Telefónica to Close & Sell Off 650 Telephone Exchanges between 2018 & 2020

16 March 2018 – Cinco Días

Telefónica is continuing its intense level of activity in the management and disposal of its assets (…). In this way, the telco has recorded an impact on Operating Income Before Depreciation and Amortisation (OIBDA) of gains from the sale properties in Spain of almost €180 million over the last three years. This maximisation in the value of these assets has generated a positive impact on the profitability of the company during a period marked by strong competitive pressure. In other words, these sales have helped to improve the results on firm’s income statement.

According to the company, in the accounts for the last three years, the impact of gains from the sale of properties in Spain exceeded €35 million in 2017 (…), €71 million in 2016 and €73 million in 2015.

In recent times, Telefónica has focused a large part of its real estate activity on adapting its infrastructure to the real needs of the business. In this sense, the most recent drive has been motivated by the process to shut down copper exchanges, accelerated by the migration of clients from that traditional technology to new fibre optic networks, which the company has rolled out right across Spain. With this change, those facilities are no longer necessary for the operations.

And this process is going to continue to the extent that more copper exchanges are closed, in accordance with the company’s plans. Thus, the operation may accelerate the sale of these facilities, which in many cases are located in important buildings in central areas of provincial capitals and other cities.

Overall, Telefónica plans to close 650 copper exchanges in total right across Spain between 2018 and 2020, as part of its program to modernise its infrastructure and shut down the ageing networks, according to explanations provided by the group at the recent presentation of its results for 2017.

For example, the telco has put up for sale the exchange that it owns in Gijón, in the heart of the shopping district of the Asturian city, for a price that could reach €12 million, according to reports in the local press.

In any case, its sales in recent times have affected different types of buildings. According to sources in the sector, in recent years, Telefónica has sold iconic buildings in cities such as Madrid, Barcelona, Valencia, Bilbao, Santander, Tarragona and Zaragoza.

Sources in the sector also indicate that the gains (from future sales) may be high given that in many cases the buildings are old, and were acquired or constructed by the company a long time ago.

Amongst other movements in the real estate segment, in 2016, the operator sold several buildings in Madrid, Barcelona, Santander and Zaragoza to Beach Bienes Inmuebles for almost €50 million.

In turn, at the beginning of 2017, Telefónica sold a building in the Argüelles neighbourhood of Madrid to the British real estate group Princeton Investments for almost €25 million (…).

Original story: Cinco Días (by Santiago Millán Alonso)

Translation: Carmel Drake

Telefónica Sells Four Properties For c. €50M

4 October 2016 – El Mundo

According to sources familiar with the operation, Telefónica has completed the sale of a portfolio containing four properties to Beach Bienes Inmuebles for around €50 million.

The last known operation involving the company was its purchase, through public auction, of a building from the Community of Madrid located at number 3 Gran Vía, in Madrid, for around €8 million in 2013.

All of the buildings are offices and facilities used by Telefónica, which has reserved the right to remain as the tenant for a mandatory period of seven years, with the option of extending for an additional five years.

Three of the properties may be used for residential purposes (those located in Madrid, Barcelona and Santander) and the other one (in Zaragoza) may be used for offices.

The building in Madrid occupies a plot measuring 749 sqm on Calle General Yagüe, 31, in the heart of the Tetuán district and just a short distance from Paseo de la Castellana. It has a constructed surface area of 3,411 sqm spread over five above ground floors and a lower ground floor, which may be used for residential purposes.

The property in Barcelona is located on a plot of land measuring 2,555 sqm on Paseo de Valldaura, 66-74, an established residential area in the Catalan capital. Its urban planning classification means that it may be converted into a residential building with common areas, with retail premises on the ground floor.

The building in Santander, located on Calle Arrabal, 23, may also be used for residential purposes, with retail premises on the ground floor.

The most unique property in the portfolio is located on Paseo de la Independencia in Zaragoza, the city’s main commercial thoroughfare. The building was constructed in 1926 and was designed by the architect Ignacio Cárdenas Pastor, who was responsible for the creation of some of Telefónica’s most important buildings during the first half of the twentieth century. Its façade and staircase is protected and the building has a total constructed surface area of 5,795 sqm.

Original story: El Mundo (by Luis M. De Ciria)

Translation: Carmel Drake