Apollo Negotiates Purchase of 14 Offices in Madrid from Merlin

23 October 2018 – Expansión

Apollo is maintaining its interest in the Spanish real estate sector and is considering increasing its footprint in the capital with the purchase of an office portfolio from Merlin. Specifically, the US investment fund is analysing the acquisition of a portfolio comprising 14 office buildings and business complexes located, for the most part, in secondary business areas of Madrid, according to market sources speaking to Expansión.

When consulted on the matter, both Merlin and Apollo declined to comment about the operation.

The offices, which together span a gross leasable area of 126,900 m2, were worth more than €300 million at the end of June 2018. The buildings are located in well-known business districts of Madrid, such as Sanchinarro, Manoteras, Arturo Soria and Avenida de la Ilustración, amongst others. Merlin inherited most of the assets following the integration of Metrovacesa’s real estate business, after the merger of the two groups in 2016.

The assets that Apollo is considering buying include the office building located at number 94 Calle Santiago de Compostela, next to Avenida de la Ilustración, which has a surface area of 13,130 m2; the Euronova business park in Tres Cantos, which has a surface area of 32,663 m2; a property located on Travesía de Costa Brava, in Mirasierra, measuring more than 16,000 m2 and leased to El Corte Inglés; and an office complex comprising two buildings on Calle Francisca Delgado, in Alcobendas, with a combined surface area of 10,896 m2.

Interest

If this operation goes ahead, Apollo, which has put Altamira up for sale, would be committed to Spain again. The investment fund, which made its debut in the country through the European Principal Finance Fund II – the vehicle that acquired 85% of Altamira at the beginning of 2014 and Evo Banco soon after – recently launched the third version of that European fund.

Specifically, as Expansión revealed on 8 October, Apollo has launched the European Principal Finance Fund III, containing almost $5 billion (€4.35 billion based on the current exchange rate). Some of that amount will be allocated to Spain (…).

Original story: Expansión (by R. Arroyo & D. Badía)

Translation: Carmel Drake

Tech Firm Keysight Leases 2,000 Square Meters of Office Space in PTA

10 October 2018

Iberdrola Inmobiliaria has leased space in its Malaga Business Park, located within the Technological Park of Andalusia (PTA), to the American multinational Keysight.

Malaga is still on a roll. The capital of Malaga is no longer just on the map of the Spanish real estate market because of its residential sector, as evidenced by Iberdrola Inmobiliaria’s rental of 2,200 square meters of offices to the US multinational Keysight Technologies.

The Californian company will take over space in several buildings in the Malaga Business Park, located within the Technological Park of Andalucía (PTA). The operation is one of the largest this year in the province, by volume, and also completes the occupation of the office complex.

Keysight will now become a neighbour to other large corporations such as PwC, Riplife Gaming Technologies, Unitono and Eurocem, as noted by Iberdrola’s real estate arm. In its entirety, the Malaga Business Park has 18,000 square meters of constructed area.

This most recent transaction is a reflection of the growth of the office market in the city of Malaga, where the occupation of its prime areas exceeds 90%, as EjePrime reported last March. The Malagan office market saw significant demand in the central zone and the financial area of ​​the capital in 2017. In these two areas, the stock of available offices was significantly reduced, which led to an increase in rents to 18 euros per square meter in the central street Larios, according to a report by Savills Aguirre Newman.

Original Story: EjePrime

Translation: Richard Turner

A Third of the León’s Business Land is Already Under Development

6 October 2018

Almost half of the land available in business parks and industrial states has already been sold, and less than 18% is still available.

A third of the land in León that is zoned for business uses is already currently under development, while almost half has already been sold and a little less than 18% is still waiting for economic initiatives. However, the occupancy of industrial land presents significant differences in saturation and demand between some industrial estate and others. The reduction in the price of some of these lands seems designed to encourage the installation of certain initiatives, though the preferences of employers are also clear when selecting a location, and they are not always related to the price.

In general, it has not been easy to absorb the “significant expansion of industrial land generated between 2004 and 2007 by all operators, which doubled their supply,” the Economic and Social Council of Castilla y León noted. This affects the excess land available in the industrial estates promoted by the municipality, whereby, on the whole, the Community tripled the supply of business land, “becoming the largest operator at the regional level, with more than a third of the total supply” in the market.

In the case of the province of León, that supply was added to the investment of mining funds in this type of infrastructure in the basins, which increased the available supply of land at a time when the financial crisis began to take hold. The result was that more than half of the industrial parks in the province have less than ten companies operating in them, and many of them have not managed to bring in a single tenant, according to an analysis carried out by the Association of Owners and Entrepreneurs of the Leon Industrial Estate. (Apepil).

According to CES, there has been a “strong push” in the sale of industrial land since 2016, which means that on average the occupancy rate in the Community has reached 60%.

This percentage has not been reached in the province, according to the data of the council the occupancy rate in the business land in the province is 49.5% (something more than seven million square meters); while almost 4.7 million are in the project phase, 33% of the total. The rest, just over 2.5 million, which accounts for less than 18% of the land, is still available.

In total, the province’s business land adds up to almost 19.6 million square meters and is the third largest supplier of infrastructure of this type of the Community, behind Valladolid and Burgos, which head the regional ranking. More than five million square meters are non-exploitable surfaces (green areas, roads, sidewalks, roundabouts, …).

In the case of León, the town councils that have developed most of the land for “industrial” use (though industries are not always installed); with more than 7 million square meters spread over 27 industrial estates. Initiatives by municipal and private capital add another seven industrial estates and almost another two million square meters.

The Institute of Business Competitiveness (ICE, former ADE) of Castilla y León, a subsidiary of the Junta, totals more than 4.7 million square meters, and more than one million of them are still available despite the price reduction of available land approved by the Junta more than two years ago, in April 2016.

The infrastructure developed by the private sector also have an important weight, almost three million square meters, of which only one million are occupied. The best performance was obtained by the state industrial land agency Sepes, which has almost 2.9 million square meters in its industrial estates in León, and an almost non-existent available area compared with the rest of the developers.

The CES noted that a year ago, the plenary session of the Cortes unanimously approved the promotion of the León Technology Park.

Original Story: Diário de León – María J. Muñiz

Photo: Ces. Ramiro

Translation: Richard Turner

SEA Sells 43,141m2 Of Industrial Land For €2.1M

25 April 2016 – El Economista

The public company Suelo Empresarial del Atlántico (SEA), owned by the Ministry of Development, through Sepas, has sold 43,141 m2 of industrial land as the result of a public tender that was convened at the beginning of the year.

According to the Ministry of Development, a new public auction was convened at the beginning of the year whose result has involved the sale of 15 new plots of land for €2.1 million.

The company has just approved its annual accounts for 2015, with a positive net result of €431,044.

According to the data published, the company has sold 28 plots in total, spread across 10 business parks, with a combined surface area of 81,087.96 m2, for €3.6 million.

Original story: El Economista

Translation: Carmel Drake

Oaktree Enters Exclusive Negotiations On Project Gaudi For c.€500m

13 April 2015 – CoStar Finance

Oaktree Capital Management has entered exclusive negotiations with FMS Wertmanagement for the predominantly Spanish Project Gaudi commercial real estate loan portfolio for a price thought to equal just over €500m, CoStar News has learned.

Negotiations are ongoing and the Board of FMS Wertmanagement is still to approve the sale, but Colony Capital, the second finalist, is no longer in the running to acquire the bad bank’s prospective maiden European NPL.

Project Gaudi, named after the legendary Catalan architect, has an unpaid balance of €740m, and is expected to trade at around 68 cents in the euro.

Cerberus Capital Management and Orion Capital Managers made up the top four, as revealed by CoStar News at the turn of the New Year.

Project Gaudi loan portfolio, which is being sold by Cushman & Wakefield’s Corporate Finance team in London, is comprised of 18 loans with broadly an equal split of performing, sub-performing and non-performing loans.

Project Gaudi, comprised of 16 loans secured by Spanish assets and two loans secured by Portuguese commercial properties, includes:

  • two five-star hotels in Barcelona and Cascais;
  • five shopping centre and leisure centres;
  • four business parks in Madrid and Barcelona;
  • a portfolio of 17 self-storage assets; and
  • several residential and industrial development sites.

The marquee asset in Project Gaudi is the 483-bed Hotel Arts in Barcelona (pictured), managed by Ritz-Carlton.

A consortium comprised of Host Hotels & Resorts, Dutch pension fund Stichting Pensioenfonds ABP and Jasmine Hotels Pte, an affiliate of Singapore sovereign wealth fund’s GIC Real Estate paid €417m in July 2006 for Hotel Arts, which at the time was the largest ever single-asset real estate transaction in Spain.

FMS Wertmanagement, founded in 2010 after the German government nationalised Hypo Real Estate, brought the Project Gaudi loan portfolio for sale in October.

The four second round finalists all placed bids above 60 cents in the euro, which reflects a price of €444m or above.

First round bidders included Davidson Kempner in a joint venture with Värde Partners, Blackstone, Deutsche Bank, Marathon Asset Management, Sankaty Advisors, BAML, Colony Capital, Starwood Capital, Apollo Global Management and Lone Star.

FMS Wertmanagement had as much as €13.4bn in remaining commercial real estate loans, as at the end of 2013, including €5.8bn of German loans, €1.8bn of US loans, €1.7bn worth of UK commercial real estate loans and €0.8bn and €0.6bn of loans secured by assets in France and Netherlands, respectively.

Spain has returned to economic growth in 2014 following seven difficult years of rising unemployment, salary deflation and depressed consumer spending.

But an increase in business activity has led to unemployment reducing and consumer confidence has reached its highest level since 2001 with improvements in disposable income and recovering house prices reinforcing this optimism.

All parties declined to comment.

Original story: CoStar Finance (by James Wallace)

Edited by: Carmel Drake