Deutsche Bank Buys Diagonal Mar For €495M

2 August 2016 – Expansión

Yesterday, Deutsche Bank completed the purchase of the Diagonal Mar shopping centre from Northwood for around €495 million, making it the largest shopping centre transaction in the history of the Spanish market.

In this way, although the final price has been adjusted downwards with respect to the non-binding offer presented by the entity (which valued the asset at €505 million), it still exceeds the €451 million that Intu Properties paid for Puerto Venecia (Zaragoza) and the €375 million that Klépierre spent on the acquisition of Plenilunio (Madrid).

The operation also generates significant capital gains for Northwood, which acquired the property from the Irish bad bank Nama for €150 million in 2015. CBRE has advised this operation on the sell-side, whilst Deloitte advised the buy-side.

Background

The shopping centre, located in district 22@ in Barcelona, has passed through many hands since the real estate company Hines was awarded the mixed use project at the end of the 1990s. The project included a residential area, offices, hotels and a large shopping centre, with a constructed surface area of 100,500 sqm and a gross leasable area (GLA) of 87,000 sqm, as well as 5,000 parking spaces.

In 2002, the German investment fund Deka paid around €240 million for the property, which, was subsequently sold, in 2006, to the Irish investment group Quinlan for €300 million, in its first operation in Spain. Nevertheless, following the burst of the Irish bubble, the asset was taken over by the banks.

Three years after that operation and in a very different economic environment, the property has generated a lot of interest. Specifically, 18 candidates submitted non-binding offers for the property, including Axa, Invesco, Hines, Unibail, the Singapore sovereign fund GIC, Blackstone and the Socimi Merlin, which was the only Spanish company that submitted an offer, for less than €450 million. Only four candidates participated in the final phase: CBRE Global Investment, ECE, Henderson TH and Deutsche Bank.

In order to reposition the asset, Deutsche Bank plans to invest €30 million over four years in a project that includes restructuring the top floor of the shopping centre to create more space for high-end fashion brands (€15 million), refurbishing the other floors with a budget of around €8 million and renovating the centre’s exterior façade for almost €7 million.

With this renovation, the purchaser expects to strengthen Diagonal Mar’s competitive position and increase its gross operating profit (EBITDA) over five years from €20 million in 2015 to more than €26 million.

Impact

The shopping centre, opened in November 2001, was designed by Jean-Louis Solal and the architect Robert A.M. Stern. Diagonal Mar is located in a prime spot, approximately five kilometres north east of the city centre. With more than 200 outlets dedicated to fashion, restaurants, leisure, a bowling alley and other services, the centre has 4,800 parking spaces and an outdoor space: La Terrassa del Mar. Diagonal Mar received 16.7 million visitors last year, up by 2.3% and generated net sales – excluding Alcampo (which falls outside of the transaction perimeter) – of €210 million, up by 8.5%. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

French Chain B&B Opens 4 Hotels In Spain

8 July 2016 – Expansión

The French hotel chain B&B, one of the largest in Europe with a network of 321 establishments and annual revenues of €344 million, has started to expand its business into Spain. A few months ago, it opened its first four hotels here, all of which used to be owned by the Holiday Inn, in Valencia, Madrid, Alicante and Gerona, for a total investment of €14 million. It plans to open at least four hotels a year between now and 2020, with an average investment of around €5 million per property, which represents a total investment of approximately €80 million over the period.

The next hotel opening will be in Vigo, planned for December. B&B, which was acquired by PAI Partners in December, is establishing itself under two systems: the construction of buildings and the acquisition of existing hotels. The four Spanish hotels, which used to house Holiday Inns, were acquired and then transferred to the firm Foncier des Murs, owned by the Crédit Agricole group, which is the company’s financial partner for these types of investments and which itself owns 250 hotels that B&B operates.

The hotel in Vigo will follow the same pattern; meanwhile the company is looking for other opportunities to buy and construct hotels. The Director of B&B in Spain, Dennis Darrien, explained that the company has plans to construct one hotel in Barcelona, in the 22@ district, but that those plans are on hold due to the hotel moratorium established by the Town Hall.

The company is looking for hotels with between 80 and 150 rooms, in good locations.

B&B was created in 1990, as a chain for business travellers in France – where it now has 250 hotels, some of which it owns and others which it leases – with low cost prices. The CEO of the Group, George Sampeur, explained that in Spain they will also target the tourist market, given the nature of the country.

