9 September 2016 – Expansión
The countdown has begun to one of the major operations of the year in the real estate sector. Ipic (International Petroleum Investment Company) – the Abu Dhabi state fund that owns the oil company Cepsa, the current tenant of the property – has notified Bankia of its intention to exercise its purchase option over Torre Cepsa, according to sources close to the operation.
The exercise of this call option unblocks the process that Ipic initiated several months ago, as part of its plan to execute the option to acquire the building and then sell it on to a third party almost immediately. On the basis of the offers received, the Arab Emirate fund has favoured the bid submitted by Pontegadea – the investment arm of Amancio Ortega.
Ponteagadea, which has become one of the largest real estate investors in Spain and overseas, is the clear favourite to purchase the property, which is located in the Cuatro Torres complex on Paseo de la Castellana (Madrid). Amancio Ortega, who is backed by the financial strength of his stake in Inditex, has offered to pay around €490 million for the property.
In October 2013, Bankia signed an agreement with Ipic to lease the tower that it owns, through its stake in Torre Norte Castellana. The lease contract was signed for a period of eight years, which may be extended by another seven years, on an annual basis.
Similarly, this agreement included a future call option, whose execution deadline is due to expire at the end of this month. Specifically, the expiry of this right drove Ipic to launch a process to look for investors interested in acquiring the asset. Ipic operates as a sovereign fund to channel energy investments from the Abu Dhabi Government.
According to Bankia’s audit report for 2015, the book value of the property is €384 million. That figure falls below the range of €400 million to €450 million at which the skyscraper was valued in 2013, when Bankia and Ipic signed their agreement.
Pontegadea is the second largest private real estate investor in Spain, with assets worth more than €6,000 million….surpassed only by Merlin (…). Amancio Ortega’s bid for Torre Cepsa is the favourite, but it is not the only one.
Other interested parties
Since the process to sell Torre Cepsa began, the asset has sparked interest amongst funds and investors, both at home and overseas.
The domestic players that have expressed interest in the asset include the Spanish Socimi Axiare. This real estate investment vehicle, which specialises in the office segment, held a portfolio of assets worth €1,048 million at the end of June.
One of Axiare’s main rivals is Merlin, the current owner of Torre PwC (previously known as Torre Sacyr Vallehermoso), which houses the headquarters of the professional services firm chaired by Gonzalo Sánchez, as well as the five-star Eurostars Madrid Tower hotel.
Torre Cepsa has 34 storeys and a surface area covering more than 109,000 sqm, of which 72,300 sqm corresponds to offices. The remaining space comprises five floors of parking.
Original story: Expansión (by R. Arroyo/M.A. Patiño)
Translation: Carmel Drake