M&G Real Estate Buys 16 Santander Branches For €56.2M

25 May 2017 – El Economista

The fund manager M&G Real Estate has signed another deal in Spain, this time to become Banco Santander’s new landlord. Specifically, the firm has just signed an agreement with the Socimi Uro Property to acquire 16 of the financial institution’s branches for which it has paid €56.2 million.

The operation, which was closed at a premium with respect to the most recent valuation of the transferred portfolio, also includes the granting of a call option over another branch, which may be executed in the short term.

According to the Socimi, which owns approximately one-third of Banco Santander’s branches, the portfolio that M&G has purchased generates annual rental income of €3.04 million and comprises seven branches from the so-called Blue portfolio and nine from the Green portfolio.

The classification of the branches into these portfolios reflects the maturity dates of the corresponding rental contracts. Thus, in the first case (Blue portfolio), the lease contracts are due to terminate in 2045, 2046 and 2047, and may be extended for another seven years. In the case of the assets included in the Green portfolio, the lease contracts are due to mature between 2036 and 2038.

These terms of 30 and 20 years, respectively, match the British manager’s investment strategy, given that it seeks safe, long-term operations. In this way, the firm’s first operation in Spain was closed in 2015, when it acquired Telefónica’s former headquarters in Madrid, located in the heart of the city on Calle Ríos Rosas. It paid €175 million for that property, which is now the headquarters of WPP.

Following the sale, Uro will continue to own a portfolio of bank branches whose approximate value amounts to €1,893 million. When the Socimi debuted on the stock market, in March 2015, it managed 1,136 Santander branches, nevertheless, in April 2015, it sold a portfolio of 381 branches to Axa Real Estate for €308 million, leaving 755 branches, which cover a surface area of more than 340,000 m2.

Original story: El Economista (by Alba Brualla and Javier Mesones)

Translation: Carmel Drake

The Luksic Family Buys Hotel Adler In Madrid

22 December 2016 – El Confidencial

It is located on one of the most important corners in Spain. The intersection of Calles Velázquez and Goya has been home to the Hotel Adler for decades. It is one of the most ancestral establishments in Madrid, renowned for its restaurant, Nimú Bistró, and for its maximum discretion, a virtue that led it to host some of the most important business people and politicians in the country.

Reigned over by the Vázquez family, one of the most important entrepreneurial dynasties from Castilla y León, the property said goodbye to its last client this week and on Sunday, according to sources in the know, it will finish making all of the staff redundant; the employment contracts are more than a decade old in many cases.

This drastic decision is the result of the sale of the building, in an operation that began to take shape, with the discretion that characterises the Adler, four years ago, and which has been finalised this month, with the closure of the establishment.

In December 2012, the Luksic family, the wealthiest fortune in Chile and one of the most important in the world, acquired the hotel’s presidential suite by purchasing the property that houses it for almost €27 million. Nevertheless, the Vázquez family reserved the right to purchase it for five years and manage the hotel for the same period, which means that, initially, it will only receive a profit of €8.4 million from this operation.

Over the next two years, a special plan was processed to change the use of the property to retail and offices, work that was performed by Ruiz Barbarin Arquitectos (…).

In December 2015, the Vázquez family declined to exercise its call option, two years early, and sold the property for €19 million “by virtue of a contract signed with Topland Investments”, according to a statement in the audit report for the company Iova, through which the family used to control Hotel Adler.

Behind Topland Investments is Sandypoint, one of the many entities that comprises the Luksic’s emporium, whose fortune amounts to $12,100 million (€11,600 million), according to Forbes and whose flagship company is Antofagasta, the copper mining giant, which is listed on the London Stock Exchange.

Although that is the main business, the Luksic family has also been building up its hotel emporium over the last two decades, focusing above all on Croatia, where it has become the largest operator in the country through three companies: Adriatic Luxury Hotels, Plava Laguna and Istraturist.

In Madrid, by contrast, it seems to have other ideas and after obtaining approval for the special plan to change the use of the property, it is expected that the sought-after corner of Goya and Velázquez will become home to a major fashion firm, although the option of turning the building into offices has not been ruled out.

Hotel linked to a family

In 1998, the late Antonio Vázquez Cardeñosa acquired the property at number 31 on Calle Goya, with the idea of converting it into a luxury hotel, with an investment, to cover the purchase price and the renovation, of 2,000 million pesetas at the time (equivalent to €12 million at current prices).

Two decades later, the property has changed hands and use, although the Vázquez family plans to open another establishment in a new location in the capital. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Ortega Finalises Purchase Of Torre Cepsa For €500M

9 September 2016 – Expansión

The countdown has begun to one of the major operations of the year in the real estate sector. Ipic (International Petroleum Investment Company) – the Abu Dhabi state fund that owns the oil company Cepsa, the current tenant of the property – has notified Bankia of its intention to exercise its purchase option over Torre Cepsa, according to sources close to the operation.

The exercise of this call option unblocks the process that Ipic initiated several months ago, as part of its plan to execute the option to acquire the building and then sell it on to a third party almost immediately. On the basis of the offers received, the Arab Emirate fund has favoured the bid submitted by Pontegadea – the investment arm of Amancio Ortega.

Ponteagadea, which has become one of the largest real estate investors in Spain and overseas, is the clear favourite to purchase the property, which is located in the Cuatro Torres complex on Paseo de la Castellana (Madrid). Amancio Ortega, who is backed by the financial strength of his stake in Inditex, has offered to pay around €490 million for the property.

In October 2013, Bankia signed an agreement with Ipic to lease the tower that it owns, through its stake in Torre Norte Castellana. The lease contract was signed for a period of eight years, which may be extended by another seven years, on an annual basis.

Similarly, this agreement included a future call option, whose execution deadline is due to expire at the end of this month. Specifically, the expiry of this right drove Ipic to launch a process to look for investors interested in acquiring the asset. Ipic operates as a sovereign fund to channel energy investments from the Abu Dhabi Government.

According to Bankia’s audit report for 2015, the book value of the property is €384 million. That figure falls below the range of €400 million to €450 million at which the skyscraper was valued in 2013, when Bankia and Ipic signed their agreement.

Pontegadea is the second largest private real estate investor in Spain, with assets worth more than €6,000 million….surpassed only by Merlin (…). Amancio Ortega’s bid for Torre Cepsa is the favourite, but it is not the only one.

Other interested parties

Since the process to sell Torre Cepsa began, the asset has sparked interest amongst funds and investors, both at home and overseas.

The domestic players that have expressed interest in the asset include the Spanish Socimi Axiare. This real estate investment vehicle, which specialises in the office segment, held a portfolio of assets worth €1,048 million at the end of June.

One of Axiare’s main rivals is Merlin, the current owner of Torre PwC (previously known as Torre Sacyr Vallehermoso), which houses the headquarters of the professional services firm chaired by Gonzalo Sánchez, as well as the five-star Eurostars Madrid Tower hotel.

Torre Cepsa has 34 storeys and a surface area covering more than 109,000 sqm, of which 72,300 sqm corresponds to offices. The remaining space comprises five floors of parking.

Original story: Expansión (by R. Arroyo/M.A. Patiño)

Translation: Carmel Drake

Ipic Finalises Sale Of Torre Cepsa For €500M+

3 May 2016 – Expansión

Ipic, the Abu Dhabi state fund behind the oil company Cepsa, is trying the sell the so-called Torre Foster for a price that could range between €500 million and €600 million.

Ipic is negotiating with a small group of foreign funds, including, some investors from the Middle East. The operation will mark a milestone in the new boom that the real estate sector in Spain is currently experiencing and will serve to boost other projects currently on the horizon, such as the so-called fifth tower, which the businessman Juan Miguel Villar Mir wants to construct in the Cuatro Torres complex, where the Foster skyscraper is located.

That price is significantly higher than the figure of between €400 million and €450 million that the Torre Foster, now renamed Torre Cepsa, given that it houses the headquarters of the oil company, was valued at when Ipic signed a call option to purchase the building from Bankia back in 2013.

That option has not been exercised yet. It will be exercisable after the summer. Hence, Ipic has accelerated the negotiations to acquire the building and, almost immediately, sell it on to a third party. Technically, the property is still owned by Bankia.

Gain for Abu Dhabi

The additional value that Ipic obtains for the building, if it manages to sell it to a third party for more than the price established in the call option, will represent a gain for the fund, in other words, for the Government of the Arab Emirate of Abu Dhabi.

Ipic (International Petroleum Investment Company) operates as a sovereign fund for channelling investments in energy and other similar sectors by the Government of Abu Dhabi. The group owns assets amounting to USD 68,000 million and holds investments in around twenty companies, of which Cepsa is the largest.

Bankia’s agreement with Ipic seemed like a great deal for the bank at the time. Back then, in the midst of the hangover from the real estate crisis, the price established for the option to sell the building was very attractive. In addition, Ipic rented out the whole building to house Cepsa’s headquarters, although the oil company did not end up occupying all of the floors.

The tower has a surface area of more than 100,000 m2, of which around 72,312 m2 relates to above ground offices and a further 37,500 m2 corresponds to five underground floors.

The agreement between Bankia and Ipic included a lease contract for an extendable eight-year term. This long-term contract is another of the elements that will increase the value of the building in the event that Ipic ends up selling it to a third party. At the moment, Bankia charges Ipic a monthly rent of €1.6 million, through the company Torre Norte S.A.. Ipic pays for the rent through the company Muscari Development, B.V., which is domiciled in The Netherlands. That price includes discounts that end in June 2016. The lease contract includes the call option to buy the entire building. (…). The Ipic group began to evaluate options for selling the building at the end of last summer, following the collapse of the global oil prices. (…).

Original story: Expansión (by M.Á.Patiño and R.Arroyo)

Translation: Carmel Drake

Shareholders Expected To Approve Intu’s Purchase Of Land In Malaga

6 March 2015 – Expansión

The British property developer has called a shareholders’ meeting to approve (its construction of) one of the largest shopping and leisure complexes in Spain.

The company that owns Puerto Venecia in Zaragoza (pictured above) and Parque Principado in Asturias is going to construct its third shopping centre in Spain, if its shareholders approve the plans at their meeting on 15 April.

In a statement issued yesterday (Thursday) to the London Stock Exchange, Intu Properties announced its decision to exercise a call option to purchase 30 hectares of land close to Torremolinos (Málaga) for €37.5 million. The company has already invested €4.2 million preparing for the project and it may also buy another adjacent site for €4.8 million.

The vendor of the land in Málaga is the Peel Group, a company that holds a stake in Intu, and so the other shareholders should authorise the transaction at their meeting. Moreover, Peel has committed to investing the money it receives from the sale of the site in Málaga into shares in the company, which is listed in London.

If the agreement is approved, Intu will invest €450 million in the development of a new shopping centre between 2015 and 2018. Its objective is to obtain an annual return of 7% on this investment from the rental of shops and restaurants in the complex. Intu plans to look for partners to buy shares in the development company that will build the centre.

In addition to its shopping centres in Zaragoza and Asturias, and its project in Málaga, the Intu group is planning other developments in Valencia, Vigo and Palma de Mallorca. Intu’s share price rose by 1.1% in trading on the London Stock Exchange on Thursday.

Original story: Expansión (by R. Casado)

Translation: Carmel Drake

‘Dear Hotel’ Overtakes Wanda In Plaza de España

2 March 2015 – Expansión

In Madrid’s Plaza de España, the hubbub of construction work is accompanying tourists as they journey into the commercial heart of the capital: Gran Vía. The Edificio España remains in tact (for the moment), as Wang Jianlin, the owner of Dalian Wanda, finalises the designs for his megaproject, which will include a hotel, shopping centre and homes.

The site that will house the future Hotel VP Plaza de España remains empty, but scaffolding is now up on the Torre Madrid, where Metrovacesa is refurbishing the building that will house a Barceló hotel – on one of the corners that Plaza de España shares with Gran Vía.

Plaza de España is also where the first of the hotels that is intended to revitalise the area will be opened. The area has been in decline since 2005, when Intercontinental closed its Hotel Crowne Plaza, which was located into the Edificio España building. Now, work is nearing completion on the Dear Hotel, a property that the Sebrango family acquired in 2012, after exercising a call option that Renta Corporación held over the building. The Sebrango family, which also owns the Hotel Chiqui (in Santander) have designed a four star hotel, with 162 rooms and it is scheduled to open on 15 May, on the day of San Isidro, one of the most important fiestas in the Spanish capital.

Roof terrace

The Dear Hotel project, which will have its entrance on Gran Vía, 80, has required an investment of €30 million – including the purchase of the building and the work required to refurbish it. Previously, the property housed homes and offices.

The hotel will have 12 floors and there will be a roof terrace and restaurant on the top floor, which its owners hope will become an iconic space for the hosting of special events in the capital. The style (of the property) will be elegant and modern, and in terms of prices, the average room will cost between €150 and €160 per night. The price of the suites will range between €250 and €300 per night and the hotel will create between 70 and 80 new jobs.

“It will be a four star hotel due to the individuality of the building, but the service and quality will be on a par with a luxury establishment”, explains its director, Francisco Sebrango. According to the owner’s forecasts, more than 60% of the hotel’s guests will be foreigners.

Since purchasing the building, the Sebrango family has received numerous offers to sell or transfer the operation of the hotel. Nevertheless, they have decided to pursue their original strategy and operate the hotel themselves. “We considered the option of a franchise agreement, but in the end we ruled that out. We want to create a unique hotel and we believe that it has the most value in our hands”.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake