Tag: Aguirre Newman

Madrid´s Skyscrapers Rents Reduced by 40% Due to the Crisis

The economical crisis hit with great power the prime rents of the financial heart of Madrid. The offices situated in skyscrapers can pay now 40% less than they did at the splendid times before the real estate bubble outburst.

The office zones considered the most exclusive in the capital lowered their prices from €42/m2 to €24.5/m2. The discount is even greater moving outwards the zone, points out  Ángel Estebaranz, the director of Officeline Business of Aguirre Newman.

Behind the M-40 highway, where the rental prices have fallen by about 20% more, the unemployment rate is equal to 19%, comparing to the prime zone where the rate oscilates around 10%, 4-5% if the Cuatro Torres Business Center exluded. (…)

Even so, the rental of the offices could close the year at 400.000 m2, which equals to 35 % more than in 2012 and 58% less than it was in 2007.

According to  Patricio Palomar from Research & Investment of CBRE, among the renting transaction of the year there is Vodafone with 50.682,8 m2 (…).

Also, Cepsa has rented the tower designed by Norman Foster to Bankia in the moment of acquisition of Caja Madrid, with a view to convert it into its premises (59.357 m2).

One of the most notable operations in the fiscal year were the ones of Iberia and Agencia EFE, which moved to more spacious offices.

There are not many office spaces of more than  10.000 m2 free left on rent (…).

Some companies returned to the city center attracted by the lower prices, an opportunity that Spain gives to the international investors, interested in acquiring office buildings rented to prime operators.

In 2004, the commercialization of the four great Madrid skyscrapers forming the business park known as Cuatro Torres Business Area (CTBA) was to coincide with the real estate market collapse in Spain.

Eight years later, the Crystal Tower (Torre de Cristal) is occupied in less than 30% . The Tower hosts such companies as: Adeslas, Seat, Affirma, Coca-Cola Iberian Partners, Olswang, Havas, Agbar, Thyssen Krupp, Banco do Brasil and, since January, Volkswagen Audi España.

The PwC Tower and Picasso Tower are fully occupied, while 85% of the Torre Epacio space is taken by offices of Villar Mir Group, British American Tobacco, Ubi bank and the embassies of the UK, Australia and the Netherlands. There is about 10% of spare space in the Realia and Europa Towers while in Titania Tower there are 18.000 m2 available. (…)

 

Source: Cinco Días

TPG and Baech Buy Two Buildings in Madrid for 23.6 Million Euros

The Community of Madrid´s regional Government organized an auction of six buildings occupied by the administration in November. The aim was to gain at least 78 millions. Finally, the bidding organized by Addmeet managed to sell only two units, located in the Gran Vía Street, number 3 and 18. In spite of that, it has excelled the initial price by 27.4% and by 18.98%, respectively.

Gran Vía 18 was adquired by an American fund TPG for 18.6 million Euros (…). A Spanish family office Baech Bienes purchased Gran Vía 3 for 8.06 millions, while the initial price was 6.3 million Euros. Both buyers were assisted by Aguirre Newman.

 

Source: Expansión

Housing prices should fall an additional 25%

The managing director of Business of Aguirre Newman, Ángel Serrano, believes that the housing prices in Spain should fall an additional 20% or 25% in order to adjust to the buying capacity of the demand and points out that this percentage could be even higher if the “wage shock” suffered by workers continues.

In an interview to Europa Press, Serrano explains that the equilibrium between the price offered and the buying capacity of the demand lies at an effort of 4 and 4,5 times the gross salary for the acquisition of a home, a proportion that currently lies at 5,7 times.

The adjustment will take place either through a descent in prices of more than 20% or through an increase in salaries, something which is not foreseeable in the current context of salary moderation.

Serrano also reminds that the market not only needs to “buffer” the weakness of the demand, which still suffers the lack of employment or of credit, among other factors, but also the disappearance in January 2013 of the tax benefit for the acquisition of a principal residence and the increase of the VAT from 4% to 10% for new homes. “All or a part of the descent of prices during the crisis has been absorbed by the end of these advantages”, he adds.

Serrano declares that it will take around 18 months before the offer and the demand meet, that is, around 2015. To go any further would be “a juggling exercise”.

He assures that the first half of the year has shown figures that “provide some optimism”, although this has not reflected on the prices in the residential sector.

As explained, the real estate sector also includes the tertiary sector, which is not given the same importance as the residential one due to its smaller volume. This segment “suffered the crisis much later than the residential one and will be out of the crisis much earlier as well”, Serrano points out.

The contracting in the tertiary segment, measured in square meters, has increased in 40% in the first half of the year, while the adjustment in the rentals has softened in these months, with a descent of 2,6%.

Serrano reminds that the residential sector is made of several “micromarkets”, several of whom have already the adjustment process and are starting to see an increase in purchases.

For this reason, he considers that “the pace of purchases will improve” in the next few months, when Sareb is also starting to get rid of its assets, as with the “operation Bull”, where it has awarded nearly 1000 properties.

However, Serrano considers that the pending issue is the international demand. “I think we need to export the commercialization of properties”, he assures, indicating that consulting firms such as Aguirre Newman have a lot to say thanks to their knowledge and experience.