Socimis & Foreign Funds Boost Investment in Office Buildings

28/11/2014 – Expansion

Capgemini, IBM, Vodafone, Citibank, HP and Sony have something in common. They all have moved their Spanish premises recently. According to an update by advisor JLL, a €1.54 billion amount was spent on office buildings year-to-date, a number that may rise up to €2 billion by end 2014. It stands in contrast with €672 million investment volume in 2013. ‘Reduction in risk and appearance of Socimis – Spanish counterparts of REIT vehicles – have been the main triggers for the change’, explains Juan Manuel Ortega, Capital Markets director at JLL Spain.

The increase is also reflected in average amount of the office deals as in many cases it exceeded €100 million. To give an example, the bullet-shaped tower Torre Agbar in Barcelona (visible in the picture) was sold to Emin Capital for €150 million and destined for a top-end hotel.

Also, British fund London & Regional Properties paid €117 million for the Avenida 115 building in Madrid, and Mexican fund Finaccess spent €130 million on Morgan Stanley’s old Madrid headquarters of IBM.

In Barcelona, Axa Reim purchased the Diagonal 00 building, formerly housing Telefonica, for €107 million (white building at picture’s bottom).

Other large-volume investments were carried out by insurer Zurich and private equity fund Blackstone which purchased building packages.

The Socimis

While deals sealed by the international funds were reaching €100 million, office building acqusitions closed by Spanish firms and investors oscillated around €40 milion. ‘The Socimis are thought to have spent most, however large part of their funds has foreign origins‘.

‘Currently, transactions valued at €500 million are pending closing and this will probably happen in the first quarter of 2015′, says JLL.


Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE