11 September 2018 – El Correo
It seems that, sooner or later, everything that is put up for sale in the real estate market in Bilbao ends up being sold. No matter how big the operation. The latest example is the building that houses Café Iruña; an iconic property in the heart of the city, which the Heredia-Spínola family has sold for around €18 million. The entire operation, from when the property was put on the market, to the negotiations and finally the sale, have been conducted with the utmost discretion. In the end, according to sources speaking to El Correo, a Bizcayan investment fund has taken ownership of the building, although international funds also expressed interest.
Initially, the asking price was €20 million, but after a few weeks, that figure was reduced to €18 million (…) for several reasons. According to experts consulted, one of the main drawbacks of the building is that it comes “with tenants” (…). And, what’s worse, many of those tenants pay low rents.
Specifically, around twenty companies undertake their activity in this property, ranging from law firms and attorneys to advisors, massage salons, yoga and pilates studios, insurance brokers, psychologists, study centres and a nursing home for the elderly. Some have long-term long contracts, which will force the new owners to hold intense negotiations if they want to evict them and make a radical change to the operation of the building.
In this sense, there is already talk in social media about the upcoming closure of Café Iruña, an icon of Bilbao since 1903, although that information has been categorically denied by its owners, Grupo Iruña Servicios de Hostelería. They explain that the business will continue – its contract runs until 2020 – and that no closures are planned.
Bilbao as a safe haven
In addition to all of that, another of the problems that the experts associate with this building and which may have made its sale more difficult than expected are its internal features, “it does not have an internal patio”, which makes the central spaces “very dark”, above all if the plan is to convert the property into housing.
Even so, despite everything, the building has now been sold and is another example of the appeal of Bilbao’s property sector. In reality, the real estate market has been consolidating its position for a long time as a safe haven for many investors who, with interest rates at minimum levels, are looking for alternatives to invest their money, albeit with moderate returns (…).
This is happening across almost all of Spain. But in Bilbao, there are additional attractive features: rents are high and land is in short supply. A good combination for doing business in the housing market. On the other hand, the environment is stable, a far cry from the upheavals in Cataluña (…). Moreover, with the disappearance of ETA, Euskadi has shed its straitjacket (…).
Original story: El Correo (by Luis Gómez & Luis López)
Translation: Carmel Drake