Tag: bnp paribas

BNP Paribas: Logistics Leasing Rose by 48% in Cataluña in Q1

20 April 2018 – Eje Prime

The leasing of logistics space in Cataluña rebounded by 48% during the first quarter of 2018 with respect to the same period a year earlier, to amount to 185,890 m2, according to a report compiled by the Research Department at BNP Paribas Real Estate. The leasing figure is 40% higher than the quarterly average for the last three years, during a period of consolidation in the Catalan logistics market.

A large proportion of the surface area leased during the first quarter of the year saw the pre-rental of warehouses under construction and turnkey projects. In this sense, operations involving surface areas ranging from 7,000 m2 to 50,000 m2 stood out in particular.

Rental prices continued to rise and prime rents increased by 3%, to reach €6.5/m2/month. The good pace of logistics leasing indicates that the upward trend will continue over the next few quarters. In terms of average rents in the local, regional and national logistics corridors, the same behaviour is being observed in terms of rising prices and a decrease in shortages, with growth of 5% in annual terms, to reach €4.7/m2/month.

On the other hand, the availability rate of logistics space in Cataluña continued to fall to reach 2.8%, at the same time as construction activity was increasing due to demand for rental properties. The development of turnkey projects means that the available surface area has not been affected, remaining at very low levels.

Original story: Eje Prime 

Translation: Carmel Drake

BNP Paribas: RE Inv’t Amounted to €2.45bn in Q1 2018

6 April 2018 – Expansión

The rate of growth of real estate investment in Spain is slowing down, although it retained its strength during the first quarter of 2018. The volume transacted during the 3 months to March amounted to €2.45 billion, having decreased by 27.5% with respect to the same period last year (€3.38 billion), a figure that included record operations such as the purchase of the Xanadú shopping centre for €560 million, which caused investment volumes to soar.

According to a report compiled by the consultancy firm BNP Paribas Real Estate, the retail segment led the investment ranking during the first three months of the year to account for 44% of the total volume transacted, in other words, around €1.08 billion. That was thanks to operations such as the sale of a portfolio of stores by Inditex to the German fund Deka for €370 million; the sale of Parque Corredor, in Torrejón de Ardoz (Madrid), for €200 million; and the sale of the Las Habaneras shopping centre in Orihuela (Alicante), for €160 million.

Retail was followed by the office and hotel segments, with a volume of around €350 million each, and the logistics segment with 10% of the total.

Residential assets also accounted for 10% of the total investment figure thanks to operations such as the purchase of a portfolio of 1,500 homes by Testa from CaixaBank for €228 million, whilst alternative assets gained traction to account for 7% of the total volume invested.

Assets

By type of investor, funds are becoming established as the main buyers of real estate, unseating the Socimis, which remain immersed in the asset management process and which are preparing to dispose of some of their assets.

David Alonso, Director of Research at BNP Paribas Real Estate, explains that the high volume operations currently in the pipeline indicate that the total investment figure for the year as a whole may well reach, or even exceed, the investment volume recorded in 2017.

The aforementioned operations include the portfolio of offices that Hispania has on the market, which has an estimated closing price of between €500 million and €600 million; three shopping centres that Sonae Sierra and CBRE Global Investors have up for sale worth around €500 million; a portfolio of four shopping centres owned by Unibail Rodamco; and several large office complexes in Madrid and Barcelona located in good areas of the market.

More caution

Luis Nuño, Director of Office Investment at BNP Paribas Real Estate, indicates that the market remains optimistic about the evolution of real estate investment in Spain, although with “more caution” than in previous years.

“Investors are going to have to propose more imaginative formulae and be more flexible if they want to access certain operations. Vendors’ expectations have been increasing gradually in recent years, making it more difficult to achieve the returns demanded by investors”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

BNP Paribas: RE Inv’t in Europe Reached Record High of €259bn in 2017

2 April 2018 – Expansión

Madrid is placed in third position in the ranking behind Paris and London.

Real estate investment in Europe reached a record figure of €259 billion in 2017, which represents an increase of 11% with respect to the previous year, according to a report compiled by BNP Paribas Real Estate, which has attributed this growth to the improvement in the global economy.

Madrid (-14%) was placed in third position in the ranking of real estate investment in Europe behind Paris (-18%) and London (+26%).

Almost half of the investment volume in 2017 involved “mega-deals” worth more than €100 million a piece.

The research also reveals that offices continue to be the most sought-after asset for European investors, given that they account for 43% of the total investment figure.

Moreover, the logistics sector grew by 56% last year, boosted by major corporate agreements, according to the report.

On the other hand, yields continued their downward trend to reach historical lows by the end of the year. Prime or exclusive yields in the office market in Madrid amounted to 3.25%.

Original story: Expansión 

Translation: Carmel Drake

Change of Heart: Slim Suspends Sale of Torre Realia in Barcelona

15 January 2018 – Eje Prime

Carlos Slim has changed his mind about Torre Realia in Barcelona. The real estate company owned by the Mexican magnate has decided to suspend the sales process of its most iconic asset in the Catalan capital, according to explanations provided by sources close to the process. Realia has received offers for more than the asking price (€140 million), however, the company has decided not to sell, citing changes in the company’s strategy.

Last June, Realia entrusted JLL and BNP Paribas with the mandate to sell this asset, equivalent to Torre Kio in Madrid. The tower is located in one of the fastest growing areas of the Catalan capital in terms of the office sector, in Plaza Europa, which is set to become the city’s new business district.

Although sources at the group claim that the decision is linked to a change in strategy, given that the offers that Realia had on the table were “higher than the price set by the real estate group”, it seems that the political situation and the climate of instability may have also been triggers for Slim’s group to decide to postpone the sale to a later date.

Realia’s trophy asset in Barcelona has 24 floors and a surface area of 31,960 m2, as well as 399 parking spaces. The property, which comprises two buildings, was designed by the architect Toyo Ito, in collaboration with Fermín Vázquez, from the B720 Arquitectos studio. Torre Realia is 110 m tall and its ground floor houses a shopping arcade that joins the two towers.

In terms of its real estate activity, at the end of the first half of 2017, Realia primarily owned offices and shopping centres for rent, which spanned a combined surface area of 405,842 m2 and had an occupancy rate of 93.5%. Moreover, at that time, it also owned an asset measuring 18,324 m2, in the form of the Los Cubos building in Madrid, which it ended up selling to the French group Therus for €52 million.

Realia’s stock of offices for rent spans a surface area of 226,729 m2, with an occupancy rate of 94.7%. Moreover, the company owns 41 residential plots for family homes, destined for self-promotion, which it has put up for sale. Realia’s current land portfolio spans a buildable surface area of 1,851,392 m2, of which 49% is located in Madrid and the central region of Spain, according to data from the group.

Plaza Europa, on the rise

The sale of Torre Realia comes at a time when the area in which it is located is enjoying a real boom. As the headquarters of KPMG in Barcelona, Realia’s asset has seen its value rise in recent months thanks to the large number of operations that have been closed in this enclave and to the growing number of large corporations that are moving their head offices to this new financial district, in L’Hospitalet de Llobregat.

One of the main players in the area is the Puig family, which has joined forces with the Catalan Socimi Colonial to build a 14,000 m2 tower at Plaza Europa 46, right opposite Grupo Puig’s corporate headquarters, which it just purchased from BBVA for around €60 million.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Lone Star Exits Neinor after Selling its 12.5% Stake for €174M

11 January 2018 – Expansión

Following this operation, the stake owned by the US fund in the property developer, which was its largest shareholder before its stock market debut, will be reduced to a token 0.4%.

Lone Star is folding up the sails in Neinor Homes, whose share capital it is almost completely exiting less than a year after the property developer’s debut on the stock market, which took place in March last year. The US fund has undertaken an accelerated placement of 9.85 million shares in Neinor, representing 12.5% of that firm’s share capital, amongst institutional investors.

Yesterday, the property developer closed trading at €18.04 per share after a decrease of 1.1%, which means that the package put up for sale was worth €177.8 million.

Nevertheless, today, Neinor has informed the National Securities and Exchange Commission (CNMV) that the price at which the placement was closed was €173.99 million, equivalent to €17.65 per share.

After completing this operation, Lone Star’s presence in Neinor, the company that it controlled 100% prior to the property developer’s debut on the stock market, will be reduced to a token 0.4%, equivalent to 350,918 shares that it is retaining to ensure that it agrees the conditions of an incentive plan for “certain directors and key employees”.

With the sale of this latest package, Lone Star is culminating a divestment process that it began in March last year with Neinor’s stock market debut, when the American fund placed 60% of the property developer’s shares on the market, for which it received revenues of around €800 million.

A few months later, in the middle of September, Lone Star divested another 27% of Neinor, receiving proceeds on that occasion of €394.6 million and obtaining profits of €166 million as a result.

Following the accelerated placement completed yesterday and entrusted to BNP Paribas, Citigroup, Credit Suisse and JP Morgan, the resources raised by the US fund from the sale of Neinor now exceed €1.37 billion in total.

Neinor, whose origins date back to 2015, when Lone Star acquired Kutxabank’s real estate assets, debuted on the stock market with a valuation of €1.34 billion. Currently, its market capitalisation amounts to €1.425 billion, up by 6.3% from that figure.

Neinor’s main shareholders include the investment firms Wellington, with an 8.5% stake; Fidelity, with around 6.8%; and Invesco, with 5%, according to the CNMV’s registers.

Original story: Expansión (by J. Díaz)

Translation: Carmel Drake

BNP Paribas: Office Rentals Rose by 22% in Madrid in 2017

5 January 2018  – Eje Prime

The good news is never-ending for the office sector in Spain. In Madrid in 2017, the market recorded its highest level of office rentals since 2007, increase the absorption of this asset type by 22%, thanks to greater demand from public administrations, according to a report from BNP Paribas Real Estate.

According to the entity, last year, 525,000 m2 of office space was leased in Madrid. The office rental figures recorded in Madrid still do not approach the almost 1 million m2 of space that was leased ten years ago. Nevertheless, it is worth taking into account the fact that companies no longer need such large spaces to undertake their activity because working practices have changed, and there is now a trend to optimise spaces.

The increase in demand was also accompanied by an increase in prices, which rose to €31/m2/month in the most exclusive areas. Nevertheless, some lease contracts were also signed for prices of up to €36/m2/month in certain buildings in the Spanish capital’s financial district.

Original story: Eje Prime

Translation: Carmel Drake

Record Financing Deal: Testa Raises €0.8bn From 16 Banks

15 December 2017 – El Confidencial

Testa has managed to close new financing amounting to €0.8 billion and, in a move that has made the deal remarkable, has not had to use any of its buildings as collateral.

As El Confidencial revealed, the entity in which Santander, BBVA, Merlin and Acciona hold stakes, was negotiating to refinance all of its debt so as to be well positioned to make its debut on the stock market and to have a sizeable sum to make new purchases.

In the end, according to financial sources, the Socimi has obtained the backing of 16 financial entities for the largest unsecured loan ever granted to a company in this sector in Spain. The new loan will be structured in three tranches, whose maturity dates will range between two and five years.

The first, amounting to €0.35 billion, is a bullet loan, which will be repaid in its entirety upon maturity, in December 2022; the second, for the same amount, is a 2-year bridge loan, which the company plans to refinance with a bond; and the third, a line of credit amounting to €0.1 billion has a mortgage guarantee over five years.

The entities that have participated in this financing are Banco Sabadell, Santander, Barclays, BNP Paribas, Caixabank, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, ING, JP Morgan, Mediobanca, Natixis and Société Générale.

Following this agreement, Testa’s leverage ratio has increased from 15% to just under 35% and all of its debt is now corporate.

The Socimi is working with a view to making its debut on the main stock market in the spring. It will make that move with a portfolio comprising 9,219 homes dedicated exclusively to rent, spread over 111 buildings and worth almost €2.2 billion.

Nevertheless, thanks to the signing of this new financing, the Socimi now has fresh money to take on new acquisitions before its stock market debut, in line with the purchase that it announced in September of 135 homes from BuildingCenter, the real estate subsidiary of CaixaBank.

65% of Testa’s portfolio is located in Madrid, San Sebastían accounts for 7%, Barcelona 5%, Valencia 4%, Mallorca 3% and other locations the remaining 15%.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Aguirre Newman: Almost 1 million m2 of Logistics Space Leased in Madrid & Barcelona YTD

21 November 2017 – El Inmobiliario Mes a Mes

In total, 929,698 m2 of logistics space was leased in Madrid and Barcelona during the first three quarters of 2017, up by 22.6% compared to the same period in 2016, whilst the volume of investment in logistics assets reached €600 million. That figure represents 76% of the total recorded last year, which marked a historical maximum investment volume in Spain, according to Aguirre Newman.

During the third quarter of 2017, the high level of investor interest in logistics assets, which started four years ago, continued to flourish. It was boosted by factors such as the consolidation of economic growth, the gradual improvement in household consumption, rising rental prices in the main markets and improvements in financing conditions.

The initial rate of return for the most prime assets in the best locations amounted to around 6%, and rates of around 5.5% were seen for certain one-off operations. According to the report from Aguirre Newman, the scarce supply in the main logistics markets in Madrid and Barcelona is affecting the market in two ways. On the one hand, interest in secondary markets is continuing to rise, most notably in Zaragoza, Valencia and Sevilla. On the other hand, there is a high degree of interest in buying land, either to develop speculative projects or to build turnkey projects, under forward funding or forward purchasing formats.

Demand for logistics space in Madrid during the third quarter of the year reached 226,757 m2, compared to the total cumulative space leased in 2017 of 614,070 m2. That figure represents an increase of 52% with respect to the same period last year. Both the activity recorded during the third quarter – which is closely related to e-commerce – as well as that registered during the year to date represent record levels never seen before, and so the report forecasts that the end of 2017 will also be very positive in light of the operations currently underway.

The most significant operation in terms of the volume of surface area leased in the third quarter was completed in Illescas (Toledo), where an operation involving a turnkey project with a surface area of 103,000 m2 was signed. That was followed by another operation closed by Leroy Merlin in Meco with a surface area of 59,914 m2. In terms of rental income, the maximum recorded was €4.85/m2/month, as a result of an operation closed in the Corredor del Henares, specifically in San Fernando de Henares.

According to Aguirre Newman’s research, activity in the market for land dedicated to logistics/industrial use has grown considerably with respect to previous quarters, with the completion of seven operations spanning a combined surface area of 379,096 m2, destined for both turnkey and at-risk projects. The most significant land operation was the purchase of a plot measuring 242,000 m2 in Illescas (Toledo) for the development of the aforementioned logistics platform (103,000 m2).

On the other hand, the leasing of logistics space in Barcelona amounted to 91,406 m2 during the third quarter, which represents a slight decrease of 9% compared to the same period in 2016. Meanwhile, the total surface area leased during the first nine months of 2017 amounted to 315,628 m2.

Vallès Oriental and Barcelonès were the most active regions in terms of the number of operations, where three and two operations were closed, respectively. In terms of the largest operations closed, a contract was signed in Alt Penedès for a space spanning 20,000 m2 and in Vallès Oriental, another contract was signed for a space measuring 14,000 m2. Prime rents continued at their levels of between €5.75/m2/month and €6.75/m2/month. Nevertheless, the report from Aguirre Newman highlights that one operation was closed in the Zona Franca Consortium with a rental price above the prime rate indicated.

Leasing of logistics space soars in Valencia

Moreover, during the first nine months of the year in the Valencia metropolitan area, 135,250 m2 of logistics space was leased. That figure represents an increase of 35% with respect to the same period a year earlier, according to BNP Paribas Real Estate.

In that region, demand focused primarily on the town of Ribarroja, which accounts for 80% of the surface area leased (…).

Original story: El Inmobiliario Mes a Mes

Translation: Carmel Drake

RE Experts Warn That The Cataluña Situation Is Seriously Affecting Investment

17 October 2017 – Expansión

The Spanish Association of Real Estate Consulting Companies (ACI) says that the “serious” situation currently being experienced in Cataluña is affecting the normal evolution of the real estate market since investors are fearful.

The Spanish association of real estate consultancy firms, comprising domestic and international companies alike, such as CBRE, Aguirre Newman/Savills, Cushman & Wakefield, JLL, Knight Frank and BNP Paribas, warned yesterday of the consequences that the secessionist challenge is having in the real estate market.

Specifically, the association chaired by Ricardo Martí Fluxá said that “the serious situation” in Cataluña at the moment, is affecting the strong performance of the Spanish real estate market as a whole. Until the third quarter, the volume of investment in real estate assets was registering record figures, at €10,300 million, up by 58% compared to the same period a year earlier. “The latest developments are seriously affecting the normal operation of investment activity and the evolution of our real estate market”, they warned.

For this reason, the real estate consultancy firms have called for respect for the laws, appealing to the Generalitat to abide by the order established in the Constitution. “Our association joins the large number of companies, institutions and entities that are calling on the Generalitat to comply with the provisions of our laws and abide by the order established in the Constitution”, they said in a statement.

The warning from the large real estate consultancy firms follows a statement made just a few days ago by the CEO of Lar España, one of the five large Socimis whose shares trade on the (main) Spanish stock exchange.

The CEO of the listed company, Miguel Pereda, said that if his firm had to make an investment in Cataluña today, it would “probably” not go ahead with it, in light of the political situation regarding independence.

Meanwhile, on 5 October, the ratings agency Moody’s issued a report warning that the “growing political tension” may negatively affect the credits interests of the Socimis Merlin and Colonial, given that the entities hold 13 % and 19% of their respective portfolios in Cataluña.

Indeed, Colonial is one of the listed companies that has moved its corporate headquarters from Barcelona to Madrid because of the secessionist challenge posted by the Catalan Generalitat.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

The Alternative Asset Boom: Student Halls, Co-Working Spaces & Data Centres Are On The Rise

26 September 2017 – Eje Prime

2017 is going to be remembered in the real estate sector as the year of alternative assets. A large number of corporate operations in the student housing segment and healthcare sector means that investors are looking more carefully at these products. So much so that 44% of international investors say that they plan to spend money acquiring these kinds of assets over the next few years.

One of the main reasons for focusing on these types of investments is geographical behaviour and demand, important for 69% of the international funds surveyed. The next most important reason, for 46% of investors, is the stability of the returns from such investments, according to the Emerging Trends Europe 2017 study prepared by PwC. Diversification and high yields are also reasons for 46% and 45% of investors, respectively, according to the findings of the report.

For 61% of investors, the student housing business has one of the most promising outlooks, in that case, due to the demand from the demographics. “It is important to highlight that this looks like being a secular trend rather than a cyclical one”, explain sources at PwC.

Nevertheless, the corporate operations that have been carried out in recent months in the sector support this trend. The most recent saw Azora, Artá Capital, March Campus (Banca March’s client investor vehicle) and Mutua Madrileña, reach an agreement to sell Grupo Resa to a group of international investors, represented by Axa and CBRE. Even so, and although these kinds of assets are on the rise, only 23% of the funds specialising in real estate hold such properties in their portfolios.

After student halls of residence come hotels. 51% of investors have either acquired or have been exploring the possibility of investing in this kind of asset. In Spain, the Socimi Hispania has decided to specialise in this type of asset, whereby positioning itself as one of the largest companies in the hotel segment in the country.

Nursing homes for the elderly and clinics (healthcare) have also been gaining in importance during 2017 and will be the assets to watch in coming years (…).

One recent operation involving this kind of asset in Spain saw Healthcare Activos Investment acquire the Los Tilos nursing home for €15.5 million, in a transaction brokered by BNP Paribas Real Estate (…).

The most alternative assets

Within the group of alternative investments identified by PwC are some that break the mould due to their lack of history in the real estate sector. One of them is shared offices, also known as co-working spaces. In recent months, they have sparked interest amongst investors of all kinds, with operators such as WeWork and Spaces leading the way (…).

Last week, Spaces, an international workspace company, announced that it is going to open an office measuring 1,511 m2 in Madrid, at number 4 Calle Manzanares, known by the group as Spaces Rio. And within the next few weeks, it will open a new Spaces centre in Barcelona (in the 22@ district).

Meanwhile, WeWork confirmed its arrival in Spain earlier this month. The company, which specialises in the management of coworking spaces, has leased an office building in the 22@ district in Barcelona (…).

Finally, data centres, where data servers are managed and stored, have also seen their profile rise in the real estate business. These types of asset, which are mostly located on the outskirts of major cities, are expected to capture the attention of 15% of investors this year (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake