CBRE GI to Invest €800M in Spain in 2018

18 May 2018 – Expansión

The real estate asset manager CBRE Global Investor (CBRE GI) is redoubling its commitment to Spain. After ending last year with a record investment of €800 million and starring in several mega-operations, the firm wants to establish a new record this year, exceeding the milestone set in 2017. From its offices in Madrid, CBRE GI manages assets worth €3.2 billion in the retail, office, logistics and student hall sectors, located in Spain and Portugal, and is getting ready to enter the residential sector.

“Last year was very important given the significant transaction activity undertaken, of which €800 million corresponded to purchases. This year, we hope to match that figure and even exceed it”, explained Antonio Simontalero, Head of Operations for Spain and Portugal at CBRE GI, speaking to Expansión.

The firm works with eight funds and owns a portfolio comprising 19 shopping centres, 37 logistics platforms, three office buildings and 33 halls of residence for students.

Although retail is still the main market for the manager, accounting for 70% of its portfolio, CBRE GI has decided to attack new businesses. Thus, last year, it entered the market for student halls with the purchase, together with AXA IM Real Assets and Greystar, of Resa, the market leader in Spain, for €400 million. “We are continuing to analyse opportunities in the student hall market. We want to grow the portfolio and increase our exposure”, says Antonio Roncero, Head of Transactions for Spain and Portugal at CBRE GI.

Another milestone in 2017 was the consolidation of the manager in the logistics sector following the joint venture signed with Montepino for the development and promotion of logistics assets. “The initial objective of the investment in the joint venture with Montepino was €300 million, but we hope to exceed that figure soon. With the developments underway, we have 80% of the investments committed”.

Simontalero points out that CBRE already had 700,000 m2 of logistics assets under management and the agreement with Montepino will allow the firm to exceed the 1 million m2 threshold. The logistics sector is thereby becoming the manager’s second segment by volume, accounting for almost 15% of its total assets. “The differentiating feature of this joint venture is that all of the assets are going to be latest generation, which is what the main operators require”, adds Roncero.

Rental homes

In terms of next steps, CBRE GI is preparing to attack a new market, specifically, the residential rental market. “We are analysing various options with different partners, either through the development of new-build properties or by investing in a business through the purchase of portfolios”, say the directors.

For Simontalero, the size of the rental market vs. the purchase market in Spain is going to grow and will move into line with the rest of Europe. “There is latent demand that is not being fully satisfied with the current supply in the market”, he said.

For Roncero, the key is in the service. “We see an opportunity for offering a professionalised service in the rental home segment, providing security to the tenant and placing emphasis on the maintenance of properties”.

Roncero says that the objective of CBRE GI involves gaining “critical mass” in the sectors to which it is least exposed in order “to diversify and be more versatile”.

Sales

In addition to growing its portfolio with new properties, the company is continuing to rotate its assets. Specifically, last year, it sold four shopping centres (two in Spain and two in Portugal), and it is now preparing to sell three more – Gran Casa (Zaragoza), Valle Real (Cantabria) and Max Center (Barakaldo) – whose ownership it shares with Sonae.

“Our business involves identifying investment opportunities, managing them and selling them to generate returns for our investors”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Union Investment Puts Marsans’ Former HQ up for Sale

16 January 2018 – Expansión

The fund Union Investment, which is headquartered in Frankfurt, has decided to cash in one of its most high profile real estate assets in Spain.

The firm has put the Edificio Pórtico in Madrid up for sale. Designed by the architecture studios SOM and Rafael de La-Hoz, this office building is leased in its entirety to several companies including Pullmantur, Redexis Gas, Nautalia, Beam España and Pepsico, amongst others. Nevertheless, it is well-known because it housed the headquarters of the tourist group Marsans for several years. The company created by Gerardo Díaz and Gonzalo Pascual purchased the property in 2009 from Hines and Monthisa for an amount that was never disclosed. Years later, Marsans reached an agreement with Union Investment to sell the building for €115 million through a sale & leaseback contract, whereby the tourist group remained as the tenant paying a monthly rent of more than €700,000.

A year later, Marsans received an eviction notice due to the non-payment of the rent, and it abandoned the property in 2011 once it had filed for liquidation. The departure of its main tenant did not represent a problem for Union Investment, which soon found replacements.

Currently, the building, which has a gross leaseable area (GLA) of 27,000 m2 spread over eight floors, is leased in its entirety. That, together with the quality of the property and the stamp of two recognised architecture studios, raises its appeal in the market.

For the sale, the German fund has engaged the real estate consultancy CBRE, which has already started to reach out to the usual investors in the office market in Madrid. The sales price amounts to around €130 million, say sources in the know, and the operation is expected to be closed during the first half of this year.

Investment in offices in Spain amounted to €2.21 billion in 2017, according to JLL, down by 20% compared to the previous year.

Lack of supply

That decrease was much more marked in Madrid, which although continued to lead the investment market in Spain, with investment of €1.374 billion, suffered a decrease of 38% in 2017 with respect to the previous year.

“Nevertheless, that reduction was not due to a decrease in investor interest, but rather a lack of supply, given that the two previous years saw record figures”, explains Borja Ortega, Director of Capital Markets at JLL (…).

Meanwhile, Union Investment is one of the largest investment fund managers in Germany. In Spain, its recent operations include the sale of the Área Sur shopping centre, located in the Cadiz town of Jerez, which it sold last year to a joint venture controlled by Axa IM-Real Assets and the Portuguese real estate company Sonae Sierra for €110 million. At the global level, the German firm manages assets worth more than €250 billion.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

AXA & CBRE GI Buy Resa, The Student Hall Giant

19 September 2017 – El Confidencial

Azora, Artá Capital, March Campus (the investment vehicle backed by Banca March clients) and Mutua Madrileña have reached an agreement to sell 100% of Grupo Resa to a group of international investors. AXA IM – Real Assets and CBRE Global Investment Partners – on behalf of their clients – have acquired most of the portfolio, whilst Greyster, which has acquired the operating business, will act as the asset manager.

The operation is subject to final authorisation from the competition authorities and, although the amount of the transaction is unknown, real estate experts say that it will be one of the most important transactions in 2017 by investment volume.

Grupo Resa, which has been on the market since the beginning of March, has consolidated its position as the largest platform of student halls in Spain, with 9,309 beds in 19 cities, including Madrid, Barcelona and Salamanca. Resa is the largest student hall company in Spain, and in Continental Europe. Managed by Azora since 2011, it has experienced significant growth during that period, increasing its portfolio of halls from 26 to 37, of which 33 are currently operational and the remaining 4 are being constructed. BBVA and CBRE have acted as financial advisors to the vendors and Garrigues has been the legal advisor to the operation.

Resa obtained revenues of €46 million in 2016, which represented an increase of 30% with respect to the figure recorded in 2014 (€27 million), when it generated an EBITDA of €26 million. The occupancy ratio of the properties is close to 100%, according to documentation about the company (to which this newspaper has had access) and also according to its ambitious expansion plans for the next decade, which include doubling in size, to achieve a portfolio of around 17,000 beds across Spain.

Resa currently has four projects underway, which will add almost one thousand more beds to its existing supply, in such a way that, in the short term, it will have almost 10,000 beds. To put that in context, the company has seven times more beds than its next largest competitor in Spain (…).

The sale of Resa is the second operation of these characteristics to go ahead in Spain in a year, given that in March last year, the fund Oaktree put Threesixty Developments – formerly Knightsbridge Student Housing – up for sale. It is one of the largest builders and operators of student halls of residence in the United Kingdom, Ireland and Spain, where it has seven projects – five in Madrid and two in Barcelona – which it manages through the Student Housing Company platform and which contain more than 2,600 beds.

Twenty years of experience

(…). Grupo Resa was founded in 1992 and four years later it opened its first hall of residence in Terrasa. (…). Its stock includes accommodation with everything included to the rental of rooms only.

Original story: El Confidencial (by E.S.)

Translation: Carmel Drake