Tag: Adif

ECI Prepares To Sell Its 2 Stores In Parquesur (Madrid)

13 July 2017 – Voz Pópuli

El Corte Inglés is preparing to sell its stores in the Parquesur shopping centre, in Leganés (Madrid), according to financial sources consulted by this newspaper, under the framework of its asset sale policy to reduce debt. The group chaired by Dimas Gimeno occupies two spaces in Parquesur – which is owned by Unibail Rodamco – one for fashion and accessories, and the other for sports and leisure goods and the supermarket. El Corte Inglés assured this newspaper that no operations are currently active and that, in any case, it has remained as the tenant of other real estate assets despite divesting them.

According to real estate sources, the retail leader in Spain plans to sell various assets worth up to €150 million. Its portfolio of assets for sale includes not only the stores in Parquesur, but also others located in Burgos, Valencia and Madrid.

Leading this process is a stalwart of the Spanish company, Carlos Muñóz Gordobil, whom the sources consulted define as “a tough nut” and “old school operator”. The real estate sources argue that the prices that El Corte Inglés is asking for these buildings, which it considers to be non-essential, are too high.

The same sources indicate that El Corte Inglés’ real estate business is still weighed down by the purchase it agreed in 2014 to buy a plot on Paseo de la Castellana, adjacent to the centre that the group has in the area, which Adif sold through an auction. According to these sources, who are experts in the real estate sector, the figure paid by El Corte Inglés, €136 million, was “over the top”, as it exceeded the second highest offer submitted by more than €40 million. According to El Corte Inglés, the purpose of that purchase was to create its largest shopping centre in Spain, exceeding the one located in El Bercial (Getafe), which has a surface area of 180,000 m2.

In 2015, El Corte Inglés recorded profits of €158.13 million, up by 33.9% compared to the previous year and its turnover grew by 4.3%, to reach €15,219.84 million. Although the company has improved its revenues and has significantly decreased its debt, it still has to make some changes to facilitate negotiations with its creditor banks and secure better financing conditions, explained the financial sources consulted.

Four years ago, the retail group held debt amounting to €5,000 million, which put its business model in danger, and which essentially force it into a restructuring process in 2013. The sale of 10% of its capital to a sheik in Qatar, agreed in 2015, for €1,000 million; the sale of 51% of its financing arm to Santander in 2013; and the issue of promissory notes amounting to €300 million at the end of 2015, and of bonds through Hipercor, are just some of the measures taken by El Corte Inglés to reduce its debt to below €4,000 million.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Foro Consultores: Land Prices Soar In Certain Pockets Of Madrid

13 February 2017 – El Confidencial

Land prices are soaring, house prices are rising, the buying frenzy is gaining momentum in some areas and in certain developments…Is history repeating itself? Are we witnessing the gestation of a new real estate bubble, albeit not on a national scale, but nevertheless in certain areas of the country. That is what seems to be happening in some neighbourhoods of Madrid. But, the answer, for the time being at least, seems unanimous: not yet.

Buildable land, in other words, land that is ready to be built upon, is running out and, across Spain, there is barely enough land left upon which to construct the 1.5 million homes estimated to be required to supply the market for the next 8.6 years. In Madrid, the land will run out in just over 6 years, according to the latest report from the appraisal company Tinsa. It identifies a worrying shortage of this type of land in areas of expansion to the north of Madrid, as well as in certain specific points of the metropolitan area, such as Pozuelo, Villanueva de la Cañada, Coslada and Rivas. In some of these areas, according to warnings from Tinsa, there will be no buildable land left within 12-24 months. This situation has, unsurprisingly, led to sharp increases in land prices in certain areas. And these rises are concerning the sector. Where are these first warning signs starting to sound?

Valdebebas

The large real estate development in the north of Madrid, which was launched at the height of the crisis and which has fallen victim to numerous legal setbacks, has become, in the eyes of the residential sector, a clear example of the extent to which land can become a very sought-after, as well as a very dangerous, asset.

