14/07/2014 – Expansion
The property investment in Spain keeps climbing up driven by the change in perception of the country and the closing of significant operations by the “bad bank” observed since last summer.
During the first six months of 2014, non-residential assets (i.e. offices, commercial centers and retails, hotels, logistics hubs, parking lots and hospitals) purchase reached nearly €3.23 billion, compared with the €1.45 billion registered in the same period of time in 2013. The figure is staggering mostly due to the fact that the most robust activity usually occurs in the second half of the year. For instance, in 2012, only a €697 million amount was invested in H1.
“In summer 2013, there has been a turning point which allowed to conclude the year with a €3.8 billion investment volume. Now, we predict the year 2014 to end up with €6 billion, maybe even €7 billion”, says Patricio Palomar, the Research director at CBRE.
During the first quarter of the year, buyers spent €988 million on the Spanish property, by 132% more than in Q1 2013. Another €2.2 billion was invested from March to June.
While in the last months of 2013 most of the purchases were conducted by opportunistic funds, presently they are buyers of all kinds. For instance, Canadian fund PSP and Spanish Drago Capital acquired the Castellana 200 commercial & office complex for €140 million, after a controversial sale process at which the first winner was fund Anchorage.
Also, there has been another mega-transaction by Chinese magnate Wang Jianlin, president of the Dalian Wanda group, who paid €265 million to Banco Santander for the Edificio España building. The richest man in China is planning to invest in the property, converting it from an abandoned office to high-end residential and hotel space.
When it comes to asset typology, offices and commercial real estate (shops in the streets and malls) made over a half of the total investment with several transactions involving over €100 million paid for a building.
Precisely, four edifices in Madrid and one in Barcelona: the Edificio España, the Castellana 200, the Vodafone headquarters purchased by London & Regional Properties for €117 million from Banco Sabadell, as well as the IBM central premises acquired by Mexican Finaccess for around €130 million. In Barcelona, Axa Reim paid €107 million for the tower housing Telefónica also known as Diagonal 00.
In this segment, operations exceeded €100 million each as well. To illustrate, the purchase of six properties for €160 million by Baupost, GreenOak and Lar, or €115 million paid by U.S. fund Oaktree to CBRE Global Investors for the Gran Vía de Vigo shopping mall.
In total, the CRE investment this year multiplied by 5 compared with the previous year when the acquistions were principally focused on retails on the commercial streets in main cities instead of on large properties.
If it comes to the hotel sector, such significant sales as of the Intercontinental establishment in Madrid, included in a four-unit lot in France, Germany and Rome. The Spanish hotel was valued at €60 million. Also, Hispania the Socimi (REIT) paid €23 million for the Hotel Guadalmina in Marbella.
Original article: Expansión (by Rocío Ruiz)
Translation: AURA REE