Palm Logistics Develops a 115,000m2 Logistics Hub in Getafe (Madrid)

27 March 2019 – Press Release

Palm Logistics, the dedicated affiliate of Palm Capital, the pan-European real estate private equity specialist, is set to deliver a large logistics hub in Madrid, to meet the pent-up demand for modern logistics in the capital and respond to the rapid growth of e-commerce and supply chain rationalisation across Europe.

The site, covering more than 115,000 m2 across 10 grade-A logistics buildings, will provide the best ‘last mile delivery’ option to Madrid while being easily accessible to the rest of Spain and across Europe.

The first phase, due to complete this summer, comprises a 33,000m2 leasable area across two buildings with the ability to offer modules from 7,000m2 to 20,000m2.  The buildings will be certified LEED Silver, having been built to the highest quality standard with key sustainability considerations in mind.

Gavilanes is located close to main roads, the airport and the Abroñigal intermodal station with its large roads and roundabouts adapted to the traffic of heavy vehicles.  The site is already home to several first-class international companies including Amazon, Decathlon, Costco, Mercadona, and ID Logistics.

Original story: Press Release

Edited by: Carmel Drake

Funds, Socimis, El Corte Inglés & Seur Compete in the Urban Logistics Segment

9 March 2019 – Expansión

Investors and logistics operators alike are setting their sights on urban hubs to benefit from the boom in e-commerce. According to data from CBRE, investment in the logistics sector is thriving – it amounted to €2 billion in 2017, €1.5 billion in 2018 and is forecast to reach €1.2 billion in 2019. Active players in the sector include the Singapore sovereign fund through its Socimi P3, Blackstone, Prologis, Logicor, CBRE GI and Montepino, and Merlin, amongst others.

Urban hubs are gaining significant weight in the sector thanks to their ability to reduce transport costs, avoid the new traffic restrictions and resolve the problem of product returns.

According to the CNMC, Correos and Correos Express currently deliver 44% of all packages in Spain, followed by MRW and Seur (14% each) and DHL (4.5%).

In terms of retailers operating in this space, Amazon set the ball rolling by opening a logistics centre in the heart of the Eixample district of Barcelona and in the Méndez Álvaro area of Madrid. Other large retailers are following suit by opening distribution centres inside major cities, such as Decathlon, MediaMarkt, Ikea, Aki, Carrefour and Worten.

The investment firm Azora has also announced its intention to invest €250 million in logistics hubs in urban centres, which it will lease to delivery specialists such as Seur, DHL and MRW. Seur already has eleven urban logistics centres and plans to open another nine this year. Meanwhile, DHL already has ten such hubs and plans to open two more this year.

In the same vein, the department store giant El Corte Inglés has also launched an ambitious omnichannel logistics strategy, which will convert its 94 shopping centres into storage points for the management of online purchases.

Original story: Expansión (by I. de las Heras & R. Arroyo)

Translation/Summary: Carmel Drake

Catalan Occidente Merges its RE Subsidiaries to Cut Costs

7 March 2019 – Expansión

Catalana Occidente is looking to cut costs by merging some of its recent real estate purchases, without impacting the entity’s business model.

Last year, the insurance company acquired Chezsuccess, owner of the Luxa Business Park in Barcelona, home to the headquarters of Amazon and WeWork, for €90 million. That firm has subsequently been renamed GCO Activos Inmobiliarios.

Catalana Occidente also bought Legión Empresarial, owner of the WIP office building in Barcelona’s 22@ district, for €20 million.

Now it is merging its two subsidiaries, which means that all of the acquired assets will be grouped together in GCO Activos Inmobiliarios.

In total, the insurance group’s real estate assets were worth €1.4 billion at the end of 2018, accounting for 12% of its investment portfolio. Fixed income securities represented 59% (€6.6 billion) of the total and equities 11% (€1.3 billion).

Original story: Expansión (by E.d.P)

Translation: Carmel Drake

Amazon to Open its Largest Logistics Warehouse in Dos Hermanas

1 March 2019 – ABC Sevilla

Amazon is going to open its largest distribution centre in Spain in the Megapark business park in Dos Hermanas (Sevilla) to become the park’s first tenant. The new mega-warehouse will have a constructed surface area of around 190,000 m2 on a plot spanning 165,000 m2 and is expected to be operational from 2021.

The e-commerce giant has been searching for a suitable facility for months and has opted for Megapark in the end due to its excellent road network and proximity to the Port of Sevilla, where it will open a new logistics station.

The plot of land and the future warehouse will both be owned by the investment fund Goodman Real Estate Spain, with which Amazon is expected to sign a lease contract within the coming days.

One of the benefits of the location in Sevilla is the availability of the port, which means that Amazon will be able to offer a more comprehensive delivery service to the Canary Islands by boat.

The business park is located opposite the La Isla industrial estate, between the A-4 motorway towards Cádiz and the future SE-40 ring-road.

Original story: ABC Sevilla (by Elena Martos)

Summary/Translation: Carmel Drake

Unifersa Buys a 42,000m2 Industrial Plot in A Coruña

4 January 2019 – Eje Prime

Unifersa is expanding its warehouse. The Galician company, which is dedicated to the wholesale of industrial supplies and professional hardware, has acquired a plot of land measuring 42,000 m2 in A Coruña to expand its facilities.

The company will initially invest €10 million in the new site located in A Larancha, which will replace the headquarters that the firm has in Fene and which occupies 10,000 m2. The physical growth of the firm thus accompanies the development of the business, whose turnover exceeds €20 million.

If the forecasts from the consulting firm Savills Aguirre Newman are confirmed, the logistics market will have closed 2018 with an investment of €1.2 billion, 42% higher than the result for the previous year. That figure is accompanied by new demands from companies in the sector, which are looking for centres with a 100% logistics profile, as well as trying to find spaces with potential for return.

Nevertheless, the progression of the Spanish logistics sector has its response in e-commerce, which has boosted the sector to make 2018 one of its best years. E-commerce is the main factor responsible for the good performance of the business, which firms such as Airbus, Mercadona and Amazon have joined with new centres.

Original story: Eje Prime

Translation: Carmel Drake

CBRE: Real Estate in Sevilla Attracts Funding from Overseas Investors

15 December 2018 – ABC

The city of Sevilla and its metropolitan area are now on the international real estate map and proof of that is that the major overseas funds are putting up a lot of the capital being absorbed by the new commercial, hotel and logistics projects in the city, “whereby taking over from the real estate firms of yesteryear”. That is one of the conclusions of a report compiled by the consultancy firm CBRE, which highlights that the return on investment has been felt most intensely in the shopping centre sector.

“With almost 300,000 m2 of future supply planned, Sevilla is the province in Spain that will grow by almost the most over the next few years in terms of gross leasable area – exceeded only by Madrid”, it said. “This will be a key sector this year and next for the Sevillan real estate market”, said Rosa Madrid, Director of CBRE in Andalucía. The first newsworthy event was the entry into operation of Torre Sevilla, “an open and mixed shopping centre, with a hotel and offices, which we have not seen here before and which is regenerating the area”, she highlighted. The office market “has absorbed without great problems” the 18,000 m2 that Torre Sevilla brought to the market “whereby disproving those who predicted a new crisis in this segment”, she said.

Offices

In the office segment, the highest rents are achieved in the most modern buildings of Nervión (a district in Sevilla), with rents of around €12-13/m2/month. In this area, some exclusive office buildings that were left vacant following the departure of the Junta de Andalucía to Santa Justa were occupied within 18 months. In La Cartuja, office rents are somewhat lower, around €9-11/m2/month, according to the report.

But, “the turning point” in the shopping centre sector is going to be seen Sevilla with Project Lagoh, promoted by the Socimi Lar España in the Palmas Altas area, to the south of the capital, and currently under construction. “Finally, the new era of shopping centres is going to arrive in Sevilla. Until now, we have only had shopping centres from the 1990s and none from the 21st century, like Xanadú in Madrid or Puerto Venecia in Zaragoza”, said Rosa Madrid.

Hotel investment

The hotel market has been also reactivated as demonstrated by the major operations closed in recent years. “In addition to the modern Eurostars Torre Sevilla, since 2015, the flow of properties acquired to transform them into accommodation has been continuous”, she highlighted. The most noteworthy operations include the purchase by the French real estate company Bouygues of the former headquarters of Abengoa, to renovate it and transform it into a 5-star hotel, the purchase of Hotel Macarena and the acquisition of the Generali building in Plaza Nueva by the British fund Shaftesbury.

Logistics market

Demand for logistics warehouses has also been increasing, at the same time as the major e-commerce operators have increased their logistics network in the south of the peninsula, such as the case of Amazon and Inditex, which have opened platforms in Sevilla. “That sector is here to stay. And operators are not only looking for large spaces far away from the cities measuring between 30,000 m2 and 100,000 m2, they are also looking for small spaces inside the SE30 to serve the last-mile market and demand for immediate distribution”, explained the regional director of CBRE.

Student halls

Investors specialising in alternative sectors, such as student halls of residence, are also placing their focus on Sevilla, a city that is home to 16% of all of Spain’s university students (…).

Original story: ABC (by E. Freire)

Translation: Carmel Drake

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

Mountpark to Invest €30M in a Macro-Warehouse for XPO in Toledo

23 October 2018 – Eje Prime

A new macro-operation is on the cards for Plataforma Central Iberum. The logistics developer Mountpark is going to invest €30 million in the development of this enclave to the south of Madrid in an asset measuring 44,000 m2 for XPO Logistics. In turn, the logistics operator has already agreed to rent the space to a large fashion chain, according to explanations provided to Eje Prime by the Director General of Mountpark for Spain and Portugal, John Derweduwe.

This warehouse is being promoted under the turnkey model and it is scheduled for completion and opening in June 2019. The latest-generation asset is going to be located 35 km from Madrid, in the municipality of Illescas, in Toledo. The real estate consultancy Estrada&Partners has been responsible for advising this operation.

The future tenant of the warehouse of Mountpark and XPO, is going to be the Swedish fashion retailer H&M, which will use the platform for its e-commerce logistics. The boom in e-commerce is also the reason why other overseas giants have also set up shop in Plataforma Central Iberum, which has converted the park and its surrounding area into the new prime axis of the real estate logistics market in the centre of the country.

Mountpark is entering a platform where Amazon, Airbus, Michelin and Toyota, amongst others, are already present. Located on a plot spanning more than 3.5 million m2, Plataforma Central Iberum is also the largest eco-industrial park in Spain.

The platform that it is building for XPO will not be the only one that Mountpark is promoting in this park. The company owns a second plot measuring 89,000 m2 in Illescas for which it is currently finalising a rental agreement with a high-profile domestic retailer.

“This project is just the start of an ambitious future for Mountpark in Spain” highlighted Derweduwe. The director, formerly the Vice-President and Administrator of Prologis Spain between 2002 and 2006, is “heavily committed to the south of Madrid”, where he plans to constitute a “significant” land bank to be able to respond to “the new logistics needs of the 21st century”, added the executive.

Specialising in the construction of so-called XXL assets (those spanning a surface area of more than 40,000 m2), Mountpark already owns a 99,000 m2 plot in Alcalá de Henares and is working on another land bank spanning several million square metres.

Changing trend in Madrid

Regarding the arrival of giants such as Amazon to Illescas, Derweduwe points to the “saturation” of the Corredor de Henares thoroughfare, which is leading to a “change of trend” in which the province of Toledo is gaining a lot of notoriety due to its proximity to Madrid and because “being located in Castilla-La Mancha also has benefits for tenants”, said the executive.

As well as the central area, Mountpark is also looking “seriously” at Cataluña and Valencia (…).

The parent company of the Iberian subsidiary led by Derweduwe is Mountpark Logistics, a joint venture between Usaa Realco-Europe Holdcom, the Dutch subsidiary of Usaa Real Estate, and Mountpark Finco Sarl (Mountpark). The joint venture promotes large logistics buildings all over Europe, but with the focus primarily on the United Kingdom, Western Europe and Central Europe. Mountpark has a portfolio comprising 16 assets with the potential to offer logistics facilities spanning more than 1.85 million m2 in the continental market.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Gazeley Purchases a 75,000 m2 Industrial Plot in Toledo

19 October 2018 – Eje Prime

Gazeley has returned to the Spanish market. The logistics warehouse and distribution park investor and developer group has acquired a 75,000 m2 plot in the Toledo town of Illescas on which it will build a 36,000 m2 warehouse. The company is planning to complete the project in 2019.

Moreover, the company has opened new offices in Madrid. Oscar Heras, Construction Director at Gazeley, will assume the role of Director of the subsidiary Gazeley España, which, until now, has stayed away from Spanish real estate activity after selling all of its assets in the country in 2016.

Then, the company was going through a bad time: it had accumulated more than 1.5 million m2 in more than a dozen platforms. Moreover, that same year, the Spanish subsidiary recorded a net profit of more than €16 million, which it used to offset losses from previous years, exceeding €11 million.

