Blackstone, Lar, Crown…the Appeal of the Port Feeds Valencia’s Logistics Boom

18 November 2018 – El Confidencial

The growth of cargo traffic at the Port of Valencia and its role as a maritime port of entry for the ‘hinterland’ that runs from the central area of the Mediterranean to Madrid and its metropolitan area, are feeding a boom in logistics operations in the area around the capital of the Community of Valencia. Large funds and multinationals such as Blackstone and the US manufacturer of metal containers for the agro-food sector, Crown Holdings, have pounced on the chance to occupy spaces in well-communicated areas, either to develop projects for third parties or to set up shop themselves ahead of forecast growth in operations towards clients located in the area.

The latest operation has been finalised very recently with the acquisition by Grupo Lar of a plot measuring 40,000 m2 for the construction of a warehouse measuring 25,000 m2 in Quart de Poblet, next to the access point to Valencia along the A-3 motorway, which connects the city with Madrid.

That ring road and the industrial estates located either side have been experiencing important movements for several quarters. Business sites such as those in Loriguilla and Riba-Roja are on the verge of saturation and are still welcoming new projects, such as the logistics platform that MRW inaugurated in July on the El Oliveral site. That same month, Blackstone acquired Lar España’s logistics portfolio for €120 million, which included land for development in Cheste (also on the A-3 axis) and a warehouse in the Juan Carlos I Park in Almussafes, where the Ford factory and an important proportion of its auxiliary industries are located. The speculative bet of the US investment bank is seeking to take advantage of the shortage of land dedicated to storage and transport management operations that is starting to be seen in Valencia.

Last year saw record leasing figures, with more than 220,000 m2 of space leased, up by 69% with respect to the previous year, according to a report compiled about the logistics market in the city by CBRE, one of the most active consultancy firms in this real estate segment in Valencia and its metropolitan area. The increase in leasing in Valencia is running in parallel to the market in Madrid, which rose by 100%, and despite a notable decrease in Barcelona, which saw a sharp drop in the volume of surface area leased (…).

CBRE has identified three major areas for logistics operations. The first is the town centre and the first storage arc focused on serving the city and its surroundings. The second arc is very closely related with companies linked to the port activity. That is where the Riba-roja, Loriguilla and Cheste industrial estates are located, on the motorway that connects Valencia with Madrid. Then, there are the new logistics developments that are being built in the north in Parc Sagunt (…).

The potential demand is high, estimated at 1.7 million m2 across the three rings, according to estimates from CBRE. But the lack of available plots in prime areas is endangering the “major opportunities in the business”. The returns on those well-located plots are the highest (6.75%) of any of the main European centres, above those in Madrid and Barcelona (5.85%). “There is a general need for new at risk developments”, said the consultancy firm rather than for “turnkey” projects, which the local property developers have been focusing on until now.

Original story: El Confidencial (by Víctor Romero)

Translation: Carmel Drake

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