“Without doubt, it is one of the areas where land prices have grown significantly. In 2014, they ranged between €750/m2 and €900/m2, whereas nowadays operations are being closed for more than €1,200/m2 and €1,300/m2, and the perception in the market is that land can no longer be sold for less than €1,400/m2”, explained Vicente Quintanilla, Director of the department for Investment and Land at Foro Consultores. According to this expert, “this trend generates significant tension in terms of the prices of new builds, which are being sold for €3,000/m2 in certain developments”. (…).

Pozuelo, Aravaca…

Another market where prices have also risen significantly is the municipality of Pozuelo de Alarcón, where Sareb sold land for around €1,000/m2. (…).

Indeed, the supply of land in Pozuelo has completely run out and families in need of homes are heading to other markets, such as in Boadilla del Monte, a cheaper alternative. According to data from Foro Consultores, the gap in prices is very significant. “To give you an idea, a family home or chalet in Boadilla costs around €450,000 on average, compared with between €700,000 and €1 million in Pozuelo.

Scarce and sought-after plots of land have also seen sharp price increases in recent years. “In El Camino de Barrial, in Aravaca, land prices have risen from €1,200/m2 in 2014 to around €2,000/m2 now. (….).

Boadilla del Monte, at boiling point

Boadilla del Monte is another one of the markets that has experienced a huge boom over the last two years. And there, it has not been due to the scarcity of land, but rather because of the strong demand from families who, as described above, cannot find homes in Pozuelo de Alarcón.

“For family home plots, land prices have increased from €400-500/m2 in 2014 to €800-900/m2 in2016, say Foro Consultores. (…).

Euphoria in Méndez Álvaro and rises in El Cañaveral

In the heart of the capital, where land is noteworthy due to its absence, land prices have increased considerably. In 2014, buyers paid €1,000/m2 and in a recent operation, whereby Adif and Renfe sold a plot to Vía Célere, the price paid amounted to around €1,900/m2. (…).

This increase in land prices is not exclusive to the area to the north of Madrid (…). The price of more affordable land and cheaper homes has also risen significantly in recent months.

Such is the case of El Cañaveral, in the east of Madrid, where “last summer, land prices amounted to around €360-370/m2 and now plots are going for €450-500/m2” (…).

Finally, all of the experts lament the fact that during the crisis, no agreement was reached to manage land, which has resulted in this significant shortage and in the inevitable increase in prices. They advocate greater agility in terms of urban planning, especially where the shortage is leading to a bottleneck in the market.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Carmena & DCN Revive Operación Chamartín

6 February 2017 – El Confidencial

After a year and a half of misunderstandings, the Town Hall of Madrid and Distrito Castellana Norte (DCN), the property developer behind Operación Chamartín, have managed to see eye to eye. And in this vein, the two parties are now working to finalise an agreement that should allow the plans to be unblocked this year.

According to several sources familiar with the talks, the Town Hall led by Manuela Carmena, the Ministry of Development and the shareholders of DCN (BBVA and San José) are convinced that the long-awaited plan to develop the area in the north of the capital will have received all of their blessings by the end of this year.

The intermediary role played by the new Minister for Development, Íñigo de la Serna, has reportedly been key in arriving at this point. Since taking office last November, his priority has been to unblock this project, which is crucial for Adif (…), which owns the majority of the land on which Operación Chamartín will be developed.

In fact, one of the first points of the agreement has been to restore the project’s initial dimensions, in other words, the land covering more than 3.1 million m2 upon which DCN had planned to construct 16,000 homes and which the Town Hall of Madrid cut in half with its proposal for Puerta Norte. (…).

The second major agreement involves maintaining the average buildability ratio of 1.05, which will be achieved by concentrating the tallest buildings in one area: the main financial district. This will allow the heights of the buildings in other areas to be reduced, such as in the residential areas. It also means that there will be hardly any buildings in the northern most area of the plot, on the land bordering the neighbourhood of Fuencarral, where large green areas are planned.

First agreement and next steps

The next meeting will be held (…) on 16 February to firm up the broad outline of the agreement. Once this meeting has been held, the Town Hall believes that it will be able to draw the sketches for Operación Chamartín, or, at least, complete them after one more meeting.

Nevertheless, it is important to remember that this will be a preliminary agreement and all of the parties will have to negotiate further to determine the details (…).

If the conversations progress as planned, they may give rise to a set of revised plans by the middle of the year. From that moment on, the whole administrative process will come into play: and in order to accelerate it, the idea is to conduct it through a series of modifications to the Partial Plan and General Town Planning Plan, which means that all of the blessings should have been given by the end of 2017 or beginning of 2018.

The councillor for Sustainable Urban Development, José Manuel Calvo, said that concentrating the development’s tertiary activity (offices, hotels and retail) between Chamartín station and the M-30 will still form a fundamental part of the plan. That is where a major business centre will be constructed, which will be connected to the Cuatro Torres complex – an idea that was included in Calvo’s proposal for Madrid Puerta Norte. (…).

Meanwhile, BBVA and San José maintained that construction work will begin on the plots of land that are closest to Chamartín station, given that the development of that whole area will take two decades and will be completed in various phases (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

ECI Sells Shopping Centre To Monthisa RE For €150M

10 October 2016 – Real Estate Press

El Corte Inglés has sold a shopping centre located on Paseo de la Castellana, 83-85 in Madrid to Monthisa Real Estate for €150 million and a return of just under 4%. Monthisa Real Estate has been advised by the international real estate consulancy Inmored.

The operation has been structured as a sale & leaseback, whereby El Corte Inglés will remain as the tenant for at least ten years. Currently, El Corte Inglés occupies this centre, which also houses a Bricor store, a branch of ECI’s travel agency and a veterinary hospital, open 24-hours a day.

The acquired space has a surface area of 17,500 sqm, which is divided into three above ground floors and three basement floors. The shopping centre is located on the ground, first, second and first basement floors. The second basement floor houses the car park and the technical services are located on the third basement floor. Both Monthisa Real Estate and Inmored declined to comment on the operation.

The Azca area is undergoing a transformation at the moment and investors are focusing on it. El Corte Inglés plans to build a shopping arcade for luxury brands on the plot of land it acquired from Adif two years ago, located between Paseo de la Castellana and its Nuevos Ministerios shopping centre. Meanwhile, Zara is going to open a new flagship store at number 76 Paseo de la Castellana on the premises that used to be occupied by Habitat and Fnac. And, the ground floor of the former headquarters of BBVA, owned by GMP, is currently being refurbished to house two other commercial premises.

The real estate consultancy Inmored, which was launched in 1995 and which is a member of The International Retail Network with offices in Europe and the USA, recently advised Inditex on the rental of an entire building on Calle Preciados, 9 in Madrid.

Original story: Real Estate Press

Translation: Carmel Drake

BBVA Gets Ready To Reactivate ‘Operación Chamartín’

14 September 2016 – Expansión

Antonio Béjar, the Chairman of Distrito Castellana Norte, the company owned by BBVA and Sanjosé, has criticised Manuela Carmena’s team for “turning their backs on locals” and not thinking about Madrilenians.

Operación Chamartín reached a deadlock in May, when the Town Hall of Madrid, with votes from Ahora Madrid and PSOE, decided to deal a blow to Distrito Castellana Norte’s project and present an alternative option, which is unlikely to prosper, as it faces the outright refusal of the Community of Madrid and the Ministry of Development.

One of the biggest victims in this lethargy is DCN, which has seen how a project that had been fallow for decades and that seemed to be on the verge of progressing, following the approval of the final general town plan (PGOU) and the apparent acceptance of the parties involved, is now in danger of becoming little more than ink and paper following the arrival of Manuela Carmena’s municipal government.

Despite the circumstances, the Chairman of DCN, Antonio Béjar (pictured above), said in an interview with Expansión, that he feels “more encouraged than ever”. “This is an initiative that affects 500,000 people (i.e. the citizens who live in and around the affected areas). “We have always thought that it would be impossible to undertake this project behind people’s backs. For this reason, right from the start, we employed means and made efforts to get people to participate and contribute ideas”, explained Béjar.

The Director also explained that, in the face of the flood of suggestions and information requests received, they decided to open an office in Fuencarral a few months ago, and they plan to open at least two more – in Las Tablas and Chamartín – with the aim of maintaining an “open and permanent dialogue with people”. Béjar hopes that the municipal Government will reconsider its decision given the response from locals. “The Town Hall’s blockade against our project is very unpopular”, he said.

Similarly, the Chairman of DCN hopes to be able to resume talks with the Town hall and the other bodies involved to remedy the situation and whereby share the property developers “negotiating spirit”. Nevertheless, he warns that red lines exist, which are not going to be ignored. “We are not willing to be the sponsor of a project that lacks ambition or is associated with low quality. Moreover, we represent investors that have a duty to not, cannot and will not invest in projects that do not have appropriate returns”.

For the Director, the plan proposed by the Town Hall is a “very poor initiative”. “The administrations do not have the resources necessary to cover works that require billions of euros. They propose that the public sector bears the business risk, either through taxes or other items of social spending and they force citizens to pretend that they are entrepreneurs”.

Béjar fears that the unmovable attitude of the Town Hall will continue, at least until a new national Government is formed. “Political priorities should not take precedence over technical matters. We have not even been allowed to negotiate with the Town Hall”.

In the same way, he points out that the concession of land from Adif expires on 31 December and that the option to extend the period “is not currently on the table”. “We cannot keep investing forever without any signs of returns”, he noted.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

ECI Puts Logistics Assets Worth c.€300M Up For Sale

10 August 2016 – Expansión

The distribution giant El Corte Inglés has engaged Morgan Stanley to find investors who may be interested in acquiring assets worth between €200 million and €300 million, according to real estate sources.

Specifically, the company chaired by Dimas Gimeno intends to divest 33 assets, which have a surface area spanning more than 500,000 sqm, as well as five plots of land.

The assets on the market include rental contracts guaranteed for five, ten, fifteen and twenty years; and the deadline for submitting non-binding offers will close at the end of September.

Sources consulted indicate that some of the warehouses included in the sale are not sufficiently tall enough to meet with current demands from investors for this type of asset, which has forced them to adjust the duration of their contracts, as well as the rental prices.

The batch for sale, which comprises 38 assets in total, including the plots of land, contains: El Corte Inglés’ logistics centres in Bisbal del Penedès (Tarragona) and on La Peluquera industrial estate in Madrid. It also includes other assets on Las Atalayas industrial estate (in Alicante) and the Goro en Telde estate (in Gran Canaria).

By contrast, El Corte Inglés has not included any assets currently considered to be strategic in the batch. Thus, for example, the jewel in its logistics assets crown will not be included: its mega centre in the south of Madrid.

Reduce debt

The company, which seeks to reduce its debt balance with these divestment operations, may consider selling other types of non-strategic real estate assets in the future, as Expansión revealed in March.

These real estate asset divestments follow others completed by El Corte Inglés in recent years. In this way, in the summer of 2013, the distribution group completed the sale of a building next to Plaza de Cataluña in Barcelona to the fund manager IBA Capital.

Months later, it sold another property to the same investor on Calle Preciados in Madrid.

Other divestments

Last December, the chain sold another building in the iconic Puerta del Sol in Madrid for €65 million to the US fund Thor Equities. At the time, the group agreed to continue to occupy the building, which houses its book store and is located in one of the most important shopping areas of the capital, for another year.

Similarly, in February, the group sold the building that it had acquired ten years ago on Calle Fontanella in Barcelona for €17 million to a Russian investor, which plans to convert the property into a hotel.

By contrast, El Corte Inglés has also completed several important asset purchases in recent years. In this way, the company acquired a plot of land from the railway infrastructure manager Adif, right on Paseo de la Castellana for €136 million in 2014. This plot of land is located next to one of the company’s main shopping centres in the capital, in Nuevos Ministerios.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Cifuentes Files Appeal Against Suspension Of Operación Chamartín

3 August 2016 – Expansión

The Community of Madrid has submitted an administrative appeal against the decision taken by the Town Hall of Madrid on 25 May to cancel Operación Chamartín and replace it with its own project, Madrid Puerta Norte. The Community of Madrid considers that that decision was “arbitrary” and that it will damage the economy of the city.

The President of the Community of Madrid, Cristina Cifuences, has indicated that the appeal “has been presented on the understanding that the decision will result in a financial loss for all Madrilenians”. And she added that the Government that she leads “wants to protect the interests of Madrilenians against the withdrawal of the project” given that, in her opinion “it has not been agreed by any of the administrations involved” and “cuts the number of (planned) infrastructures and jobs in half”.

Cifuentes explained that, although Adif and the company promoting the project (DCN) have also submitted their own appeals, they are different legal initiatives, motivated by different interests.

Autonomy

Moreover, Cifuentes denied that her appeal is an “attack on the autonomy” of the Town Hall and assured that it will not harm the relationship between Manuela Carmena’s team and the Community of Madrid. “It is not a matter of confrontation between the administrations”, said Cifuentes, who noted that, during the last year, 17 agreements have been signed between the Community of Madrid and the Town Hall of Madrid, which represent “indisputable proof of our good will” in our on-going search to benefit all citizens.

Original story: Expansión (by Esther Martín)

Translation: Carmel Drake

Operación Chamartín: Carmena Cuts Number Of Homes By 75%

11 May 2016 – Cinco Días

Manuela Carmena, the mayoress of Madrid, has made her proposal for Operación Chamartín. Almost 25 years after the first plans were outlined, the team from Ahora Madrid revealed its plan on Tuesday, in an “open document”, according to the councillor, although the details have not been agreed or discussed with the site’s property developer, Distrito Castellana Norte (DCN), or with the other authorities involved. The Town Hall thinks that it should take charge of the city’s plans and so has presented this document to serve as a basis for negotiations.

The Town Hall has drastically reduced the number of homes in its plan, called Madrid Puerta Norte. From the 17,000 homes planned by the current developer, the Town Hall projects 4,600 homes (of which 1,000 will be social housing), representing a reduction of 75%. It also decreases the planned space allocated to tertiary use, by 15%, to 1.1 million sqm.

One of the points that will cause controversy, the buildability rate, is maintained at 1.05 m2, but that is because its calculation excludes all railway and road land, which means that the number of homes resuting from the calculation is significantly lower. Even so, sources in the sector say that the regional regulations approved in 2002 require the calculation of this ratio to include the railway land.

Carmena also proposes a business hub around Chamartín train station, whose profits would be used to finance the remodelling of the infrastructure for the Metro, roads and the station itself.

The last attempt to obtain approval for this urban development was undertaken last year, when the team led by Ana Botella (PP) approved the partial plan presented by the developer DCN (controlled by BBVA (75%) and Grupo San José (25%)) although it never received the green light from the Town Hall authorities.

DCN owns the rights to 61.6% of the land belonging to Adif, thanks to a contest won by the developer in 1993, organised by the Socialist Government of Felipe González. The agreement with the railway administrator, for which it would receive up to €1,300 million, is due to terminate on 31 December 2016.

“I would like us to see this as a starting point, for achieving synergies, rather than as a finished document” said Carmena, who will send the proposal to the Ministry of Development, the Community of Madrid and the development company. “We cannot evaluate the project because we do not know anything about it”, said a spokesperson from DCN. Now it is time to see whether there are enough points for negotiation.

For this reason, the Town Hall has reduced the weight of the infrastructures. It has decreased the proposed number of Metro stations from three to one, excluded another planned Cercanías (local railway) station and diminished the slabs required to bury Chamartín’s tracks underground by 90%.

Carmena also proposes the construction of a business centre around Chamartín train station, which is owned by Adif, whose profits will be used to finance the North Junction, the Fuencarral Junction and the renovation of the station itself. In this context, two iconic 40-storey skyscrapers will be constructed for office use, along with other buildings containing between 20 and 40 floors.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

El Corte Inglés Sells Building In Sol To Thor For €65M

24 December 2015 – Expansión

The operation has been closed for almost €65 million and reflects ECI’s strategy to selectively divest real estate assets to reduce its debt.

El Corte Inglés is continuing with its policy to selectively sell its real estate assets to reduce its debt. The company led by Dimas Gimenos has sold one of its properties in the Puerta del Sol in Madrid to the US fund Thor Equities for almost €65 million, according to market sources.

The building, which houses a bookstore, is located in one of the most important retail areas in the capital (on the corner with Calle Preciados) and has a total surface area of 1,344 m2 spread over three floors. El Corte Inglés has agreed with the fund Thor that it will continue to occupy the building as the tenant for one more year.

The department store group has a large portfolio of properties, worth almost €15,800 million, according to appraisals performed by Tinsa in 2014. Two years ago, it begin its new policy to divest its non-strategic assets with the sale of a building located next to the Plaza de Cataluña to the fund IBA, which also acquired another property from ECI on Calle Preciados in Madrid a few months later.

But not all of its activity involves property sales. Last year, the company acquired a plot of land that Adif had put up for sale on the Paseo de la Castellana. The plan is to expand the shopping centre that the distribution group has in that area, which is the great jewel in its asset portfolio.

The fund Thor made its first investment in Spain in September, with the acquisition of a property, also in Puerta del Sol, worth €9.5 million, which was previously owned by Kutxabank. It has also purchased number 16 Calle Fuencarral. In all three operations, Thor has been advised by the real estate consultancy firm Knight Frank.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

25% Of Adif’s Retail Units Are Vacant

21 December 2015 – El Economista

In total, 307 retail units at Adif’s train stations in Spain are vacant. These establishments occupy a total surface area of 38,239 m2, which represents approximately 24.8% of the more than 154,000 m2 covered by all of the areas dedicated to restaurants, retail and leisure in the network of stations owned by the railway manager. In other words, almost a quarter of the retail space at train stations is currently empty.

During 2014, Adif recorded revenues of €569.5 million, of which €134.6 million related to rental income and services. Of that amount, €61.4 million was generated by the lease of buildings, shops and other properties and €71.8 million was generated by the use of fibre optics. Therefore, the contribution of rental income from retail stores, homes and plots represented around one tenth of total revenues. On the basis of the data about the uptake of retail units at Spanish train stations, that amount could increase significantly if the occupancy rates were improved.

The 307 available stores owned by Adif are spread across 75 train stations, according to the data from the body that sits under the Ministry of Development. The station in Albacete Los Llanos has the highest number of empty units, with 29 in total, covering a combined surface area of 3,953 m2. Meanwhile, the station in Córdoba has 12 stores available, with a surface area of 3,255 m2, whilst the station in Cáceres has 13 free units, covering 2,313 m2.

After Albacete, Córdoba and Cáceres, the stations with the most available space are Pontevedra and Madrid Chamartín, with 2,160 m2 (10 stores) and 1,996 m2 (5 stores), respectively. The station in the Spanish capital has various units available, where according to the website of the state-owned company, shops, a restaurant and car rental parking could be opened.

By contrast, in Madrid’s other major train station, Atocha, there is not a single square metre available for rent. At the other main train stations in Spain, Barcelona Sans has just one store available, measuring 48 m2, whilst Sevilla Santa Justa also has just one unit without a tenant, measuring 28 m2.

By contrast, at the high speed train station Valencia Joaquín Sorolla, there are seven units without a tenant, with a total surface area of 346 m2. There are six empty shops at Zaragoza Delicias, with a total surface area of 161 m2. And at María Zambrano in Málaga, one shop is available, along with two sites for ATMs.

Empty for several years

The majority of the retail spaces are available to rent immediately. Nevertheless, some of them have been empty for several years. In certain cases, that is because they need major renovations. Others will be available from early 2016, which is why Adif has now begun to market them.

The supply from the railway manager, which launched a plan two years ago to get rid of many of the homes and land under its ownership, includes units that may be used as shops, restaurants, cafeterias, kiosks, offices, bookshops, ATMs, parking and car rental. At certain train stations, Adif prohibits any new tenants from using properties to undertake activities already in operation at existing stores.

During 2015, the prices of the retail units at Adif’s train stations have ranged between €975/month, for stores measuring up to 8 m2, and €10,500/month, for stores measuring up to 30 m2. (…).

Original story: El Economista (by Javier Mesones)

Translation: Carmel Drake