The company has eighty hotels in Germany, twenty-three in Italy, three in Poland, one in the Czech Republic and another in Morocco. It plans to expand to Latin America by opening its first hotel in Brazil, in Sao Paulo, before continuing to Curitiba and other areas in the south of the country.

In total, according to its business plan, B&B plans to open thirty hotels a year between now and 2020.

Original story: Expansión (by J. Brines)

Translation: Carmel Drake

The PSC Sells Its HQ In Barcelona For €10M

8 June 2016 – 20 Minutos

The PSC has sold its historic headquarters, on Calle Nicaragua in Barcelona, for €10 million to a company linked to the real estate sector, according to sources.

The political party signed the “contrato de arras” on Monday 6 June and now has eight months to vacate the property.

The building on Calle Nicaragua has a surface area of more than 4,700 sqm, spread over six floors, one of which comprises a 400 sqm parking lot. It has been on the market for more than a year: the socialist party evaluated up to three offers during that period before closing the deal.

The Catalan socialists have occupied the property for more than 40 years and have sold it in order to pay off some of the €12 million debt that is weighing down on the party.

Through this operation, the PSC joins CDC and Unió, which have also put their respective headquarters up for sale recently: the CDC managed to sell its building on Calle Còrcega in Barcelona a year ago and Unió is currently considering offers from potential buyers for its head office.

The search for a new space

The PSC is now looking for a new, smaller headquarters, measuring around 1,500 sqm, and is willing to rent or purchase a property in order to find an office that best suits its needs.

It is currently evaluating three options in the 22@ district of Barcelona, although it also has other options on the table in the Zona Franca area.

The PSC would like for its new headquarters to be located below (to the south of) Avenida Diagonal in Barcelona and for its price to be affordable.

Original story: 20 Minutos

Translation: Carmel Drake

Colonial Plans To Increase Its Share Capital By €265M

26 May 2016 – Expansión

Colonial will undertake a capital increase amounting to €265 million to allow it to continue adding office buildings to its portfolio. In parallel, the Group is preparing to make investments amounting to €400 million, including the purchase of a 4.4% stake in its French subsidiary SFL (Société Fonciere Lyonnaise) and several buildings in Madrid and Barcelona.

The capital increase should be approved at the General Shareholders’ Meeting on 28 June and will serve to finance some of the asset acquisitions by allowing Colonial to make some payments in shares. Following this operation, the Group’s market capitalisation will exceed €2,300 million.

The expansion of its stake in SFL, where it will end up controlling 57.5% of the share capital, will be performed through the acquisition of a share package from the Reig Capital Group. Part of the payment will be realised in cash (€51 million) and the remainder, through the delivery of 90.8 million new shares in the real estate company. The Holding company owned by the Andorran businesswoman María Reig will thereby control 2.5% of Colonial’s share capital.

The share capital will also serve to pay for the purchase of two office buildings in Madrid, currently owned by the Mexican group Finaccess and valued at €202 million. The buildings in question are IBM’s headquarters in Madrid, located on Calle Santa Hortensia and the building located at number 73 on Calle Serrano. The former has a total surface area covering 47,000 sqm and is one of the seven largest office buildings in the capital, whilst the second, with a surface area of 4,200 sqm, has been highly valued due to its location and the quality of its facilities.

In return for integrating these two properties into its portfolio, Colonial will grant Finaccess 288.6 million new shares in the real estate company, which means that the group will control an 8% stake in Colonial.

In parallel to these operations, the real estate group chaired by Juan José Brugera (pictured above, centre) has completed the purchase of another office building in Madrid. It is located on José Abascal, 45 and has a surface area of 5,300 sqm. In this case, the consideration paid was €35 million.

The group has also purchased land in the 22@ district in Barcelona from the British fund Benson Elliott for more than €40 million. Colonial plans to construct a 17-storey office building with a surface area of 24,000 sqm on this land, which has not started to be marketed yet. The total investment of this project is budgeted to amount to €77 million.

The CEO of Colonial, Pere Viñolas, said yesterday that with this operation, the group will incorporate a surface area of 80,000 sqm and will be “20% larger than it is today”. The company expects that its revenues from rental income will also increase by 20% as a result.

