20 January 2015 – Expansión
Sale & Leaseback Transaction / The energy company is open to offers as it looks to sell its HQ property and continue as the long term tenant. Thus, begins another divestment plan to obtain financing of more than €800 million.
Repsol is exploring options for the monetisation of its new headquarters, a brand-new cutting edge property in the centre of Madrid, which opened a year ago and which has become the company’s flagship.
The energy company is sounding out the real estate market for offers, as it looks to sell the building and continue as the tenant under a long-term lease contract that would be reversible, i.e. a contract that would allow Repsol to repurchase the building at the end of its term. Such agreements, known as sale and leaseback agreements, have become popular in recent years, especially amongst groups with large property holdings, as they seek to optimise their finances.
The transfer of Repsol’s headquarters could be one of the largest real estate transactions of the year, at a time when the sector is showing clear signs of recovery. In the energy company’s favour, it has a solid position in the market, as an Ibex 35 listed company; something that would offset the location of its offices, which sit outside of Madrid’s financial district.
Repsol’s new headquarters are located on Calle Méndez Álvaro, in the central area of the city, inside the M-30 ring road, but far (6-7km) from the heart of the capital’s main business district, on the Paseo de la Castellana.
Occupying a total area of 123,000 square metres (66,300 above ground and 56,600 underground), the building, christened the Repsol Campus, was officially opened by the now King Felipe VI at the end of January last year.
The property, which stands on the site of old CLH (formerly Campsa) plots, was built by Sacyr. It cost almost €300 million in total, which included the purchase of plots (€155 million) and construction (€127 million).
The energy company, led by Antonio Brufau, is trying to obtain resources to finance the purchase of the Canadian group Talisman, a transaction announced last month that is valued at just over €10,000 million.
One of the key aspects that Repsol now has to focus on are the calculations for financing that purchase. The company announced that it is evaluating the divestment of assets that are “not linked to the price of crude oil” amounting to a billion dollars (more than 800 million euros at current exchange rates).
Repsol has been active in the real estate market in recent years. The energy company was one of four firms, together with Mutua Madrileña and the real estate companies Espacio (from the Villar Mir group) and Testa (Sacyr), that launched the development of the Cuatro Torres complex. Before its inauguration in July 2007, it received an offer from Bankia (then Caja Madrid) to sell its skyscraper, designed by the renowned architect Norman Foster, for €815 million.
With this amount, Repsol financed the development of its new headquarters in Méndez Álvaro. Prior to its opening, the company occupied 32,700 square metres at numbers 278 and 280 Paseo de la Castellana, in buildings owned by the real estate company, Metrovacesa.
Original story: Expansión (by M.Á.Patiño/R.Ruiz)
Translation: Carmel Drake