Now they are back, because, according to Heras, “it is a time when there is more demand for logistics warehouses than ever”. The company’s intention is to continue growing in Spain.

In Europe, Gazeley has a portfolio of assets spanning 17 million m2, concentrated in the United Kingdom, Germany, France and the Netherlands and leased (96%) to clients such as Amazon, UPS and Volkswagen. The company forms part of the GLP group, which is listed on the Singapore stock market, with more than $50 billion in assets under management.

Original story: Eje Prime

Translation: Carmel Drake

Urban Hubs: The Future Pillars of the Last Mile are Seducing the Real Estate Sector

22 October 2018 – Eje Prime

Blackstone, Goldman Sachs, Prologis and Amazon have started to invest in urban hubs. The future pillars of e-commerce logistics are still in an embryonic phase, but the large real estate investors have started to track these types of assets, whereby sparking interest from other players. Forgotten old warehouses and factories (and even office buildings) in inner cities are now seducing these giants, which regard them as the new urban nuclei for handling same-day deliveries, and even, same-hour deliveries, which are demanded by e-commerce nowadays. Spanish investors are already beginning to study opening logistics centres in the heart of Madrid and Barcelona.

The Spanish market is still at the tail of the e-commerce market in Europe, where it represents just 4% of all retail sales, compared with 12% in the United Kingdom and 16% in the United States, according to the ratings agency Moody’s. Nevertheless, experts forecast that e-commerce in Spain, and on the rest of the planet, will continue to make inroads to ultimately account for one third of all retail sales.

This drastic transformation of retail is challenging for the traditional logistics system, comprising regional distribution platforms located away from urban centres that supply different local warehouses to delivery to different businesses. The new system is supported by an e-fulfilment centre (a fully automated platform), which directly supplies several urban hubs located inside cities, which make deliveries to consumers (…).

Blackstone, one of the largest real estate investors in the world, has invested around €4 million in small urban warehouses in Europe since the beginning of 2018. Unlike large warehouses on the outskirts of cities, urban hubs are smaller facilities with a lower risk in terms of their development.

The sovereign Singapore fund, GIC, has also entered the segment. The investment group even has a specific division for building logistics facilities on urban land (…).

Nevertheless, they are difficult assets to find and mould for their new function. On the one hand, because cities have grown and transformed over the last few decades, with housing replacing former industrial land (…). On the other hand, because, these facilities need to be rethought for the constant entry and exit of goods.

The future urban hubs will be built on land still classified as industrial inside cities, which is much cheaper than residential. And, given the difficulty of expanding width-wise due to the lack of land, the plans involve constructing properties with various storeys. In large cities in Asia, where land prices are very high, multi-storey warehouses are already typical.

In addition to industrial land, another option for urban hubs is to use office buildings. To the extent that new business areas in new parts of cities are created, so empty and underused spaces are being left in city centres.

Currently, new technology-based distribution companies, such as Paack and Stuart, are shaking up the market, by accelerating e-commerce deliveries using logarithmic calculations. Meanwhile, traditional express transport companies, such as Seur and MRW, amongst others, have also started to adapt to expedite last mile deliveries with small warehouses in the centre of large cities.

Small signs in Spain

Sources in the real estate sector indicate that some investors specialising in retail have started to study the implementation of these types of logistics structure to complement the flagship stores in the centre of Madrid. Specifically, some players have started to analyse the option of installing urban hubs in office buildings.

In Barcelona, we have already seen one case along those lines. In 2016, Amazon opened a warehouse in the former headquarters of the publishing house Gustavo Gili, on Calle Rosselló in the El Eixample neighbourhood, to introduce its Prime Now service offering deliveries within the hour. Nevertheless, sources in the sector indicate that Amazon may have started to question the suitability of that platform since it has not managed to make the prices of the urban land profitable (…).

Aitor Martínez, Head of Industrial & Logistic are Savills Aguirre Newman, points out that in some cities, such as London and Málaga, pilot tests are being carried out regarding deliveries of the future. A common denominator in all of them are the urban hubs. In the logistics of the future, these new logistical nuclei, will not only speed up deliveries, but they will also respond to other challenges in the sector, such as the introduction of greater restrictions over the entry of vehicles into city centres and the prohibition of polluting vehicles from the roads (…).

Original story: Eje Prime (by S. Riera & P. Riaño)

Translation: Carmel Drake