Colonial’s indebtedness will increase by €111 million to €1,300 million. The Group’s consolidated debt, including SFL, amounts to €3,000 million and the company’s indebtedness ratio over asset value will amount to 41%.

Its market capitalisation increased by 1.5% yesterday to €0.677 per share.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Northwood Puts Diagonal Mar Shopping Centre Up For Sale For €500M

9 May 2016 – Expansión

The US investment firm Northwood has put the Diagonal Mar shopping centre in Barcelona up for sale, for an estimated price of €500 million, according to sources close to the deal.

CBRE, the agency responsible for the management and leasing of the shopping centre since it was opened in 2001, has been appointed to manage the sale. Sources at the real estate consultancy declined to make any comment. The investment firm bought the shopping centre in May 2014 from a group of investors represented by Avestus Capital Partners, however that retained the asset management of the property.

Diagonal Mar – one of the largest shopping centres in Cataluña – covers a surface area of almost 88,000 sqm, including 27,100 sqm owned by Alcampo.

Opened in November 2001, the centre was designed by Jean-Louis Solal and the architect Robert A.M. Stern. Diagonal Mar is located in a prime position, situated approximately five kilometres to the north west of the city centre, in the 22@ district.

This centre has more than 200 stores dedicated to fashion, restaurants, leisure, a bowling alley and other services, as well as 4,800 parking spaces, provided free of charge for three hours.

Moreover, the shopping centre has an open air leisure and restaurant area, “La Terrassa del Mar”, which is open to customers, neighbours, employees from the office towers and tourists from nearby hotels in the area.

More than 3,000 jobs

Diagonal Mar received 16.7 million visitors last year, which represented an increase of 2.3% with respect to the previous year, and resulted in a 9% increase in sales during the period.

The centre owned by Northwood employs more than 3,000 people. The centre’s current tenants include Media Markt, Fnac, Primark, Zara, H&M and Cinesa, amongst others.
In addition, brands such as Revlon, Napapijri and the toy store Drim have opened shops in the centre within the last year.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

A UBS Fund Buys The ‘Cornerstone’ Office Complex For €80M

22 July 2015 – Expansión

A fund managed by the Swiss group UBS has purchased the Cornerstone office complex, in the 22@ district of Barcelona, for €80 million. The asset was previously owned by the British fund Benson Elliot.

The building was developed by Benson Elliot and its construction was completed in 2013. A year and a half after opening, it has an occupancy rate of 70% and its tenants include ADP and Henkel. The transaction was advised by Cushman & Wakefield.

The office complex has a total surface area of 20,700 m2 and is located in the neighbourhood of Poblenou in Barcelona, known as the 22@ district, one of the new business areas in the city.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Standard Life Buys Revlon’s HQ In Barcelona For €30M

24 April 2015 – Expansión

The building was sold by the US bank Morgan Stanley

This is the third transaction involving a property in the World Trade Center Almeda Park (Barcelona) in less than a year. The Scottish fund Standard Life has purchased Revlon’s headquarters for almost €30 million. The building was sold by the US bank Morgan Stanley and the deal was advised by Cushman & Wakefield, who did not want to make any comments.

The acquisition closed by Standard Life comes after the Socimi Merlin Properties purchased two other buildings in this office complex last year. In August 2014, Merlin acquired the building leased (in its entirety) to AXA for €47 million. In January, it purchased another office block, which houses various tenants, for €37 million. In both cases, the buildings were sold by the Swiss bank UBS and the deals were advised by Cushman & Wakefield.

The property acquired by Standard Life has a surface area of 10,300 square metres and is mainly occupied by Revlon, but also has other tenants. It was built as a turnkey project for the Colomer Group, which used to be the distributor of Revlon’s line of professional products, and which was acquired by the US group in 2013.

This is not Standard Life’s first investment in Barcelona. In 2011, it acquired a plot of land in the 22@ district for €28 million where it constructed the 250-room Hotel Travelodge de Poblenou. It also used to own two buildings on Gran Vía de Barcelona, although it sold one of those, the one leased to the Catalan Institute of Finance (Instituto Catalán de Finanzas or ICF) to the Generalitat in 2008 for €30 million. This building formed part of a package of assets through which Standard Life entered the Spanish market in the middle of 2007 and which also included buildings located on Paseo de la Castellana, number 55 and Calle Serrano, number 73, both in Madrid.

Original story: Expansión (by Marisa Ángles)

Translation: Carmel Drake