Investment in “Last Mile” Logistics Platforms Takes Off  

14 October 2019 The boom in e-commerce is sparking a revolution in the logistics markets as industry players seek to increase the speed of deliveries. The ability to deliver goods quickly in cities such as Madrid and Barcelona is leading firms to acquire logistics platforms that are located close to city centres. Market watchers refer to the “last mile” – the final delivery of goods to the customer’s home. Thus, the industrial estates that surround Madrid and Barcelona are slowing being repurposed as logistics platforms. The most sought-after are less than 10 kilometres from the most central neighbourhoods.

In an example of the tendency, the Spanish real estate group Allegra recently finalised the sale of a logistics park in the Marconi industrial estate, to the south of Madrid in Villaverde. The logistics platform consists of two warehouses measuring 9,798 and 7,676 square meters, respectively. The US-fund Hines, one of the four most important real estate management companies in the world, acquired the asset for 22 million euros. It was Hines first investment in the logistics sector in Spain.

According to data from the real estate consultancy JLL, though the price of logistics assets in Barcelona are currently higher than in Madrid, €7/m2 on average, compared to €5.5 in the capital, Madrid is seen to have major potential. The allocation of such platforms soared from 185,000 square meters in the third quarter of 2018 to 290,000 m2 this year, an increase of 48%. JLL also estimates that developers are working on another half a million square meters of platforms in Madrid, compared to 182,000 square meters in Catalonia.

Original Story: ABC – Adrián Delgado

Adaptation/Translation: Richard D. K. Turner

Hines Invests in Two Last-Mile Logistics Assets in Villaverde

8 October 2019 Hines, the world’s fourth-largest real estate fund by volume of assets under management, has finalised its first acquisition in the logistics sector in Spain, as the growth of e-commerce continues to roil the market.

The US fund has acquired two last-mile logistics assets in Villaverde, on the outskirts of Madrid, from Allegra. Allegra hired Knight Frank to lead the sale of a portfolio consisting of two warehouses in Villaverde and a plot of land in San Fernando de Henares. Hines paid 20 million euros.

Both warehouses have a 10-year leasing contract with the logistics operator Ontime. The two units have a surface area of ​​9,798 and 7,676 square meters, respectively.

Original Story: El Confidencial – Ruth Ugalde / Elena Sanz

Adaptation/Translation: Richard D. K. Turner

Allegra Looks to Sell Logistics Platform Nearby Amazon and Madrid

29 June 2019

The real estate group, Allegra Holding, is looking to take advantage of the substantially increased interest in e-commerce and its effect on the logistics industry to sell the Postremo project. Postremo comprises two warehouses in Villaverde, on the outskirts of Madrid, and a plot of land located in front of a facility owned by Amazon in San Fernando de Henares, just 30 kilometres from central Madrid.

Allegra mandated Knight Frank to lead the sale, which could raise 30 million euros, providing a return of approximately 5% to any potential buyer. The assets include two warehouses, with a total surface area of roughly 17,000 m2, which the logistics firm On Time is currently leasing. The 16,430-m2 plot of land has an approved project to build a 10,265-square-meter warehouse

Original Story: El Confidencial – Ruth Ugalde

Losantos Invests €50M to Become the King of the Last Mile

12 November 2018 – Expansión

The real estate group, Allegra, chaired by Mario Losantos, has acquired several plots in recent months on the outskirts of Madrid to develop projects relating to the logistics sector and to increase its commitment to e-commerce in Spain. These operations will allow it to have a very active role in the business known as “the last mile”, the critical part of the distribution of products purchased online, which involves transporting them from the final warehouse to customers’ homes.

Before the summer, the group acquired a logistics park in the town of Villaverde, to the south of Madrid, which was leased to the group On Time Logistics last week. The plot, measuring 30,000 m2, contains a warehouse measuring 17,000 m2 and a cross-docking platform measuring 8,000 m2.

Moreover, the group has closed the purchase of two plots of land in the north of Madrid, very close to the facilities of Amazon, the largest online operator in the world. Both plots have a buildability of 40,000 m2 and have involved an investment of €30 million.

The three operations undertaken in Madrid will take the total investment figure to more than €50 million, once all of the platforms have been constructed. The Spanish group started to invest in logistics centres a while ago in the USA and the UK. In recent weeks, the group has purchased a new platform measuring 89,000 m2 in Hampton (Virginia) to continue with its international expansion. That park is leased to the urgent parcel operator Fedex. Sources close to the group indicate that over the coming weeks, the firm may acquire another platform in Chicago, which is also operated by Fedex.

In the United Kingdom, Allegra has recently purchased two platforms in the cities of Telford and Durham, bringing its investment in the British logistics sector in recent years to €30 million.

The Spanish company, whose portfolio of real estate assets amounts to around €1 billion, has invested €250 million in the logistics sector. The group also owns commercial premises and residential buildings in the United States, Australia, New Zealand and Portugal, amongst other countries.

Original story: Expansión (by Amparo Polo)

Translation: Carmel Drake

Spain’s Property Developers Accelerate Their Land Purchases

31 August 2017 – Expansión

Spain’s large real estate companies have launched ambitious investments plans with the aim of starting to build thousands of homes over the next few years, whereby benefitting from the upwards cycle that the housing market is currently enjoying.

The most active players include some of the new property developers led by investment funds such as Neinor Homes, Vía Célere and Aelca. These companies, the first of which is listed on the stock market and the latter two which have plans to make their stock market debuts within the next few months, have accelerated their land purchase plans in recent months, backed financially by their owner-shareholders and loans from the banks.

Such is the case of Neinor Homes. The property developer owned by Lone Star has invested €157.5 million so far in 2017 on the acquisition of various plots of land spread across locations such as Valencia, Málaga and Madrid. These purchases will allow it to build 1,750 homes, in addition to the around 4,000 units that it already has underway.

In the case of Vía Célere, acquired in February by Värde and five other funds, its land purchases so far in 2017 amount to €100 million, which has allowed it to increase its portfolio of land by 212,016 m2 to 2.7 million m2.

Another one of the companies that has invested a lot in land in recent months in Aelca. The company led by Värde and its founding partners, Javier Gómez and José Juan Martín, has spent €170 million so far in 2017 to increase its buildable portfolio by 362,000 m2. Following these purchases, it plans to build around 3,900 homes.

New leader

But the leader of this growth is Metrovacesa. The property developer led by Jorge Pérez de Leza has started a new phase this year, following the transfer of its rental assets to Merlin, with the ultimate aim of recovering its leading position in the sector, this time, focusing on the residential market. To this end, its main shareholders, Banco Santander and BBVA, have transferred it land worth €1,108 million, covering a buildable surface area of 3.1 million m2.

Metrovacesa’s plans for these plots, which have capacity for 24,000 homes, include the sale of some of the asset to competitors, which are eager to expand their portfolios. Currently, the property developer owned by Santander and BBVA is the second largest landowner in the country, with land spanning 6 million m2, exceeded only by Sareb.

Meanwhile, the ACR group (which has invested in some projects together with Allegra, the investment arm of Mario Losantos, the former owner of Riofisa) has purchased land worth €43 million, with a buildable surface area of 88,000 m2, where it plans to build 810 homes. (…).

Amenabar has a similar investment policy. The Basque real estate company, the current leader house building ranking in Spain, with more than 4,000 units underway, has acquired land covering more than 352,000 m2 this year, which will allow it to build another 2,976 homes. (…).

Another of the classic property developers, Quabit, has undertaken 13 operations involving buildable land in just two months, allowing it to incorporate almost 120,000 m2 into its portfolio. (…) The listed company will build 1,097 homes with a forecast revenue of €196 million.

Meanwhile, the Inbisa group has invested more than €80 million in the residential market over the last 18 months and plans to spend another €30 million before the end of the year.

Another fund that has made a significant commitment to the housing market in Spain in ASG. That firm, which also invests in commercial properties, has spent €200 million this year on the acquisition of 16 urban plots of land.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

ACR Emerges From The Crisis Thanks To RE Recovery

20 May 2016 – Expansión

After the slump of 2013 and 2014, the Spanish construction company ACR, which specialises in the construction and development of residential housing, has experienced significant growth thanks to the recovery of the real estate market in Spain. “The residential construction segment has clearly improved”, said Michel Elizalde (pictured above), the CEO of the company, which saw its turnover soar by 45% in 2016, to reach €130 million.

The fruits of 2015 (€100 million in new contracts) have contributed to increase the size of the portfolio to €125 million, of which only 10% comes from abroad. Spain, unlike the trend in other construction companies, has offset the irregular nature of the business overseas. ACR is withdrawing from France and is analysing Colombia very carefully, where it is starting to feel the lack of projects due to the difficult economic situation, driven by the unfavourable exchange rate versus the euro, the decrease in the price of oil and in fall in prices of raw materials. “Our international expansion is costing us more than we expected it would when we launched the initiative in 2011”, acknowledges Elizalde. ACR will continue to analyse opportunities in Colombia, but it will abandon the French market, due to the barriers to entry against foreign groups and the different culture there in terms of contracting suppliers.

ACR performs most of its work for third parties, and the remainder relates to developments in different cities, primarily, in Madrid and Barcelona. Currently, the group has around 1,900 homes under construction. According to ACR, the factor that has most contributed to the mobilisation of the Spanish residential market has been the entry of new investors, primarily investment funds, which require the support of groups with experience in construction to develop their projects. “In addition, there was pent-up demand, which is now flourishing, although we are still a long way off the production speeds of 100,000 homes per year”.

ACR, with a controlled debt of €26 million, expects its turnover to reach €140 million this year, on the basis of its performance during the first four months of the year. “We are evolving from a real estate construction firm into a project management partner”, said the CEO of ACR.

Elizalde gave the example of his firm’s agreement with the fund Allegra to develop two housing complexes in Madrid.

Original story: Expansión (by C.Morán)

Translation: Carmel Drake

New Houses Spring Up in Northern, South-Eastern Madrid

16/12/2014 – El Mundo

Construction in the capital seems to have regained the pulse lost during years of being halted and focused basically on new neighbourhood of Valdebebas. Thousands of dwellings have started to be raised in the last months in various areas of Madrid, proving the turning point for Spanish housing after the dark times of 2013 has come.

From January to November, 3.043 new building permits were granted to Madrid’s builders and architects, local City Hall’s data shows. These are not only numbers, though. They embody a wide spectrum of renewed and rich residential supply coming forward to meet unsatisfied apetitte for new real estate. What is more, the housing has little or nothing to do with the boom, none in terms of prices (pretty competitive), nor typology (quality and tailor-made), and not even the location (nice areas).

The boiling, long-awaited supply also comes from new players. Thus, traditional developers had to face up to the new realm and learn how to live in harmony with other residential market kings like the banks looking to add value to their repossessed land, and investment funds, which spotted a golden strike in this segment. Moreover, the cooperatives have increased their activity, betting on short- and mid-term development.

Awaiting the large-scale projects to start, such as the 50 Raimundo Fernandez Villaverde and the Cuatro Caminos Metro depots’ plot, cranes work round the clock on the building sites in other locations, like the Arroyo de Fresno and Valdebebas neighborhoods in the north of Madrid and in the Ensanche de Vallecas in the south-east. The three town-planning ventures represent the epicenter of the capital’s new construction, let alone the Sanchinarro, Las Tablas and Montecarmelo developments, also in the north.

Speaking of geographical distribution of the new permits, 701 of the total 3.043 granted (rehabilitations included) were for Villa de Vallecas, 698 for Fuencarral-El Pardo and 573 for Hortaleza areas, simply the most desirable districts.

However, not only does the property development flourish in new and large housing estates, but also in other places where more than a hundred of homes were built. Namely, there were 203 applications for permits in Tetuan, 201 in Moncloa-Aravaca, 157 in San Blas-Canillejas and 155 in Carabanchel neighborhoods.

On the other side, not even a single building permit was granted for Retiro, Chamberi, Puente de Vallecas, Moratalaz and Villaverde. Little available land or few buildings needing rehabilitations cripple new housing production in the first two, while the lingering stock, scares developers off the remaining three. In case of Puente de Vallecas, its closeness to Villa de Vallecas deprives it of the new home opportunities. Of the to-be-built supply, 2.474 are apartments and 569 single-family units (300 in Villa de Vallecas).

As experts point out, the cranes can be found in Puerta de Hierro (Fuencarral-El Pardo), El Barrial (Moncloa-Aravaca) and Las Rosas and Las Mercedes (San Blas-Canillejas). The two places mentioned at the beginning are unique and  supply in there is usually destined for solvent, demarcation-oriented public.

While giving his opinion on new housing types, Carlos Smerdou, CEO of Foro Consultores, said the catalog shares one common feature: tailor-made, and therefore reaching high pre-sales before a project starts. ‘The goal is to respond to a demand which has been waiting for determined products in specific areas for years’, the director explained.

Dario Fernandez, the Residential, Town Planning and Land department Head of JLL, sees eye to eye with Mr Smerdou. ‘Many factors concurred to the increase in new construction, such as dormant demand in matured areas witnessing supply shortages’, he said.  The expert praised the developments in the north, too. ‘Perhaps, these neighborhoods show a good response to more traditional/rational developing behavior, where considerable demand and little supply coincide’.

The exact parameters brought ACR and Allegra to constructing their October-launched Residencial Nature project nearby the Plaza de Castilla square (Tetuan district). ‘The quality, competitive price and meticulous design mark the standard for this and our future developments, to be located in active demand and restrained supply areas’, assured David Botin leading the Development Department at ACR.

Projects Settled on Cheap Land

Looking at results of the firms, it seems their strategy works flawlessly. ACR and Allegra sold 100% of the Residencial Nature in only few months. The closed complex has all types of common areas and 94 apartments at prices ranging from 115.000 and 275.000 euros. And the attractive prices could be set thanks to huge discounts on the land, reaching up to 80% in some parts of Madrid, as well as to limited building activity.

Via Celere‘s chairman, Juan Antonio Gomez-Pintado supports the modus operandi: ‘All the residential product started in 2014 was developed on basis of an exhaustive market study and on the plots where such a diverse product did not exist’. The developer ran property developements in Embajadores, Arcentales and Valdebebas this year, focusing on the best energy efficiency class (A) and special common areas.

In this context, Smerdou adds that the new housing industry walks towards normalization due to adjustment in prices, fundamentally. ‘Average discount in the developed areas of Madrid posts between 30% and 40% from the market’s peaks. Vallecas is an exception with 50%-off values, where banks trade REO land’, he claims.

According to the latest update by Sociedad de Tasacion, in June, a new square meter cost 2.669 euros on average, down 32.9% from June 2007 (3.978 euros). By the capital’s districts, prices fell the deepest in Chamartin (down 46.9%) and in Villaverde (42.1%).

When it comes to features of the new construction homes, Smerdou points out their sizes. ‘The new dwelling units are bigger than those built during the real estate bubble. We return to three-bedroom houses and one-bed and bedsit apartments are going out of fashion’, he remarked. ‘Properties for living are replacing investment units’.

General director at Grupo Ibosa, Juan Jose Perucho adds other indirect keys to their trading success: better expertise in the real estate invoking demand. ‘The fear did not disappear but the buyers seek information about the track and history of managers and developers’, he assured. Grupo Ibosa has set four cooperative property developments in Valdebebas running with almost 200 unsubsidized or partly-public homes inside estates called Auriga, Sagittae, Orion and Atenea.

‘Many believe the pricing cannot be lower so they started to buy homes for living instead of speculative investment’, Mr Perucho said.

 

Original story: El Mundo (by Jorge Salido Cobo)

Translation: AURA REE

Cranes Appear in the Skyline of Madrid’s Center

17/11/2014 – Expansion

Pryconsa, Ibosa, Domo, ACR and Allegra are only examples of the companies that started a new home construction in Madrid. On average, their projects include hundreds of dwellings which were immediately snapped up, in spite of the high level of stock pending sales. Currently, most new projects are proposed by cooperatives.

Managers like Ibosa or Domo have discovered a golden strike in the sales of the plots the Public Administration decided to auction off in search of liquidity. For instance, Metro has sealed a deal on its headquarters in the intersection of the Cavanilles and the Doctor Esquerro street, in the Retiro neighborhood, with Domo Gestores which will raise 209 apartments and 7 single-family homes at prices starting from €91.800 (VAT included). The dwellings will be ready in 2017.

The same co-op is at the same time building two housing developments: first, at a very advanced construction stage and formerly serving as the premises of the Town Planning department of the City Hall of Madrid. In this case, Domo will build 220 flats priced at €305.000 each in the middle of the Chamartin district.

The other development will stand on a downtown plot acquired recently by the co-op for €111 million. Located next to the Paseo de la Castellana street, the piece of land will soon see construction of 355 dwellings selling at 3.400 Euros per square meter each.

Another cooperative manager Ibosa was awarded the plot carrying the depots of Madrid’s subway and situated in the Cuatro Caminos area for €88 million. Thereon, Ibosa is going to build a high-end residential estate with 62 subsidized and 381 unsubsidized apartments, for €1.940 and €2.600 per square meter respectively.

The development, distributed over a 25-floor tower and three eight-storey buildings, is set to be delivered within few years as before starting the works, Ibosa shall underground the existing depots and create a green area of 20.000 square meters.

Apart from the cooperatives, two real estate firms significantly contribute to project reactivation in the heart of Madrid. For example, Pryconsa has just bought the old Buñuel studio of RTVE for €35 million.

Furthermore, Allegra Holding led by Mario Losantos has also acquired a plot of 6.000 square meters in Madrid, specifically in the Puerta de Hierro area, with intention of constructing a new luxury housing development, made up between 50 and 60 dwellings.

Months prior to this project, Allegra and its partner ACR, ran a venture close to the Plaza de Castilla square on the Sorolla street. Out of the 96 marketed homes, 85 have already found buyers ready to pay  2.200 €/m2.

Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE

Allegra Acquires a 6.000 SQM Plot in Madrid From Barclays

17/10/2014 – Expansion

Owned by the former owners of Riofisa, the Losantos family, Allegra Holding wants to challenge the habitual doubters who claim that it is impossible to sell dwellings in Spain right now. The company has just purchased a 6.000 square meter plot in the Puerta de Hierro area of Madrid, aiming at raising a new, high-end housing development.

The Losantos are planning to build between 55 and 60 apartments. The venture stands among very few which are presently initiated in the capital as during the recession many construction projects were halted.

Price

Allegra plans to sell high-quality dwellings at much lower prices than those found in the area. Before the crisis, a square meter in the northern area of Madrid was €4.500 when referring to existing homes. Allegra could barge in the Puerta de Hierro neighborhood asking between €3.000 and €3.500 for each square meter.

The plot is located on the Islas de Cabo Verde street, nearby the Puerta de Hierro club and the university area, adjacently to exclusive Los Robles housing development.

The real estate group could obtain a building permit in spring 2015 and the finished apartments could be traded at the end of 2016. Each unit will have 70 to 140 square meters, two garage spaces and a swimming pool included.

Barclays, the vendor, informed that the plot was repossessed and it was one of the assets the entity wanted to shed before it leaves Spain by transferring its local branch to La Caixa. The final amount has not been disclosed but it was paid in cash.

New Construction Project

The Puerta de Hierro housing development will surely cheer the Madrid market up. During the 2007 peaks, 45.900 new building permits were issued in the capital. In 2013, the number showed only 6.100 applications.

Allegra seems to bet firmly on the Spanish market, once it nearly crawled out from the financial crash. It undertook a strategy of low pricing in order to grow rapidly, brand and rotate its properties fast.

First housing development raised by the Losantos in Madrid (the billboard) was started few months ago close to the Plaza de Castilla square, on the Sorolla street. Out of the total of 96 apartments put up for sale, 85 have already found new owners, which proves quite good reception of the project. Prices hit the cap of €240.000 for a three-bedroom home (about 2.200 €/m2).

‘There are very, very few newly built properties in the center of Madrid at reasonable prices. They sell like hot cakes’, assures a developer with an excellent knowledge of the local market. The Sorolla development was constructed on a 3.200 square meter plot bought from Sareb.

Allegra could count on support of builder ACR both in the previous and the new project. The latter will have a 20% share in a joint venture vehicle set to be established to implement the future plans.

 

Original article: Expansión (by Amparo Polo)

Translation: AURA REE

Losantos Sells Two Properties in London For €120 Mn

11/07/2014 – Expansion

Mario Losantos, investor and the founder of Allegra Holding and the ex-owner of real estate manager Riofisa, has just sold two office buildings situated in London.

One of them, found in the Covent Garden area, was sold for 19 million pounds (23.8 million euros) to English Rose Estates last week, whereas the other called Seven Dials Warehouse is at the verge of becoming the property of CBRE Global Investors for 80 million pounds (100 million euros). To illustrate, Riofisa paid 60 million pounds (25 million euros) for the industrial complex from 1890. In total, capital gains of Losantos may amount to €40 million.

Over the past years, Allegra has invested €220 million in the London real estate. At the moment, the company owns three buildings in the English capital, two of them offices and one residential.

 

Original article: Expansión (by Amparo Polo)

Translation: AURA REE