Carmena Works With Property Owners To Design Madrid’s Office Supply

6 February 2017 – Cinco Días

The Town Hall of Madrid, led by Manuela Carmena, and large property owners and companies in the real estate sector, which are grouped together into the Spanish Office Association (AEO), have committed to creating a working group to define the future model for the office market in Spain’s capital.

Last week, José Manuel Calvo, Councillor for Sustainable Urban Development, held a meeting with most of the members of the AEO in which he appeared willing to create a working group to establish collaboration between the Administration and the private sector, according to a statement made on Wednesday by the Association.

The AEO includes large office owners such as BBVA, Mapfre, Mutua Madrilieña, Pontegadea (the family office owned by Amancio Ortega, the founder of Inditex), Repsol, Acciona and Telefónica, together with large real estate companies such as Merlin Properties, Colonial, GMP, La Finca, Torre Rioja and international funds such as GreenOak, Blackstone and Iba Capital Partners, amongst others.

Over the next few months, the Councillor will present a study “which will allow them to lay the foundations to create a working group between the sector and the other parties involved, with the aim of facilitating the design of a rational future model, which will strengthen and improve the supply of offices in Madrid”, said sources at the AEO in a statement.

Sources from the companies that attended the meeting highlighted the opportunity to hold conversations with the Town Hall’s Head of Town Planning. They also said that Calvo has committed to working together with the Community of Madrid and the Central Government, in a combined effort, to try to attract to Madrid some of the companies that are leaving London due to Brexit.

The politician also reminded the businessmen about the town planning matters that are still pending at the Town Hall. Amongst other items, he explained his efforts to unblock Operación Chamartín, promoted by Distrito Castellana Norte (controlled by BBVA) and his commitment to build a major office nucleus close to Chamartín station, once it has been refurbished.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Office Buildings Will Have A Rating On Their Quality

2 February 2016 – Cinco Días

The real estate sector gets ready for a big novelty. Similarly to the debt rating of companies and countries, the office buildings will have a rating to ensure constructive and technical quality to potential investors.

The seal is called Office buildings technical rating. It is driven by the Spanish Association Offices (AEO, in its Spanish acronym), where large landowners, intermediaries and investors are integrated, and it will be voluntary. Although in this entity they believe it will be imposed thanks to the driving companies and because it will become the only guarantee of reference for the real estate market.

The aim of the AEO is to provide all stakeholders an objective and only measure of the quality of buildings. This optional rating system will be approved in two months, as final details are currently being closed. “We are finishing a standard for the technical rating of office buildings, which will be voluntary and will serve to increase confidence and transparency in the Spanish market from the perspective of investment, rental or portfolio analysis” José María Álvarez, AEO Chairman explains.

The first consequence will be knowing the condition of the buildings. Given it is a voluntary act, it is likely that the newest and highest quality buildings will promptly submit to be eligible for this qualification. This organization states that there are 30 million square meters of office space in Spain, with a value of EUR 65,000 million in assets, which generate about 4,300 million in income from leases.

AEO partners

The AEO is composed of more than 60 companies. Among them, large listed companies as BBVA, Iberdrola, Indra, Repsol and Telefonica, which in turn are usually owners of major buildings where their headquarters are installed. Property management companies as Torre Rioja (Angel Soria), Colonial and Pontegadea – family office of Inditex founder Amancio Ortega, also participate.

Listed real estate investment companies as Merlin Properties (of Ibex 35) and Lar España are also partners, as well as intermediaries including JLL, Knight Frank, Savills, CBRE, Cushman & Wakefield or BNP Paribas Real Estate. Mutua Madrileña and Mapfre insurance companies are also members.

The objective of this real estate agents group is to give transparency to the sector. Thanks to this seal, an international fund or a company will know what they face when acquiring a property. There will even be investors that will be suspicious of the buildings which do not have the rating. “It will contribute to transparency in the decision-making process,” says Alvarez on how companies will welcome this rating system.

“It will contribute to transparency in decision making,” the AEO states.

With some final details to be confirmed, the rating will have five sections. Outstanding, for those excellent, will be A+ rating. From there, going down, ratings will be A, B+, B y C.

Appraisal criteria

This certificate will be awarded by AEO in order to have a character of neutrality, but different companies and engineering companies will be responsible for the technical work, opening a new market of professional services for rating companies. Once these consultants rate the offices, the association will review the report and confirm the rating. “The AEO will review and audit all assessments by carried out by external companies,” Alvarez confirms. In addition, the certification will be renewed after a given period to assess for deterioration. This revalidation will take place every three or four years, a term not defined yet.

The concepts considered for the report focus on the architecture and facilities of the buildings Evaluators will consider distribution plants and clearances, common areas, exterior envelope and energy facilities, climate system or control. The unique provisions, seniority and energy and sustainability certifications will also be taken into account. Neither location nor aesthetics will be considered.

This association is of the opinion that this audit will also be useful for an owner to know what works and measures they must take, in addition to how much it can cost in order to improve the rating of their property.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Aura Ree