Drago Capital Asks €400 Mn For a Gran Via Building

23/10/2014 – Expansion

Although after such significant single-building sales as the one of the Edificio España which was auctioned for €265 million or the Marineda shopping center sold for €260 million it seems difficult to beat the record, there comes the sale of the property situated at 32 Gran Via street in the heart of Madrid.

It used to house Prisa, a means of communication group, for years and now it prepares to welcome a new tenant – the largest street Primark store in Spain.

The building’s manager, Drago Capital, has put it up for sale at an overhelming €400 million asking price. Cushman & Wakefield was named to coordinate the operation.

Outstanding Location

The address of the property is the essence of its appeal. One of the most desired high streets of Madrid, constantly busy and extremely popular among shopping lovers. In majority of cases, cinemas and small family businesses along the Gran Via have given way to international mega-stores. So has happened with the number 32.

In 2013, Drago Capital obtained a permission from the local authorities to create a retail area on the lower floors of the unit.

The Irish low-cost clothing brand, Primark, has been eyeing the Gran Via and other shopping streets of Madrid since long. The gigantic store will occupy 9.000 square meters of the 36.376 total area of the property. It is expected to open at the end of 2015.

In spite of the considerably high price, there are several investors interested in purchase of the unit, like Deka or Invesco, to name few. Such conservative buyers surely will appreciate a long-term tenant and the maginificent location of the 32 Gran Via property.

The transaction would mean enjoyable capital gains for Drago as it bought the building from Prisa together with two office buildings, one found on the Miguel Yuste street in Madrid (rented by newspaper El País) and the other on the Caspe street in Barcelona (Radio Barcelona), in 2008. At that time the fund, associating such prominent investors as PSP, Phoenix, Sun Capital and APG, paid a total amount of €315 million.

Apart from the assets acquired from Prisa, Drago Capital manages more than a thousand of branches let to Banco Santander and Bankia. Earlier this year, Drago and PSP bought the Castellana 200 complex in Madrid for €140 million, as well as a residential portfolio from Inverseguros, sealed at €142 million through the alliance with Rialto Capital Management.

The sale of 32 Gran Via building is expected to close still before the end of the year. The property is located adjacently to the unit which is going to be converted into a 5* hotel by Mexican investor Jorge Diaz Estrada.

Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE