Savills & Aguirre Newman Complete Their Merger

3 January 2018 – Eje Prime

Without any fuss whatsoever, Savills and Aguirre Newman ended the year by completing their merger. On the last working day of the year, the British company announced to the London Stock Exchange that it had finally signed the agreement to buy the Spanish real estate consultancy. The company, which announced its intention to acquire the Madrid-headquartered business through the same channel on 28 July 2017, will pay €67 million by way of consideration.

According to the document that proves the purchase of Aguirre Newman, the British consultancy firm paid €42 million at the time of the signing and will pay the remaining balance in instalments of €5 million over the next five years, to reach the €25 million agreed between the two parties.

In theory, Savills had planned to complete the purchase before 30 November, however, administrative setbacks delayed the signing. Nevertheless, the company said that all of the paperwork was completed before the end of 2017 (…).

The need of both groups to sign their merger before the end of the year was also an administrative priority, given that they wanted to start the new year afresh to operate under the brand, Savills Aguirre Newman, from the beginning of 2018. Moreover, this change will result in a significant number of changes to its operations in Spain. The first will see it move to a new headquarters in the financial heart of Madrid.

The Spanish subsidiary of Savills has set the wheels in motion to move its offices to one of the capital’s main skyscrapers. After lots of negotiations, the new consultancy firm will move into the Castellana 81 building, better known as the Torre BBVA. The company will lease 8,000 m2 of space after reserving six floors in the building from the Socimi GMP, which owns the asset.

Built in 1981, Torre BBVA is one of the symbols of the Azca financial district in the Spanish capital. GMP renovated the asset after buying it and, coincidently, Aguirre Newman, along with CBRE, were appointed to look for new tenants for the building. The consultancy firm plans to move into its new offices as soon as the integration of the two companies has been formalised.

In terms of the business of the two consultancy firms in Barcelona, sources in the Catalan capital indicate that it is very likely (although not definite) that the Savills staff located in the Catalan capital will move to the offices that Aguirre Newman has on La Diagonal in Barcelona, given their location and capacity.

Another matter still up in the air is the duplication of the entire organisational structure of both companies. Savills’ intention is to maintain the entire workforce, although it is more than certain that many of the directors will leave the company voluntarily, according to sources consulted by Eje Prime.

The Presidents of Aguirre Newman, Santiago Aguirre and Stephen Newman, and the President of Savills España, Rafael Merry del Val, will be appointed to the Board of Directors of the combined company, in the following roles: Santiago Aguirre, Chairman of the Board; Stephen Newman and Rafael Merry del Val, Executive Co-Vice-presidents.

The senior management team of Aguirre Newman and Savills España will retain and include José Navarro, current CEO of Savills España; Javier Echeverría, CEO of Aguirre Newman; Jaime Pascual-Sanchiz, Executive Director General of Aguirre Newman, and Ángel Serrano, Director General of the Business at Aguirre Newman. The office in Barcelona is going to be led by Anna Gener and Arturo Díaz, as the CEO of Savills Aguirre Newman and President of the group in Barcelona, respectively. The real headache for Savills Aguirre Newman will come with the next level of management, although those roles will not be assigned for several weeks yet (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Madrid Attracts Many Of The Companies Relocating Their HQs From Cataluña

10 October 2017 – Expansión

Over the last 10 days, several companies with their headquarters in Cataluña, such as Oryzon, Dogi, Eurona, Proclinic and Sabadell have announced that they are moving their HQs outside the region. Oryzon has established its registered address on Carrera de San Jerónimo in Madrid (…) and the telecommunications operator Eurona has also moved to the Spanish capital (…). Meanwhile, Proclinic has announced that it is moving its headquarters to Zaragoza; Sabadell is moving to Alicante; CaixaBank to Valencia; Gas Natural and Abertis to Madrid, in both cases; and Catalana Occidente is still considering if/where to move.

According to sources consulted, no effective consultations are being carried out at the moment, but Madrid is becoming one of the major alternatives. Prime rents are higher in the capital than in Barcelona, ranging between €25/m2/month and €35/m2/month along Paseo de la Castellana, and peaking at historical maximums of €37/m2/month in Torre Serrano. Meanwhile, in Barcelona, the average rent in the city centre amounts to €19/m2/month, reaching maximums of €24/m2/month on Avenida Diagonal. In any case, the performance of prime rents in both cities has been very good so far this year, with growth of 9% in the last quarter with respect to the same period last year, according to CBRE (…).

In terms of absorption, 128,108 m2 of space was leased during the second quarter of the year in Barcelona and 156,334 m2 of space was leased in Madrid. Availability is greater in Madrid, at around 12%, compared to 8% in the Catalan capital.

According to José Miguel Setién, of JLL, whilst it is really hard to find spaces of 3,000 m2 on Avenida Diagonal, there is more high-quality space available in the business district in Madrid, due to the renovations that have been carried out since 2013. As such, the market for medium-sized operations has performed exceptionally well there, even during the summer.

Overall, it is estimated that 1.5 million m2 of surface area is available in Madrid; of which 220,000 m2 is free in the centre of the capital, according to Ángel Estebaranz, National Director of Offices at Aguirre Newman. There is space available in several well-known offices such as Torre Foster, Torre Europa, Castellana 81, Castellana 77, Castellana 200 and Plaza de la Independencia, mostly grade A renovation products. Even Torre Picasso has almost two floors available, which would allow the right tenant to locate its corporate headquarters in one of the most iconic buildings in the city (…).

When it comes to choosing a new location, the nature of the company’s business plays a critical role. In this way, financial and legal companies tend to locate their offices in the business centre of cities, whilst pharmaceutical companies, for example, position themselves between the M30 and M40 ring roads, since they do not require such iconic buildings, but do need a lot of space, available in areas such as Campo de las Naciones, Alcobendas, Moraleja, Sanchinarro… Tech firms, like Google and Amazon, tend to establish themselves within the city centre but not in prime areas, such as Atocha, for example. Meanwhile, publicity firms are moving to Chamberí, with WPP and Havas’ new headquarters to be located in that neighbourhood, and Telcos are concentrating in urban areas of the city with rents of between €22/m2/month and €25/m2/month, says José Mittelbrum, National Director of Offices at CBRE (…).

Original story: Expansión (by Lucía Junco)

Translation: Carmel Drake

Rents In Azca’s Towers Exceed Those In The Cuatro Torres

12 September 2017 – El Economista

The Cuatro Torres skyscrapers, to the north of Madrid, are no longer casting a shadow over Azca, which is establishing itself as the iconic business district in the city. With views overlooking the Paseo de la Castellana and just a stone’s throw from the Santiago Bernabéu Stadium and the Nuevos Ministerios transport hub, this business centre has managed to renew itself, to avoid being left behind compared with other areas of Madrid. So much so, that the rents for its recently renovated skyscrapers are 16.6% higher per square metre than the most expensive space in the Cuatro Torres, to the north of the city.

Castellana 81, the historical headquarters of BBVA, leads the ranking in terms of rental prices in Madrid, given that its empty space is being marketed for between €27 and €35 per square metre per month. This tower, designed by the prestigious architect Sáenz de Oiza, has been subjected to a comprehensive renovation by its owner, the Socimi GMP, which spent €30 million renovating one of its most iconic properties in Azca and on Madrid’s skyline.

The asset, which became a multi-tenant property when it first came onto the market, has already managed to conquer new companies following the departure of the banking entity, which moved to its own financial city, in Las Tablas, to the north of Madrid. Thus, in the last few months, rental contracts have been signed with Teka and Hays.

At the forefront of design

Castellana 77, which is also owned by the Montoro family’s real estate company and the Singapore sovereign fund, GIC, has been the subject of another of the major renovation projects that has been carried out in Azca and which has positioned the business district at the forefront of design. Its façade is covered with slats that protect it from direct sunlight and which are lit up at night in a diverse range of colours.

The tenant that decides to lease the office space in this building, which spans 16,200 m2 over 18 floors, will be able to choose the colour of the tower, which has more than 200 parking spaces as well as charging points for electric cars. With these features, this property has the second highest rents in Azca, which range between €28 and €33 per square metre per month.

And it is followed closely by Torre Europa, which housed the headquarters of the professional services firm KPMG for many years. Following the move of that consultancy firm to the Cuatro Torres, the tower has been renovated to turn it into the first intelligent and connected office building in Spain. Infinorsa, the majority owner of this skyscraper, which overlooks the Santiago Bernabéu, has invested €20 million on a facelift of the façade, which had not been changed for 30 years, and above all, on the renovation of the interior, which has given a radical about-turn to the essence of this 121m-tall tower (…).

Rents in this tower now range between €27 and €32 per square metre per month. Its renovation has already captivated one of the large international law firms, Freshfields (…). The US firm AOL has also decided to move its Spanish corporate headquarters to Torre Europa, as well as a pharmaceutical company (…).

Torre Picasso, the tallest skyscraper in Azca, at 156m, has not undergone such a comprehensive renovation as its neighbours, but following the departure of the consultancy firm EY to Torre Titania, 15,000 m2 of space there was left vacant. Some of that space in the tower owned by Pontegadea – the investment arm of Amancio Ortega – will be leased to Deloitte, which will thereby become its largest tenant. After several improvements to the property, the highest floors are now being marketed for €31/m2/month (…).

Rents in the Cuatro Torres barely reach €30/m2/month

Nevertheless, in the new financial district located in the north of Madrid and known as Las Cuatro Torres, only one of the towers manages to charge a rent of €30/m2/month, even though the buildings are much younger, given that they were inaugurated between the years 2008 and 2009.

Office space in Torre Espacio ranges between €29 and €30 per square metre per month. The Philippine group Emperador, which owns this skyscraper (…) renewed the image of the tower at the end of last year and launched a new marketing plan with the aim of finding tenants for the 8,800 m2 that were vacant in the building at that time.

Next in the ranking is Torre Cepsa, for which Amancio Ortega (…) paid €490 million last year. It is occupied almost in its entirety by the oil and gas company whose name it bears; the cost of the 15,000 m2 of space that is available ranges between €23 and €28 per square metre per month.

Meanwhile, Torre de Cristal, the tallest skyscraper in Spain, at 210m, is the most affordable of its neighbours, since its available space is being marketed for between €25 and €27 per square metre per month. Last year, KPMG left the Azca area and moved to this property, where it leases around 23,000 m2 (…).

Next door is Torre PwC, leased to the consultancy firm whose name it bears and the five-star hotel Eurostars. Its owner is the Socimi Merlin Properties (…) and PwC reportedly pays €19/m2/month.

The Cuatro Torres complex is now getting ready to receive a fifth tower, Torre Caleido. That property, which is currently being constructed (…), will be leased to IE Business School and Grupo Quirón-Salud (…), who will reportedly pay between €15 and €18 per square metre per month (…).

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Azca: Madrid’s Financial District Gets A Makeover

26 August 2016 – Expansión

Three buildings in the area are currently being completely renovated, along with all of the public spaces in the financial district. Zara will move in soon and the neighbouring Bernabéu stadium will be renovated in 2018.

The refurbishment of some of its classic office buildings, the complete renovation of the public squares, the arrival of a fashion giant and some changes in the faces of some of the most illustrious neighbours. That is the urban landscape facing Azca at the moment and it means that the financial district will have a completely new image in a matter of months.

In the schedule of programmed works, we have the complete refurbishment of Torre Europa, one of the flagship buildings in the area, which has not had any space available for three decades. Following the departure of its veteran tenant – KPMG -, Grupo Infinorsa has decided to invest €20 million in the complete modernisation of the 32-storey skyscraper, including the renewal of the façade, which will be completed at the beginning of 2017. (…).

JLL has been commissioned to market the empty office space, equivalent to 70% of its 42,000 sqm surface area, and has already signed its first contract with the US multinational AOL.

Also for the first time since it opened in 1981, almost all of the Torre Negra is available for rent; until last year, it housed the corporate headquarters of BBVA, which continues to occupy the upper floors of the 28-storey skyscraper. A construction canvas currently covers the façade of the building, renamed Castellana 81, where GMP is undertaking work to improve the 38,000 sqm space.

The triangle of planned renovation work is completed by the former headquarters of the Saint Gobain group in Madrid, which is currently unoccupied. With a leasable surface area of more than 16,000 sqm, spread over 18 floors, the building’s façade is going to change with the inclusion of some unique wavy slats on the outside, although the internal refurbishment will be carried out from the ground floor to the roof terrace.

Whilst three of its most spacious office buildings are being updated, Azca is also participating in the renewal of its public spaces. (…).

For the time being, the first phase of the rehabilitation of Plaza Pablo Ruiz Picasso has been completed and the second, and final, phase is scheduled to begin before the end of the year. (…).

But the most high profile issue in Azca over the next few months will be the arrival of Zara to the financial centre of Nuevos Ministerios. The company owned by Amancio Ortega plans to open its largest store in Spain in the 5,000 sqm building currently occupied by FNAC, next door to El Corte Inglés.

The renovation of the area could be completed in the medium term with urban projects in the vicinity. One project that is already in an advanced phase is the renovation of the Bernabéu stadium, which will not involve the extension of the constructed surface area, but will allow the construction of a roof, which is what the club wants. Most of this construction work will be carried out in 2018.

Another project, which is in an embryonic phase, will be the transformation of the Palacio de Congresos on La Castellana into a 23-storey property, which will include, amongst other facilities, a five-star hotel. (…).

Original story: Expansión (by Marta Belver)

Translation: Carmel Drake

GMP Becomes 3rd Largest Socimi In Spain

21 July 2016 – El Confidencial

(…) In the audit report just realised by the group owned by the Montoro family, the Socimi GMP confesses that the real estate consultancy Savills has granted its real estate investments a fair value of €1,349 million, representing an increase compared to their value last year (€1,192 million). That figure places the Socimi at the same level as Hispania, and as such, means that it is competing directly with the company led by Concha Osácar and Fernando Gumuzia for third place in the national ranking of the large listed real estate companies in Spain, behind Merlin-Metrovacesa and Colonial.

The company owns several major office buildings, including its own headquarters, located on Luchana 23, as well as the following properties: Parque Norte, Castellana Norte, Iberia Mart I and II, Génova 27, Hermosilla 3-Ayala 8, Alcalá 16, Castellana 81, Castellana 77, Goya 14, Puerto de Somport 8, Eloy Gonzalo 10, Velázquez 164, Condesa de Venadito 1, Titán 4, Llano Castellano 51 and Trespaderme 29.

In order to build up this portfolio, the company has benefitted from the invaluable assistance of the Singapore Sovereign Fund (GIC) since October 2014, following the fund’s acquisition of 32.9% of its share capital, as part of an agreement to spend €61.5 million on the shares. It has also committed to invest another €67 million before the end of March, which will allow GMP to maintain its pace of investment during its first few months as a listed company.

Given that the Socimi was constituted two years ago…the company is obliged to debut on the stock market before 30 September 2016. Nevertheless, as the company itself acknowledges in its audit report, its aim is to complete this process before it goes on holiday in August. This means that, if it obtains all the necessary authorisations, it may join the MAB – the Alternative Investment Market – within the next two weeks.

Financial situation

Despite the spectacular valuation of its assets, GMP has debt with credit institutions amounting to €800 million. The first key date in this regard will come in 2017, when debt amounting to €741.9 million is due to mature; that gives the company enough time to adapt its financial commitments, especially its syndicated mortgage loan with Société Générale.

At the end of 2015, the Socimi’s share capital amounted to €9.4 million, represented by 1.9 million shares with a nominal value of €4.92, although three weeks ago the company approved a split of the nominal value of its shares, as a preliminary step ahead of its debut on the stock market.

GMP Property’s revenues from rental income amounted to €57.35 million in 2015, compared with €65.83 million in 2014. The decrease was driven by the remodelling of some of its properties, which the company is currently engaged in, such as BBVA’s former headquarters on Castellana 81. In addition, the company received turnover of €4.35 million from the renting of car parks and €9 million from the provision of services, taking its total operating income to €59.8 million, compared with €65.8 million in 2014.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Rental Prices Will Rise On La Castellana After The Summer

6 July 2016 – Expansión

Madrid’s financial district is refreshing its image and prices are set to rise in the area after the summer. The Spanish capital’s La Castellana thoroughfare is aiming to attract tenants who are willing to prioritise the quality of space over rental costs.

Whilst investors remain attentive to the course of events unfolding in the City (London), following Brexit’s victory in the EU referendum held on 23 June, and the formation of a new Government in Spain after the election on 26 June, business is continuing as usual and the capital’s financial district is getting ready to open its doors to some new tenants. Some of the countries in the Eurozone may, over time, attract some of the activity that has been performed in the United Kingdom until now, and if this becomes a reality, Madrid’s financial district could represent a good option for companies currently headquartered in London.

Torre Europa is preparing itself to this end. Grupo Infinorsa has launched a process to renovate the property following KPMG’s departure and will allocate €20 million to the modernisation of its facilities. In the same way, GMP is in the middle of renovating the Castellana 77 skyscraper, known as Torre Ederra – the former headquarters of Saint Gobain – as well as Castellana 81 – Torre BBVA – to adapt them both to the new demands of the market. Another building that is looking for new tenants is Torre Picasso following EY’s move to Torre Titania. (…).

Sources at Cushman & Wakefield explain that demand is not growing in Madrid at the moment. “GDP levels are similar to during the years before the crisis, and so around 200,000 sqm of space is being leased out per year. The main explanation is uncertainty”. Moreover, it seems like the slowdown is more acute in the financial district, due to the quality of available stock and the cost. (…).

José Miguel Setién, Director of the Office Business at JLL, explains that renting in Madrid has been cheap until now and the price ratio is still very attractive when compared with other major European cities; this means that there is still a lot of potential in the Spanish capital. “Provided there are no political or structural macroeconomic problems, the figure trend is that the market will continue to rise”, he added.

The CEO of Aguirre Newman, Jaime Pascual-Sanchiz de la Serna, explained that offices in prime areas, as well as in the market in general, have been very static in terms of renovations and new projects. Pascual-Sanchiz says that several projects launched within the last 12 months will come onto the market within the next year. In his opinion, they will be a good indicator for measuring the evolution of offices. “The owners of those properties, including Pontegadea, Mutua Madrileña and the Consorcio de Compensación de Seguros do not have financial problems, and are not desperate to lease their properties at any price”. For the expert, although we are seeing small and medium-sized operations in the area, the large moves, which are more dependent on the domestic and international political situation, will have to be unblocked after the summer.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake