Merlin Given Green Light To Build Skyscraper In Las Tablas

11 November 2016 – Cinco Días

The Socimi Merlin Properties has been given the green light to add an important office complex to its already gigantic portfolio of real estate assets. The company has just completed an operation to purchase the Adequa business park in Madrid, in a transaction agreed over the summer with the fund Lone Star, for which it will pay €380 million.

According to sources in the market, the one outstanding item on the Socimi’s to do list was to obtain a construction permit to allow it to build an office block, measuring more than 100m tall, in the Adequa business park, which currently comprises six buildings.

As soon as the Socimi led by Ismael Clemente (CEO) obtained the permit, it paid €310 million to the fund plus another €70 million to complete that milestone, explain sources in the sector.

The US fund Lone Star put the business park up for sale in the spring of 2016. It was awarded the asset after agreeing to take on the debt of the now inactive company Bami Newco. That real estate company, created by the late Joaquín Rivero, filed for liquidation last year after going bankrupt with debt amounting to €652 million.

The former property developer had already drawn up plans to build the tower, which will require an investment of between €70 million and €75 million from the Socimi. The skyscraper will add office space of around 29,000 m2 to the business park. In addition, another adjacent building will be built, with a surface area of around 15,000 m2. Construction work is expected to begin in 2018 and terminate at the end of 2019.

Adequa currently has a surface area of 121,000m2, spread over six office buildings, as well as a centre for services and commerce (5,000 m2), which houses a gym, restaurants, a nursery and three padel courts.

The business park is located on Avenida de Burgos, at the entrance to the Las Tablas neighbourhood and is very close to BBVA’s new headquarters. It is home to the offices of Renault España, Técnicas Reuidas and Costa Cruceros, amongst others.

This is the first major operation undertaken by Merlin Properties since it completed the absorption of the historical Metrovacesa last month. The Socimi, created in 2014, now owns assets worth €9,600 million, which make it one of the top 10 Socimis in Europe. (…).

Santander, which used to be the largest shareholder of the former Metrovacesa, now controls 22.3% of Merlin; meanwhile, BBVA owns a 6.4% stake. The Socimi’s original shareholders include the fund Principal Financial Group, which retains a 3% stake.

Merlin, which is now chaired by Rodrigo Echenique – Vice-President at Santander – is also working on the development of another office building in Madrid, on the so-called Isla Chamartín, very close to Adequa, by the junction of the A-1 and M-11 motorways.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake