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BBVA Puts Logistics Warehouse Portfolio Up For Sale

13 April 2016 – Expansión

BBVA has put 441 properties on the market, primarily warehouses and logistics plots, which have a combined surface area of more than 500,000 m2.

BBVA has launched one of the largest operations involving the sale of industrial assets in the Spanish market. The entity has appointed BNP Paribas Real Estate to coordinate the divestment process of a portfolio covering a surface area of more than 500,000 m2 and containing primarily warehouses and logistics plots. The entity wants to tap into the investor appetite that exists in the market for this kind of asset, in the context of rising rents and the forecast recovery in demand.

According to sources, BBVA wants to close the sale of this portfolio, known as Detroit, by July. BNP Paribas Real Estate will be responsible for coordinating the whole process and for selling the assets. For the sale, all possible options will be accepted, ranging from the sale of the entire portfolio to a single investor, to the sale of different sub-portfolios to several interested parties. In addition, the sale of individual assets will also be considered. As such, potential interested parties include large international real estate funds, listed Socimis and several Spanish family offices.

Cataluña and Andalucía

The Detroit portfolio comprises 441 properties that currently sit on BBVA’s balance sheet, having been repossessed from borrowers in the past. 65% of the assets are located in Cataluña, the region in which the entity chaired by Francisco González took over six of the former savings banks. Another 20% of the assets are located in several provinces in Andalucía.

Other assets are also located in Galicia, Extremadura, Murcia, Baleares, Castilla y León, Valencia, Cantabria, Canarias and Castilla-La Mancha.

Of the 441 properties now up for sale, 327 are industrial warehouses, 28 are industrial or logistics plots and 86 are parking spaces. 376,000 m2 of the total surface area (550,000 m2) correspond to industrial warehouses.

Investor interest

“This is a great investment opportunity, given that industrial warehouses are becoming a sought-after asset in the market once again, due to the expected recovery in demand and the gradual absorption of the existing stock”, say sources at BNP. According to the real estate consultancy, rents for this type of asset are currently on the rise and yields are higher than those earned on other real estate assets, such as offices, shops and homes.

In 2015, tenants leased almost 1,000,000 m2 of logistics warehouses, up by 37% compared with a year earlier. The increase was particularly marked in Cataluña, where a historical record was broken for warehouse rentals, with 564,000 m2 of surface area leased, an increase of almost 80%, according to figures from JLL. The largest operations were closed in the fashion and automobile sectors, although the e-commerce sector also played an important role leasing facilities for the distribution of products purchased online.

In parallel, investment in the industrial and logistics sector amounted to €734 million in 2015, up by 25%. The main players were Socimis and overseas funds. The widespread interest caused yields to be compressed from 8% to 6.5%.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake