Nuveen & Value One Join Forces to Invest €600M in Student Halls

11 March 2019 – Eje Prime

The investment manager Nuveen Real Estate, which owns 50% of the Xanadú shopping centre in Madrid, has teamed up with the Austrian real estate firm Value One to create a new investment vehicle with €600 million to spend on the promotion and management of student halls in Europe.

The new company already has three assets, in Vienna, Lisbon and Porto, which the companies expect to launch within the next two years.

Under the terms of the agreement, Nuveen is the investment advisor, Value One is the property developer and Milestone, a subsidiary of Value One, will be the operator of the properties once they are up and running.

Original story: Eje Prime

Translation/Summary: Carmel Drake

Madrid’s Town Hall Definitively Approves the Mahou-Calderón Development

15 November 2018 – El Confidencial

The final piece of the puzzle has fallen into place. The Governing Board of the Town Hall of Madrid has definitively approved the urbanisation plans for the Mahou-Calderón project after the corresponding period of public consultation came to an end on Thursday. This means that the owners of the land can now start work. The plenary of the Town Hall will ratify the final project over the coming weeks, although the claims phase is not, in theory, expected to alter the plan initially approved in July: it involves a budget of €42.2 million, will see the transformation of 193,804 m2 of land in total and will be executed in three phases in just under three years. The first phase will involve the demolition of the stadium.

The demolition of the Atlético de Madrid’s temple, an operation that will cost €22.4 million, will be the first piece of work to be carried out, with the exception of the stand located above the M-30, which will remain in place to interfere as little as possible with the traffic on that road. Subsequently, the traffic from the motorway ring-road will be diverted so that the stand can be demolished. The first stage will also include the urbanisation of the roads between Paseo de los Pontones, Paseo Imperial and Paseo de los Melancólicos.

Once those first projects have been concluded, phase 2 will begin, which will see the reorganisation of Paseo de los Melancólicos and Calle Duque de Tovar, with a budget of €7.7 million. Finally, the third phase, with a final budget of more than €12 million, will include the creation of a new park by the river, which, in any case, will come after Calle-30 has been covered over, by the Town Hall. Specifically, the Town Hall has committed to providing €60 million to finance the work to cover over that road, a budget that is separate from the urbanisation project that has been approved today because it was agreed that it would be processed independently.

The Governing Board chaired by Manuela Carmena gave the final green light to this project today, which is going to be financed by the Compensation Board that comprises the landowners (Atlético and Mahou). The surface area of the space is broken down into two sections, one of which is dedicated to residential and tertiary use, and the other to roads, green areas and basic amenities.

The land dedicated to residential use occupies 33,339 m2 (with a buildability of 132,344 m2) of which 13,243 m2 will be for social housing properties, which represents more than 11% of the total. Meanwhile, tertiary use land will have a buildability of 14,705 m2. Finally, the land dedicated to social uses will span 13,893 m2 for public amenities. In addition, 73,099 m2 will be dedicated to green space and 73,469 m2 to roads .

In any case, this final procedure paves the way for the construction work to begin and for one of the major urban planning operations in the city to be unblocked. It has been in the hands of the Department for Sustainable Urban Development, led by José Manuel Calvo. As this newspaper published in the summer, the initial approval of the plan – which today received definitive approval – was a key step for the plans of Atlético de Madrid. The football club suspended the process to sell its urban planning rights in January, as it was waiting to be able to offer the three interested finalists – Solvia, Ibosa and Princeton – a series of guarantees, including the reparcelation and urbanisation project, amongst others.

With the sale of its urban planning rights, Atlético de Madrid is hoping to raise almost €200 million, an amount that it is hoping to use to repay the Mexican businessman Carlos Slim for the €160 million loan that he granted  to Enrique Cerezo’s club to finance the completion of the construction of the new stadium, the Wanda Metropolitano (…).

Original story: El Confidencial (by Paloma Esteban)

Translation: Carmel Drake

BMB Launches a Socimi to Invest €100M in Industrial Warehouses

16 October 2018 – Eje Prime

BMB Investment Management is betting on the tertiary sector. The fund manager is finalising the launch of a new Socimi to invest €100 million in the purchase of industrial warehouses.

After entering the residential market with two Socimis (Optimum Re Spain and Optimum III Value-Added Residential), the company led and chaired by Josep Borrell is now looking for higher returns with its latest firm, Optimum Rentals Socimi. This new investment vehicle will focus on the acquisition of assets that offer returns of between 6.5% and 10%, according to reports from Expansión.

The intention of BMB is that 80% of the budget will be allocated to the purchase of industrial warehouses, leased to solvent tenants and located in the industrial parks of Madrid and Barcelona.

Similarly, although Borrell rules out investing in logistics, he does not shy away from the idea that the fund may also take advantage of an opportunity or two in the residential sector or even in the hotel or retail markets.

Optimum Rentals Socimi is starting life with an initial budget of €100 million, of which €50 million will proceed from own funds and the remainder, from bank financing. Sources at the manager confirm that the plan is to maintain the fund in an independent way so that it will live off of its own income. Investors in BMB’s third Socimi are expected to include both institutional and real estate players, and the percentage of international capital is expected to be high.

Original story: Eje Prime

Translation: Carmel Drake

Government & Podemos Agree to Allow Town Halls to Regulate Rental Prices

11 October 2018 – Eje Prime

The Government has said yes to public control of the rental market in Spain. The Executive led by Pedro Sánchez (below left) has agreed to the regulation of rental prices by Town Halls, according to explanations provided in a Budget agreement reached on Thursday by the PSOE and Unidos Podemos. The measure is established provided its application is “temporary and exceptional” and is carried out only in those urban areas where there has previously been an “abusive increase” in rents.

Rent has formed the focus of the new Government’s action plan in terms of housing. In parallel to the regulation of prices, the Executive has announced that it will advocate the extension of the minimum term of lease contracts from three years to five, and, in those cases where the owner is a legal entity, the lengthening of the commitment between landlords and tenants to seven years. Moreover, the tacit renewal of contracts will be increased from one year to three, provided the intention to not renew the agreement is communicated by either of the two parties at least six months before it is due to terminate.

In addition, the PSOE and Unidos Podemos have agreed that damage deposits (fianzas) to enter rental flats will be capped at a maximum of two months and that the signing of bank guarantees will no longer be demandable by landlords. In the event that an owner wants to recover his home before the term agreed with the tenant, then that scenario must be formally explained in the contract in force.

More funding for the development of rental housing

The agreement, which will now have to be approved by Congress, includes a measure that supports the development of public housing. In the event that it receives the green light from the chamber, the Government will increase the housing budget for next year to €630 million. In 2020, it will increase that pot further still to €700 million and in 2021, to €1 billion. According to the text, in ten years, Spain will invest between 1% and 1.5% of its Gross Domestic Product (GDP) in public housing.

One of the objectives of the public housing plan is “to avoid “homes” from being sold to vulture funds or sold for a profit”, so as to ensure that “particularly vulnerable people” have the possibility of accessing a rental home.

Original story: Eje Prime

Translation: Carmel Drake

The Countdown Begins to Energy Efficient Social Housing

14 September 2018 – El Mundo

The revised Technical Building Code (CTE) is going to be published soon in Spain, in line with similar developments in other European countries. In addition to standardising a new way of building, the revised code is going to incorporate the definition of nearly zero energy buildings (EECNs), which will introduce much more demanding parameters than are currently in place.

Private property developers know that from 31 December 2020 onwards, all of the new properties that they build will have to comply with those guidelines. They are demands that come from Europe and that also affect new buildings that are occupied and publicly owned, including social housing. Those buildings must comply with the energy requirements from 31 December of this year.

But, are the Public Administrations prepared? According to Inés Leal, Director of the Nearly Zero Energy Building Congress, “the large cities are better equipped to handle the implementation of nearly zero energy buildings than the smaller towns, which may find it harder to achieve the objectives”.

Although there are not many constructed EECN public housing projects, the buildings certified under the Passivhaus standard have become the closest example of nearly zero energy buildings.

Adelina Uriarte, President of the Passivhaus Building Platform (PEP), believes that the different administrations have the capacity to adapt to the guidelines of European legislation in this regard. What’s more, she adds that “those with the greatest predisposition have already done so ahead of the established deadline”.

One of them is the Town Hall of Madrid, which wanted to set the example and anticipate the 2019 deadline. Thus, at the Municipal Plenary on 25 May 2016, an agreement was unanimously adopted which assumes that all new buildings that are planned, and even those that are already standing that have to undergo an extension or a comprehensive renovation, must be positive from an energy perspective (…).

Financing and costs

In terms of financing, the experiences involving public housing already undertaken in Spain are demonstrating that EECNs are economically viable. In fact, according to Germán Velázquez, Partner at VArquitectos, a public building can be made nearly zero energy efficient with the same budget. And he justifies it: “The current legislation demands several issues that no longer represent an extra cost for developing ECCNs; the key is in the drafting of a good set of plans to ensure that the euro ratios per square metre are equivalent to those of a conventional building”. In his experience, the average cost per square metre amounts to around €650/750 in a conventional public building compared with €700/800 that it costs to construct a public EECN (…).

Original story: El Mundo (by Juanjo Bueno)

Translation: Carmel Drake

Galicia Awards 1.1 million m2 of Industrial Land Supported by Aid from La Xunta

6 June 2018 – Eje Prime

La Xunta is promoting the sale of industrial land and Galicia is whereby reaching pre-crisis occupancy levels in the logistics sector. In total, 1.1 million m2 of logistics land has been awarded in the autonomous region, which represents almost 40% of the total available land for sale in 2015.

Amongst the measures adopted by La Xunta in 2018 include the elimination of regional taxes for the purchase of industrial land from the administration, with a 100% deduction of the Property Transfer Tax and Documented Legal Act Tax, according to Inmodiario.

The intention of the territorial government is, in addition to promoting the entry of new players into Galicia, facilitate the reactivation of disused industrial plots. In those cases, La Xunta adds discounts to the land prices of between 30% and 50%.

The Councillor for Infrastructure and Housing at La Xunta, Ethel Vázquez, anticipates that 2018 “will continue along the same path”. Not in vain, her portfolio has received a significant increase in budgeted aid, of 16.5%, achieving an additional €60 million taking the total fund to €424 million.

Original story: Eje Prime

Translation: Carmel Drake

Grosvenor Backs the Rental Sector in Spain & Formalises its First Purchases in Madrid

1 June 2018 – Eje Prime

Grosvenor is betting on a business that is on the rise in Spain: the residential rental market. The group, which is going to spend €200 million on its growth plans in the country between now and 2022, as Eje Prime revealed, has recently acquired a building on Calle Rey Francisco, in the Madrilenian neighbourhood of Argüelles, which it is going to rent out.

The property in question is a protected building, located in an area that is very close to the university centres, and which the company hopes to renovate to create rental homes and convert the existing commercial premises into common areas, according to Expansión. In total, the building will have 23 homes, some of which are currently let out under the old rent system, whose tenants will be maintained by the British real estate company.

To give continuity to its business in Spain, Grosvenor will allocate more than €200 million to purchases, together with the Malaysian group Amprop, with which it has created a joint venture in the country. The group’s objective is to double its asset portfolio between now and 2022, according to James Raynor, CEO of Grosvenor, speaking to Eje Prime in an interview.

Grosvenor’s most ambitious plans in Spain include new purchases. The group, which has an office in Madrid and employs eight people in the country, has increased its investment capacity through its joint venture company with Amprop, created last year to build luxury apartments in Madrid, to €200 million.

The objective of the alliance with Amcorp is to back value-added investments, whereby assuming the associated risk but also receiving higher returns. The two groups have allocated a budget of €70 million for these types of projects, although they have reviewed the numbers thanks to the opportunities on offer in the Spanish market.

Original story: Eje Prime 

Translation: Carmel Drake

Urbania Raises €300M to Invest in Real Estate

9 May 2018 – Expansión

The residential property developer Urbania is going to invest €300 million over the next two years in homes and student halls of residence. Following a stage during which it has alternated between residential development and the purchase, renovation and sale of buildings, it considers that now is the right time to leave that formula to one side and focus on the development of land right across Spain to construct homes and build halls of residence for students.

To this end, it has divested some of its renovation projects, such as the building located at numbers 329-331 Avenida Diagonal in Barcelona, which it has sold to a local family office and an Israeli fund for €35 million.

Currently, Urbania is working with four overseas funds to build more than 2,000 homes all over the country, worth €450 million. The group has structured a new vehicle in which Urbania holds a stake for each one of the four overseas funds with which it works on a regular basis in order to invest up to €100 million in the acquisition of land in the main Spanish cities.

Moreover, Urbania has a budget of €200 million for its student hall of residence division, which it is operating under the Syllabus brand and which it plans to increase from its current volume of 1,500 beds to 4,000 beds.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Town Hall of Barcelona to Build 150 Social Housing Flats in Former Urban Prison

7 May 2018 – Eje Prime

La Modelo is going to change its colour: it will turn from the grey of its former railings to the green of its new parks and family homes. That is the plan that the Town Hall of Barcelona wants to carry out with the urban prison that said goodbye to its last inmates last June. Since then, the Town Hall has been holding regular meetings with local residents and entities to build social housing properties on the land that has been left in disuse, amongst other aspects. The Town Hall’s current idea is to build 150 flats on a plot of land measuring 15,000 m2.

In total, the prison used to cover a plot measuring 27,657 m2, of which the Town Hall plans to use almost half, 14,000 m2 to develop a park that will add some much needed green space to the Eixample area in which it is located.

The first draft of the plans that the municipal government presented in the most recent meeting is one of three possible plans that the Town Hall is considering. It is the preferred option of the Town Hall led by Ada Colau, who will provide more details about the project in July, according to Idealista.

The work to urbanise the plot is not expected to begin until 2020, and so the plans may well undergo several iterations yet, although all three plans involve building public housing, green space and a section that will serve to preserve the historical memory of the 100-year old prison. What is known at this stage for certain is the amount of investment that the Town Hall is going to allocate to the project: €4.9 million, which has already been included in the current mandate, which ends in 2019.

Original story: Eje Prime

Translation: Carmel Drake

Grosvenor Will Invest €200M to Double its Portfolio in Spain by 2022

25 April 2018 – Eje Prime

The British group Grosvenor is taking advantage of the strong performance of the real estate sector in Spain. The company, which has just presented its financial results for 2017, revealing a record profit of GBP 143.5 million (€163.8 million), has revised its plans for Spain. It is now going to spend more than €200 million on purchases, together with the Malaysian group Amprop, with which it owns a joint venture in the country. The group aims to double its portfolio of assets between now and 2022, according to James Raynor (pictured below), CEO of Grosvenor, speaking to Eje Prime.

“In 2017, we increased our potential in the residential sector, specifically in Madrid, where we undertook six acquisitions for development”, explained Raynor. “Our intention is to transform under-utilised assets into properties that contribute to the growth and dynamisation of the neighbourhoods in which they are located, and we have faith that our first projects in the districts of Salamanca and Chamberí will do just that”, he added.

Grosvenor’s most ambitious plans in Spain include its new purchases. The group, which now employs eight people in the country after it opened an office in Madrid, has increased its investment capacity to €200 million through its joint venture together with Amprop, created last year to build luxury homes in Madrid. “We will also evaluate investments outside of the joint venture”, added the director.

The alliance with Amprop set itself the objective of backing value-added investments, where it assumes high risks but also assigns them high profitability. For these types of projects, the two groups have allocated a budget of €70 million, although they have reviewed the numbers thanks to the “opportunities being offered by the Spanish market”, explained the executive.

Grosvenor evaluates its last year in Spain as “a good year”. (…). “Having expanded our team, we have more power to unlock opportunities that would have been impossible without the experience of professionals in the sector. We have also been making progress with projects such as the one we have underway at number 53 Jorge Juan”, explained Raynor.

Over the coming months, the British group is going to continue “to look for investment opportunities in the main neighbourhoods of Madrid”. “We think that this is the perfect time to invest in residential developments in Spain and in repositioning opportunities, although we are also open to the acquisition of mixed-use assets, as well as retail properties and offices”, says Raynor -; “As an investment company, we have a diverse portfolio and extensive experience in all of the real estate sectors, and so we will take advantage of that know-how to find the most appropriate opportunities to suit us (…).

The fund has been led in the Spanish market by Fátima Sáez del Cano since 2007, although its operations in the country date back to 1996. The director leads the fund specialising in the office and commercial sectors, which is also responsible for the management of the funds and assets. Some of the properties under Grosvenor’s management in Spain include the Islazul shopping centre in Madrid and the Anecblau complex in Barcelona (…).

In addition, in recent months, Grosvenor decided to add new blood to its management team by hiring more directors. In September, the group recruited Javier García as the new Technical Director for the Spanish market. The director is responsible for the technical management of operations in Spain, from the control of the design to the monitoring of project costs and deadlines (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake