GMP Puts Huawei’s Offices in Castellana Norte Up For Sale

28 May 2019 – Eje Prime

The real estate group GMP has put the headquarters of the Chinese company Huawei in Madrid up for sale. The technology giant has occupied the offices, which span 21,000 m2, since Q1 2017. The premises are located in the Castellana Norte Business Park in Las Tablas, close to the headquarters of other groups such as Mediaset and Nokia.

The Castellana Norte Business Park has become one of the most important urban renovations projects in the Spanish capital. It offers office space measuring more than 1 million m2, with capacity for over 200,000 people.

GMP, which is owned by the Montoro family and the Singapore sovereign fund, specialises in the management of offices and retail parks. It owns 18 work centres in Madrid and generated revenues of €106.7 million in 2018, up by 8% YoY.

The office market in the Spanish capital is one of the most attractive for international operators thanks to the combination of low prices (€33/m2/month) and availability (10.5%).

GMP’s decision to sell the property was taken before the US named the Chinese company as a threat to national security and vetoed it from all business with US companies.

Original story: Eje Prime (by Marta Casado Pla & Marc Vidal Ordeig)

Translation/Summary: Carmel Drake

Sikone Investments 2015 Starts Work on the Renovation of its Office Complex in Madrid

17 October 2018 – Eje Prime

Foxá 25 is on the verge of revealing a new image. The owner of the building, Sikone Investments 2015, has just started work on the renovation of the office complex, which has a surface area of 6,700 m2 and which is located in the Castellana Norte district of the Spanish capital, very close to the Cuatro Torres skyscrapers.

The renovation work is expected to take eight months. Nevertheless, the main tenant of the property, which is going to occupy nine of the thirteen floors, will move in sooner than that, during the month of December, according to reports from the construction firm in charge of the project.

The objective of the renovation is to completely modify the interior design of the office area to create a flexible space that can be adapted to the current needs and demands of the Madrid office market.

Original story: Eje Prime

Translation: Carmel Drake

Spain’s Large Cities Are Running Out of Land for New Homes

18 February 2018 – La Vanguardia

Spain’s large cities, led by Madrid and Barcelona, are running out of developable land on which to build homes, primarily due to administrative obstacles, according to experts, who warn that this shortage is pushing up final prices.

The urban planning regulations establish very long turn-around times and are very rigid when it comes to changing the use of land to be able to adapt plots to the demands of citizens, according to the Managing Director of the property developer association Asprima, Daniel Cuervo.

Moreover, the political changes in the town halls typically involve changes in the development plans for cities, which means more delays in the land management process.

In his opinion, the regulations need to be simplified, to make them more agile, and legal certainty needs to be strengthened.

Cuervo has advocated placing the responsibility for large city urban planning in the hands of a body of independent experts who would decide what is best for citizens, without their decisions being affected by political ideologies.

Currently, in Madrid, there is developable land ready for the construction of around 20,000 homes, according to Cuervo, who points out that, although there are lots of plots, they cannot be used because they have “legal problems” and are indivisible, which complicates their use as sites for house building.

“In Madrid and the metropolitan area of Barcelona, there is land under development but the political decisions of the town halls to suspend urban developments is leading to an increase in the prices of buildable land and, therefore, in house prices”, he added.

The President of Quabit, Félix Abánades, underlines that the shortage of land and tensions in prices “are happening only in certain areas of the large cities” and recalls that, currently, the average price of land is less than half the value it reached in 2007.

“In general, as property developers, we are being more rigorous in our purchases”, said Abánades, who indicates that Spain currently has enough buildable land for approximately 1.5 million homes.

At the current and forecast rates of construction, “that land will supply the market for the next 8 to 10 years”, but in some very specific areas, such as Madrid, Barcelona, Málaga, Bilbao and certain coastal towns, land needs to be developed as a priority.

In his opinion, if there is a shortage of land today it’s because, during the years of the crisis, all of the urban planning management processes were suspended. Moreover, “absolutely essential” projects are still being blocked in cities such as Madrid, including the Castellana Norte project and several developments in the south-east of the capital.

“It is essential that the administrations streamline urban land management, and facilitate and promote the processing of new urban plans”, he said.

Property developers are facing enormous difficulties in the generation of buildable land and there is a paradox in that the areas with the most acute shortages of land are precisely those where demand for housing is highest. Ultimately, that is hurting buyers the most because homes are becoming more expensive, according to sources at Neinor Homes.

The stoppage caused by the crisis led to a mismatch between the creation of buildable land by the authorities and the absorption of that land by the property developers, say sources at the property developer.

“It should be possible to reach an agreement between the politicians, businessmen and technicians to enable a more efficient way of managing the land”, according to Neinor.

The CEO of Aedas Homes, David Martínez, added that, as demand recovers and the stock of homes decreases, inflationary tensions are arising in terms of the available land.

The urban transformation process in Spain (from land not suitable for development to developable land) is tremendously complex, causing processing times to lengthen beyond what is “reasonable and desirable”, increasing the investment required to build homes (…).

Spain is a country where new-build homes suffer from “lots of administrative obstacles” says the Head of Research at Pisos.com, Ferran Font, who laments that the municipal administrations do not facilitate the creation of suitable new products for the consumer, given that they forecast less demand, which, in turn, puts upward pressure on second-hand house prices.

To avoid that “it would help to have greater openness and more dialogue on the part of the municipal administrations, given that new build properties could help to decongest the most central districts of our cities and move pressure away from them towards peripheral neighbourhoods, whose expansion is being compromised by excessively slow decision making”, he added.

Original story: La Vanguardia

Translation: Carmel Drake

Aedas Homes Will Make Its Stock Market Debut Before Year End

25 September 2017 – Expansión

A new real estate company will debut on the stock market before the end of the year. On Friday, the property developer Aedas Homes confirmed its intention to debut on the stock market during the fourth quarter of the year.

The company, which specialises in the construction of homes, has not revealed the price at which the placement of its shares will take place. Nevertheless, market sources forecast that its market capitalisation will be higher than its Gross Asset Value, estimated at €1,345.8 million.

Aedas Homes was created by the US fund Castlelake, after that firm invested several hundreds of millions of euros in buildable residential land in Spain. After creating a portfolio containing 1.3 million m2 of buildable land, worth €1,000 million, Castlelake turned to the team at the Socimi Merlin Properties to design a business plan that would allow it to maximise the returns on its investments. For this project, the fund recruited David Martínez, a director with experience in real estate developments, such as Valdebebas and Castellana Norte, both in Madrid.

Castlelake’s intention is to place between 40% and 60% of the company’s shares on the stock market, through a primary offer and then a secondary offer amongst qualifying investors. The primary offer is expected to raise funds amounting to approximately €100 million.

Investors

“The stock market debut of Aedas Homes will allow us to access funds from a diversified base of investors, which will be used to finance the company’s expansion and development plans”, explains David Martínez, CEO of the property developer. Citigroup and Goldman Sachs are acting as the global coordinating entities of the placement; Banco Santander and UBS as the joint bookrunners; BBVA, CaixaBank and Sabadell are the co-lead managers; and Deloitte is the financial advisor.

Currently, Aedas owns a portfolio of land worth €1,370.5 million, distributed across sight Spanish provinces – including Madrid, Barcelona, Málaga and Valencia–, which will allow it to build more than 13,000 homes. These magnitudes place it amongst the top four property developers in Spain. The company is currently working on 11 projects, involving 576 homes. Its business plan forecasts the investment of between €200 million and €250 million on new acquisitions over the next 2.5 years to deliver 3,000 homes per year from 2022 onwards.

With this move, Castlelake is following in the footsteps of Lone Star, which was the first international fund to list its company, Neinor Homes, on the stock market, after investing in assets in the Spanish market.

The debut of Lone Star’s real estate company took place in March, with a valuation of €1,340 million. Since then, the company has appreciated in value and its market capitalisation now exceeds €1,420 million. Lone Star placed 60% of its company’s share capital in the stock market debut. Last week, it divested another 27%, to raise €394 million. On Monday, the fund Wellington acquired an 8.5% stake.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

“Valdebebas Is Ready To Welcome Companies Post-Brexit”

27 June 2017 – Expansión

Valdebebas – one of the largest urban planning projects in the Community of Madrid, with a land surface area of 10.6 million m2 – has fired the starting gun for what is expected to become the city’s “new financial and technological district”.

“We have land spanning more than 1 million m2 (equivalent to the surface area of almost 140 football pitches) available for tertiary use. People talk about Castellana Norte, but there is no development in Spain quite like Valdebebas. It is already ready to welcome companies from London searching for new locations after Brexit and any other multi-national companies”, explains Marcos Sánchez, Managing Director of the Valdebebas Compensation Board, which represents the owners of the land. Market sources indicate that the land owners include Monthisa, Bisbel, Vivienda Económica, Celteo, Coindeco and Inmobiliaria Espacio.

This business park will comprise twenty blocks, with buildabilities ranging between 9,000 m2 and 110,000 m2. It will house buildings that have between five and fourteen storeys.

The director said that, although they have not yet started “to sell” Valdebebas as a destination for companies, international investors, funds and hotel chains have already expressed their interest in the development: “We are still in the preliminary conversation phases. Until now, contact has been made because interested parties have been approaching us”.

For Sánchez, the aim of Valdebebas is to attract fin-tech companies and others relating to that sector. Moreover, it has the capacity to accommodate between three and four hotels and restaurant brands. “We have direct access to the airport and are well connected to the city centre. It is an unbeatable location in Europe and the world”.

In this sense, it is worth remembering that a bridge is being constructed to connect this area with Barajas Airport – T4, with a forecast investment of more than €20 million. “We have already moved earth and started building the foundations on both sides. The work, which was started in February, is going well and will be finished within two years”, he said.

Valdebebas has several advantages over the potential Operación Chamartín: the immediacy – with “windows of opportunity that can be benefitted from now” – its size and location, according to Sánchez. “Castellana Norte is our natural competitor; despite that we want that site to be developed as soon as possible and in the best way possible because we will all end up winning as a result”, he said.

Legal journey

In terms of the legal position, Sánchez acknowledges that, although Valdebebas has always been very judicialised – construction of between 800 and 1,000 homes has been suspended following a ruling by the Supreme Court – almost 100% of the residential property has been sold, the population already stands at 10,000 people and is set to reach 18,000 by the end of the year. In his opinion, it is “perfectly feasible” to reach agreements before the urbanisation is completed. “All of this administrative and judicial chaos will end when the urbanisation is handed over in two years time”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Castellana Norte Wants To Become The New “City” Post-Brexit

20 October 2016 – Expansión

BBVA and the San José group are refusing to throw in the towel on their plans to construct the Castellana Norte urban development (previously known as Operación Chamartín). To this end, the heads of the company Distrito Castellana Norte have engaged the real estate consultancy firm Colliers to perform a study, which will delve into the need for Madrid to have a new supply of offices and high quality residential properties.

“Madrid is a very attractive business centre, with good infrastructure and security, but there is clearly a lack of high quality products on the market at the moment, because the market has grown in a heterogeneous way and the stock of available offices is extremely poor compared to the centres of other European cities”, explained Antonio Pan de Soraluce, the Director General at Colliers International España.

Sources at the consultancy firm highlight the opportunity that exists to turn Madrid into a international destination of choice and to become the new “City” in Europe. “Projects such as Castellana Norte are very attractive because companies are becoming increasingly demanding about where they locate their offices. We have an opportunity not only because of Brexit, but also because we are a very attractive location for companies from Latin America looking to open offices in Europe”, said Pan de Soraluce”.

20% of the total surface area (more than 3 million m2) in Distrito Castellana Norte will be allocated to offices, homes and businesses, whilst the remainder will be used for infrastructure and communal space.

International comparisons

The project has very low buildability ratios when compared with other similar urban planning projects around the world. “We have studied 200 projects, of which 14 are similar, given that they also involve the regeneration of obsolete railway and port infrastructures, and we have identified that Castellana Norte has the third lowest buildability coefficient of them all”.

Projects assessed included La Défense in París, Canary Wharf in London and Postdamper Pl. in Berlín. All of those projects received institutional support and some even benefitted from public financing. That is something that is not happening with the Town Hall of Madrid, against whom the property developer company has filed an appeal for cancelling the project that was planned initially. The Community of Madrid and the Ministry of Development have supported DCN’s appeal, given that they own most of the land where the project was due to be constructed.

To date, the company owned by BBVA and San José has invested more than €120 million on the Castellana Norte development.

Original story: Expansión

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

Carmena Commits To Studying Operación Chamartín

25 June 2015 – Expansión

The mayoress of Madrid, Manuela Carmena, has confirmed to the Chairman of the Distrito Castellana Norte (DCN), Antonio Béjar, that she is committed to studying the draft plans for the extension of the Paseo de la Castellana, according to sources close to the company.

