Bankia Will Earn Rental Income Of €324M From Torre Foster

6 April 2015 – Expansión

Bankia will earn €324 million from the rental of Torre Foster, the building that the bank owns in the Cuatro Torres complex on the Paseo de la Castellana in Madrid. In October 2013, Bankia signed an agreement to lease the property to Cepsa, a company owned by Abu Dabi. BFA-Bankia inherited the building from Caja Madrid, which purchased it from Repsol for €815 million in 2007. The lease contract was established for a period of eight years and may be renewed for another seven years. According to the annual accounts of Torre Norte Castellana, a fully owned subsidiary of Bankia, whose sole activity is the lease of the building, the annual rental cost is €21.63 million.

The entity must dispose of this asset as part of its restructuring plan. The rental contract, which was signed as part of the bank’s strategic plan for the period 2012-2015, included a purchase option, which is exercisable in 2016. It will be organised through the acquisition of shares in Torre Norte, at a price that will be determined on the basis of objective criteria that have already been agreed.

At the time, Bankia thought that the best way of generating value from Torre Foster was to rent it out; the building’s value was updated following the balance sheet clean up that the BFA-Bankia group performed in 2012, after its nationalisation. Torre Foster contains office space measuring more than 109,000 square metres, including a gross leasable area of 56,250 square metres, as well as 37,500 square metres in its five-storey garage, reports Europa Press.

Original story: Expansión

Translation: Carmel Drake