Tag: Bilbao

Bizcayan Investors Acquire the Café Iruña Building in Bilbao for €18M

11 September 2018 – El Correo

It seems that, sooner or later, everything that is put up for sale in the real estate market in Bilbao ends up being sold. No matter how big the operation. The latest example is the building that houses Café Iruña; an iconic property in the heart of the city, which the Heredia-Spínola family has sold for around €18 million. The entire operation, from when the property was put on the market, to the negotiations and finally the sale, have been conducted with the utmost discretion. In the end, according to sources speaking to El Correo, a Bizcayan investment fund has taken ownership of the building, although international funds also expressed interest.

Initially, the asking price was €20 million, but after a few weeks, that figure was reduced to €18 million (…) for several reasons. According to experts consulted, one of the main drawbacks of the building is that it comes “with tenants” (…). And, what’s worse, many of those tenants pay low rents.

Specifically, around twenty companies undertake their activity in this property, ranging from law firms and attorneys to advisors, massage salons, yoga and pilates studios, insurance brokers, psychologists, study centres and a nursing home for the elderly. Some have long-term long contracts, which will force the new owners to hold intense negotiations if they want to evict them and make a radical change to the operation of the building.

In this sense, there is already talk in social media about the upcoming closure of Café Iruña, an icon of Bilbao since 1903, although that information has been categorically denied by its owners, Grupo Iruña Servicios de Hostelería. They explain that the business will continue – its contract runs until 2020 – and that no closures are planned.

Bilbao as a safe haven

In addition to all of that, another of the problems that the experts associate with this building and which may have made its sale more difficult than expected are its internal features, “it does not have an internal patio”, which makes the central spaces “very dark”, above all if the plan is to convert the property into housing.

Even so, despite everything, the building has now been sold and is another example of the appeal of Bilbao’s property sector. In reality, the real estate market has been consolidating its position for a long time as a safe haven for many investors who, with interest rates at minimum levels, are looking for alternatives to invest their money, albeit with moderate returns (…).

This is happening across almost all of Spain. But in Bilbao, there are additional attractive features: rents are high and land is in short supply. A good combination for doing business in the housing market. On the other hand, the environment is stable, a far cry from the upheavals in Cataluña (…). Moreover, with the disappearance of ETA, Euskadi has shed its straitjacket (…).

Original story: El Correo (by Luis Gómez & Luis López)

Translation: Carmel Drake

Greystar to Manage Bilbao’s New 351-Bed Student Hall Atop the Bus Station

31 August 2018 – El Correo

The future Termibus building in Bilbao will mark a before and after in the neighbourhood of Basurto. It will turn the area on its head, in conjunction with the other major urban planning operations being undertaken in the provincial capital. And not only because it will put an end to the problems that the buses have caused the neighbourhood for decades (…). But also because its placement underground will enable the construction of a 9,000 m2 square and a sophisticated 11-storey building, containing a hotel, a hall of residence for students and a shopping centre.

And it is getting increasingly closer because the terminus project, which must be finished within less than a year, is progressing at full speed. (…). After digging the hole, now it is time to build the four below-ground floors, one by one. The two lower floors will house a rotating parking lot with 528 spaces and the upper two floors will contain the aforementioned intermodal station. At the same time, the names of the tenants that are going to manage the property’s services are starting to be announced.

The first to be made public is Greystar. The global leader in the management of student residences and rental properties in Spain has just acquired the educational accommodation complex from the business group Amenabar, chosen by the Town Hall of Bilbao to build the project as a whole. And it has done so after fighting off competition from top-level international firms such as Global Student Accommodation (GSA), Corestate, AMIRA and The Students Hotel (TSH).

The Basque property developer and construction firm will take care of everything. According to sources at the company, “we are going to construct the building, in an L-shape, and we will allocate the right-hand wing to a student residence”. Having completed it in its entirety “down to the last detail in terms of decoration”, it will hand over the facilities with all of the licences so that the manager (through Resa, its subsidiary in Spain) may open its doors in August 2020.

Shopping centre on the lower floors

The agreement reached seeks to make the most of the available space on the eleven floors of the establishment to provide 306 rooms. Most will be individual rooms, although there will also be some doubles, so that the total number of beds will be 351. “All of them will have a bathroom and an equipped kitchen, and 10 will be adapted for users with reduced mobility”, say the sources (…).

The retail space, which will span two floors and will occupy 7,500 m2 in a privileged area of the city, next to the new Garellano skyscraper, has also been put on the market. Amenabar is already receiving offers from a variety of interested parties, from supermarkets to gyms, to shops selling sportswear, textiles, household items, technology, lottery and hospitality “because a large cafeteria is planned to overlook the square”. The business group is interested in enhancing the diversification of the shops “because this area is going to be strategic in nature with more than 10 million people passing through it each year, including Termibus travellers and metro users, who will have a direct connection to the intermodal station”.

The hotel is the other pillar that will complete the comprehensive offering of the Termibus project. The left-hand wing of the building will be dedicated in its entirety to that activity. And, although the deadline for the tender that the Amenabar group has opened to chose the best candidate does not close until the end of October, the avalanche of proposals received is exceeding all forecasts. Sources at the company acknowledge that its privileged location, in the centre of Bilbao, right next to the San Mamés football stadium and with “unbeatable” transport connections, has sparked interest amongst operators from all over Spain and, above all, those that have great international appeal (…).

Original story: El Correo (by José Domínguez)

Translation: Carmel Drake

ECI Sells 2 Assets in Madrid & Bilbao to Corpfin for €100M

3 August 2018 – Eje Prime

El Corte Inglés is continuing to divest property. The department store group, the largest in its sector in Europe, has closed the sale of two more properties, on prime streets in Madrid and Bilbao, to Corpfin Capital. The sale & leaseback operation has been closed with a gain of 40% with respect to the market value of the properties, at around €100 million.

Specifically, the group has divested its property at number 41 Calle Princesa in Madrid, which spans 11,400 m2 and whose market value is estimated to be around €18 million.

The company has also sold the building located at number 20 Gran Vía in Bilbao to the Spanish fund. That store has a surface area of 5,500 m2 and a market value of around €38 million.

Both properties have been on the market for two years, although the operation was closed off market. El Corte Inglés has signed a long-term lease contract with the new owner that, according to sources familiar with the operation, will charge rents that are 20% higher than the market average on both streets.

The Madrid-based group, chaired since June by Jesús Nuño de la Rosa, has framed this operation within its asset divestment plan to reduce the debt that has been weighing it down for several years. The company owns 92 centres in Spain.

El Corte Inglés has received offers for the purchase of some of its most profitable establishments, including those in Madrid, Barcelona and Marbella. One of those is Torre Titania, formerly the Windsor Building, in Madrid. At the other end of the spectrum, the department store giant owns several stores opened during the first few years of the crisis: almost 24 points of sale, most of which generate significant losses.

One of its most recent operations was closed in October, when the company sold a building in Sevilla to Stoneweg for €10 million, as reported by Eje Prime. The objective of the new owner is to convert that property into a hotel.

Original story: Eje Prime (by P. Riaño & I. P. Gestal)

Translation: Carmel Drake

Basque Municipality Sells its First Plot for Flats in Zorrotzaurre for €6.3 Million

30 August 2018

Last week, the Bilbao City Council approved a measure to sell a plot of land to build a hundred homes.

The Governing Board of the Bilbao City Council approved last week a measure to sell its first plot of land for the development of homes, as a part of the so-called Zorrotzaurre operation. The measure specifies that the Municipality must obtain a minimum of 6.32 million euros with the objective to develop two buildings with a total of more than one hundred price-controlled homes.

Specifically, the almost 2,900-square-meter plot of land is denominated SI-1 and is located on the right bank of the Deusto canal, next to La Tomatera’s recently opened rowing pavilion.

Two buildings, totalling 10,500 square meters, will be erected on the plot of land, with two- to three-bedroom flats. Garage floors and underground storage rooms will occupy more than 5,600 square meters, and almost another thousand square meters will be allocated to commercial premises on the buildings’ ground floors. It is the first housing operation launched in Zorrotzaurre by the Bilbao City Council and serves to reinforce the construction of housing in an area of urban intervention.

It was the last plot of land that remained to be activated in the strip of riverbank that looks over the Deusto canal, located below the areas of Ibarrekolanda and Sarriko. With the decision of the Aburto team, the five plots of land defined in the reparcelling plan are already in different stages of development.

SI-2, which is located next to SI-1, is owned by Visesa, the Basque government’s development company for dependant housing. The design of the two controlled-price residential blocks has already been awarded to an architecture studio. This means that, in all probability, the buildings themselves will be built directly by the public entity itself. In this case, Visesa will opt for the same formula it used to build the Official Protected Housing (VPO) skyscrapers in Bolueta: take over the development of the buildings and sell the flats directly to the future owners.

Down the river, the other two sites, SI-3 and SI-4, are also showing heightened activity. The developer Jauregizar has been building four apartment blocks for almost a year, the first two already sold to VPO applicants who were on the Etxebide list, for a total of 99 homes. On the other hand, the 132 flats in the two adjoining buildings will be sold at a free market price. All were sold under a cooperative regime, within the ViveZorrozaurre.

Finished structures

At present, the construction company is working at a good rhythm. The structure of the four apartment blocks have been finished, and work is proceeding on the interiors. The buildings that will house the VPO have eight floors, plus the ground floor retail premises, while the free market flats have ten floors plus the ground floor premises.

The last lot of riverfront land, the one next to the Sarriko school, is also owned by Visesa and was sold last July. The publicly-owned company decided to tender the land to a private developer to build 153 market-priced homes. Visesa will obtain a good return for the SI-5 since the minimum bid for the site is 22.65 million euros.

As for the design of the buildings, although each one may be designed by different architectural studios, all the residential blocks will have to have a similar aesthetic.

The Zorrotzaurre Board had already decided more than two years ago that the entire urban intervention, both on the right bank of the Deusto canal and all the buildings that will arise on the island in the future, will again have to have a similar aesthetic.

The first element in common is the format of the building, which will be similar to a chromosome (a kind of H), which the deceased urbanist Zaha Hadid drew up in his Master Plan, in an attempt to have as many flats as possible facing the estuary. The second is that all the blocks will have a similar height, between eight and twelve floors.

Over the next five years, the new residential area on the shore of the Bilbao river will gradually grow until it covers a linear front of almost 550 meters in length, which will be the first joint settlement carried out under the Zorrotzaurre operation.

Original Story: Deia – Alberto G. Alonso

Translation: Richard Turner

 

Spain’s CNMC Takes Madrid, Bilbao & San Sebastián to Court Over Anti-Airbnb Legislation

7 August 2018 – El País

The competition authorities are cracking down on the attempt by some of Spain’s large Town Halls to regulate the boom in tourist apartments, created by Airbnb and its competitors, which many blame for contributing to an increase in residential rental prices and the expulsion of the most underprivileged from the centre of Spain’s cities. The National Markets and Competition Commission (CNMC) announced on Tuesday that it is going to challenge the urban planning rules approved recently in Madrid, Bilbao and San Sebastián on the basis that they violate “competition” and harm consumers and users. Other rules, not yet in force, in Barcelona and Valencia, could also be targetted by the CNMC, warn sources at the agency.

Imposing a compulsory licence on those who rent their homes to tourists. Limiting the types of properties that may be leased for short periods. They are some of the measures introduced by the Town Halls that the CNMC is now challenging. And the battle doesn’t stop there. New rules that other cities decide to approve may also clash with the opinion of the market regulator, which is now sending the cases of Madrid, Bilbao and San Sebastián to the High Court of their respective autonomous regions. They will have to decide whether to admit the appeals and overturn, in part or in whole, the municipal regulations.

The body chaired by José María Marín Quemada said that it has sent a request to the three municipalities to provide explanations regarding the “need and proportionality” of the restrictions or, failing that, for those restrictions to be annulled. In the absence of a satisfactory response, the CNMC will resort to the courts through a contentious-administrative appeal. The informal talks held so far have made very clear the gulf that separates the independent body from the Town Halls.

In its note, the CNMC details the different regulations that are, in its opinion, deserving of appeal for being measures with “restrictive effects on competition”. Madrid requires a licence for the rental of tourist apartments and homes. The municipality also establishes a period of one year, extendable for one more, before new licences can be granted in areas such as the Centro district. According to the recently approved legislation, the rental of tourist apartments that do not have an independent entrance will be prohibited, which represents 95% of the homes in the city centre.

In both Bilbao and San Sebastián, the regulations limit tourist apartments to ground and first floors only, unless they have independent access from the street. In Bilbao, moreover, tourist apartments need to be authorised and registered; and in San Sebastián new tourist apartments are prohibited in certain parts of the centre.

Higher prices

The Competition authority believes that, with their decisions, the municipal teams in Madrid, Bilbao and San Sebastián “are impeding the entry of new operators and consolidating the position of the existing suppliers of tourist accommodation”. The body has announced that these measures will lead to “higher prices in terms of tourist accommodation” and lower quality, investment and innovation in tourist accommodation in those three cities (…).

The affected municipalities reacted quickly, stating that they will defend their regulations in the courts. The Town Hall of Madrid, governed by Manuela Carmena (Ahora Madrid) said that it wants to combine the defence of tourism with the rights of “citizens in our neighbourhoods”, according to Julio Núñez. “Our objective is introduce regulation that protects the residential use of land and favours competition in a sector where hostels and hotels already operate”, add sources at the Urban Planning Department (…).

Original story: El País (by Luis Doncel)

Translation: Carmel Drake

El Corte Inglés Puts 2 Shopping Centres Up for Sale for €100M

3 August 2018 – Voz Pópuli

A new operation for El Corte Inglés. The distribution group has put up for sale two of its smaller department stores. The properties, located in Madrid and Bilbao, are considered non-strategic by the retailer although it will continue to occupy them as the tenant, according to sources close to the operation.

The Expansión newspaper reports that El Corte Inglés is finalising the sale of two establishments to Inbest, the investment vehicle owned by the manager Corpfin Capital Real Estate for around €100 million.

The department store group will continue to use the two buildings – located on Calle Princesa in Madrid and Gran Vía de Don Diego López de Haro in Bilbao – through a long-term lease contract.

This operation forms part of El Corte Inglés’s debt reduction plan. According to Expansión, it is the first divestment that the group will make following the appointment of Jesús Nuño de la Rosa as President in June.

Original story: Voz Pópuli

Translation: Carmel Drake

CBRE: Investor Interest in High Street Stores Skyrockets

5 July 2018 – Cinco Días

Stores on the most commercial streets of Spain have become an object of desire for investors in the real estate market. Large funds and insurance companies alike are investing in these types of assets and experts predict that a new record is going to be set in the segment this year.

Investors are expected to spend around €1.1 billion on these types of commercial premises in 2018, according to forecasts from the consultancy CBRE. That figure would exceed the amount invested in high street stores in 2017 by €300 million, equivalent to a growth rate of 36.9%. Of interest are shops on commercial thoroughfares such as c/Preciados and c/Serrano in Madrid and Paseo de Gracia and Portal de l’Àngel in Barcelona. In fact, those two cities accounted for 79% of total investment last year. “Nevertheless, other cities in Spain are on the rise and there is growing demand for investment products in cities such as Bilbao, Valencia, Sevilla and Málaga”, according to the report “The Keys to Retail in Spain”, published by CBRE yesterday.

Investors regard these types of well-located assets as a good option for placing their money, a solid alternative in the context of low-interest rates and because these high street stores perform better (than other commercial assets) in the face of competition from online retailers. Currently, according to CBRE; the returns on these properties amount to 3.5% in Barcelona and to 3.25% in Madrid; in other cities (with more risk), the returns are greater.

The stars of these acquisitions are mainly the large funds. Hines, M&G, AEW, Thor, Union Investment, CBRE GI and Deka. “In 2017, in addition, an insurance company entered the high street sector for the first time: Generali acquired the Pull & Bear store on Calle Preciados in Madrid”, according to the report. Other active players include the Socimis, such as Tander, Ores, and Silicius, which have started to express interest.

In terms of large operations so far this year, in January, the German fund Deka acquired 16 Inditex stores for €400 million. Another significant operation was the acquisition of Mercado de San Miguel by the Dutch fund Redevco, for €70 million.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Socimi Tander Acquires Gran Vía 6 (Bilbao) for €7.5M

26 June 2018 – Eje Prime

Tander is expanding its geographical reach. The Socimi, present in Barcelona and Santander until now, is growing in the north of Spain with the purchase of its first asset in Bilbao. The company has acquired number 6 Gran Vía in the Basque city for €7.5 million, in its first operation since it made its debut on the MAB in January.

According to a statement filed by the company with the Alternative Investment Market (MAB), the operation includes “two properties that comprise a single commercial premise”, with a constructed surface area of 257.33 m2.

“These premises have been leased recently, and are on the verge of being handed over to the new lessee, something that will happen within the next few days”, says the company, owner of a fund in which the Canadian manager Première Alliance holds a stake.

To carry out the operation, Tander has required external financing. In June, the company granted various guarantees to ING to “free up” €8.32 million of the financing committed with the financial entity, which amounts to €54.27 million in total. Similarly, the company drew down €4.27 million more.

The Socimi is using that amount to finance the purchase of the asset in Bilbao as well as to strengthen “its financial capacity to comply with its real estate asset acquisition strategy”. Tander’s investment plan for 2018 amounts to €25 million, which will serve for the acquisition of between three and four assets outside of Madrid and Barcelona, according to Eje Prime.

The company debuted on the MAB in January with a valuation of €50 million. Tander owns five assets in prime areas of Barcelona and a sixth in Santander, which constituted a portfolio that was worth €80.3 million at the beginning of the year.

From Vía Laietana to Paseo de Gracia

Tander’s footprint in Barcelona is located in the centre of the city. The Socimi’s largest asset is an office at number 6-20 Calle Casp, which has a surface area of 3,457 m2. That building houses the offices of Cadena SER, owned by Grupo Prisa, just above Teatro Tívoli.

At number 15 Paseo de Gracia, the manager owns a retail premise measuring 527 m2, which is currently leased to FC Barcelona, which has opened a flagship store. In the same street, at number 27, the Socimi has leased a store measuring 792 m2 to the brand Cos, part of the H&M group.

Tander completes its portfolio in Barcelona’s city centre with part of number 47 Vía Laietana, an office building in which the Socimi has leased 1,100 m2 to Banco Sabadell. The financial entity also leases a branch measuring 155 m2 at number 171 Travessera de Gràcia, which is also owned by Tander Inversiones.

Original story: Eje Prime

Translation: Carmel Drake

ECE and J&T Bid in RE Operation of the Year

12 June 2018 – Expansión

One of the real estate mega-operations of the year is entering the home stretch. The German manager specialising in retail ECE and the Slovakian real estate leader J&T Real Estate are positioning themselves as favourites to acquire the Valle Real (Santander), Max Center (Bilbao) and Gran Casa (Zaragoza) shopping centres, currently owned by Iberian Assets, a joint venture in which the fund managers CBRE Global Investors (CBRE GI) and the multi-national Sonae Sierra both hold 50% stakes.

In the case of the Slovakian firm, the operation would be carried out through an alliance with Sonae Sierra and would represent J&T Real Estate’s debut in Spain.

Market sources explain that, in both cases, the bids for these assets exceed €450 million and reveal that the transaction could be closed within the next few weeks.

The portfolio, baptised as Project Summit, includes almost 117,000 m2 of gross leasable space in total (owned by Iberian Assets) and together, the three centres received 24 million visitors last year. CBRE GI and Sonae Sierra engaged the real estate consultancy firms CBRE and JLL at the beginning of the year to sell the three shopping centres.

The assets

Valle Real, opened in November 1994, has a gross leasable area of 47,725 m2, spread over two floors and is fully occupied (100%).

The shopping centre, located in Santander, closed last year with 5.9 million visitors. Valle Real includes a Carrefour hypermarket, which occupies almost 16,000 m2. Its other main tenants include Primark, Inditex, H&M and Forum Sport.

Meanwhile, Max Center is located in Bilbao and it opened its doors for the first time in 1997. The asset was remodelled in 2000 and its tenants include Inditex, H&M, Cortefiel, La Tagliatella, Foster’s Hollywood and Cinesa.

The shopping centre also has an adjoining leisure space, Max Ocio, which opened in 2002.

In total, the centre has a surface area of almost 40,000 m2 and it also received 5.9 million visitors last year.

Gran Casa, inaugurated in 1997, has a gross leasable area spanning 80,000 m2, almost half of which is occupied by Hipercor, and with an overall occupancy rate of 93%. Last year, the shopping centre, located in Zaragoza, received 12.2 million visitors.

If the transaction goes ahead, it will be the largest (non-corporate) operation in the real estate sector so far this year by transaction volume.

Moreover, the sale of the Summit portfolio would clear the way for the sale of another major commercial portfolio by Unibail Rodamco.

The shopping centre giant has hung the “for sale” sign up over four of its shopping centres in Spain – Los Arcos (Sevilla), Bahía Sur (Cádiz), Vallsur (Valladolid) and El Faro (Badajoz) – an operation that may exceed the volume of Project Summit.

Investment

According to data from the Spanish Association of Shopping Centres and Retail Parks (AECC), last year 29 transactions, involving 36 assets, were closed for a total sum of €2.7 billion, which represented growth of 35% YoY.

So far this year, several significant operations have been closed such as the sale of a portfolio of 14 premises by Inditex to the German fund Deka for €370 million (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Arrasate & Ibosa: Favourites in the Bid to Build Bilbao’s Star Residential Project

28 May 2018 – Eje Prime

Up to eight property developers are willing to pay between €30 million and €50 million to build residential properties in Bilbao. The two favourites in the battle are Arrasate and Grupo Ibosa, which have submitted two of the highest offers for this housing plan, which forms part of Project Garellano and which is being managed by Bilbao Ría 2000.

One of the key factors behind Arrasate and Ibosa’s strong chances of winning the tender is that both have the architect Richard Rogers in their project, which gives them an extra 5% in their scores. The vast majority of the score (75%) in the auction corresponds to the economic offer, and the remaining 20% relates to the assessment of the business plan and the construction, according to El Confidencial.

The future tower will be 119 m tall and will comprise 36 storeys in which 200 homes will be constructed. The location of the residential property will be prime, given that it is being built right in the heart of the city.

The plot that the public company Bilbao Ría 2000 has put up for sale has a surface area of 2,247 m2 and a buildability of more than 25,000 m2. The building will also have five underground floors with 235 parking spaces and storerooms for its future inhabitants.

In addition to Arrasate, a Basque cooperative manager (…) and Ibosa, the company led by Juan José Perucho, other companies participating in the auction for this development include the listed company Neinor Homes, ACR and a JV between the Madrid-based property developer Pryconsa and the local firm Amenabar.

Original story: Eje Prime

Translation: Carmel Drake