrid, such as Sanchinarro, Manoteras, Arturo Soria and Avenida de la Ilustración, amongst others. Merlin inherited most of the assets following the integration of Metrovacesa’s real estate business, after the merger of the two groups in 2016.

The assets that Apollo is considering buying include the office building located at number 94 Calle Santiago de Compostela, next to Avenida de la Ilustración, which has a surface area of 13,130 m2; the Euronova business park in Tres Cantos, which has a surface area of 32,663 m2; a property located on Travesía de Costa Brava, in Mirasierra, measuring more than 16,000 m2 and leased to El Corte Inglés; and an office complex comprising two buildings on Calle Francisca Delgado, in Alcobendas, with a combined surface area of 10,896 m2.

Interest

If this operation goes ahead, Apollo, which has put Altamira up for sale, would be committed to Spain again. The investment fund, which made its debut in the country through the European Principal Finance Fund II – the vehicle that acquired 85% of Altamira at the beginning of 2014 and Evo Banco soon after – recently launched the third version of that European fund.

Specifically, as Expansión revealed on 8 October, Apollo has launched the European Principal Finance Fund III, containing almost $5 billion (€4.35 billion based on the current exchange rate). Some of that amount will be allocated to Spain (…).

Original story: Expansión (by R. Arroyo & D. Badía)

Translation: Carmel Drake

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