Carmena met with the project’s leaders on Wednesday, for around an hour, in an atmosphere characterised by the “utmost cordiality”.

During the meeting, Béjar described the planned development to the mayoress of Ahora Madrid. He explained that the project aims to promote the DCN through its Partial Plan and that it will be one of the most important city projects in Europe.

At the end of the meeting, Béjar seemed optimistic and said that he hopes that the Partial Plan will be approved at an upcoming plenary session, once the Town Hall’s new government has analysed it in detail.

The project will extend the Paseo de la Castellana north by 3.7 km and involve the redesign of an area covering 311 hectares. It will also include the construction of 17,700 homes, 56 hectares of green space – half the size of the Retiro park – and several skyscrapers.

Original story: Expansión

Translation: Carmel Drake

Who’s Who In The ‘Operación Chamartín’ Project?

2 March 2015 – Expansión

Madrid / The most important real estate project to be undertaken in Spain in recent years is being driven by BBVA and the San José group, which together own the development company; three public bodies are also participating in the project, as well as companies such as Renfe.

On 30 January, a swarm of photographers surrounded tens of public figures including distinguished representatives from the financial world, such as Francisco González, Chairman of BBVA, and Spanish businessmen and politicians. It was not a chance encounter, but rather a meeting to formally present of one of the largest real estate developments ever planned in Spain and one of the most important in the world today: the Castellana Norte project.

The official presentation of the development, known until now as Operación Chamartín, put the finishing touches to more than two decades of negotiations and collaborative work between public and private companies.

The project, which will require an investment of almost €6,000 million for the development of almost 3 million square metres (of land), has required consensus from the developers, BBVA and the constructor group, San José, as well as the Town Hall of Madrid, the Community of Madrid, the Ministry of Development and executives at Renfe. But, which role will each party be taking on?

“This would not have been possible without the support of BBVA”, announced one of the real estate experts who has worked, together with 31 professional teams from more than twenty countries, on the preparation of the Castellana North project. The financial entity owns 75.5% of the plan’s developer, the Castellana Norte Madrid company (formerly Dutch), having inherited the stake from Argentaria following its acquisition in 1999. The company is the owner of the rights of 61.6% of the land (amounting to almost two million square metres).

Its partner in this (development) company is the construction group San José. The company owned by Jacinto Rey had to divest its real estate assets during the last refinancing process it underwent. Nevertheless, it managed to retain its stake in the former company Dutch, showing its commitment to this project, which is expected to be executed over 20 years.

After the Castellana Norte company, the Town Hall of Madrid owns the next largest plot of land, with a 5.3% stake. On 19 February, the Council approved the revision of the Partial Plan for the Interior Reform of Operación Chamartín (Plan Parcial de Reforma Interior de la Operación Chamartín), which will organise the 3,114,336 square metres under development.

In that document, the Town Hall has committed to carrying out the construction works of the Nudo Norte (North Junction) and Nudo Fuencarral (Fuencarral Junction) set out in the plan, although the expenses incurred will be borne by the developer.

Renfe

62% of the land owned by the company Castellana Norte was transferred from Renfe. This land is partly occupied by the train tracks that converge at Chamartín station. The railway company, which reports to the Ministry of Development, will receive €1,250 million for the transfer of this land over a 20 year period.

Furthermore, Renfe, which owns 1.4% of the land, together with Adif, will take responsibility for the execution of the remodelling of Chamartín Station; the construction of the new tunnel to connect the high speed line between Atocha and Chamartín; the construction of the stations in Fuencarral; and the construction of the structure that will cover the tracks.

Meanwhile, the Community of Madrid will be responsible for the design and execution of the construction of the new metro line that will run through the area, but the cost of that will be borne by the management company.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Madrid’s Own Dedicated Financial District

2 February 2015 – Expansión

The Castellana Extension / The plan is to create a new trendy area in Madrid to rival Canary Wharf in London and La Défense in Paris.

A sustainable area, with every kind of facility – a landmark axis for Madrid. These are some of the foundations upon which the new real estate development in Chamartín, in the north of Madrid, have been created.

“It is an ambitious proposal that draws clear parallels with urban regeneration projects in other European capitals, such as the changes brought about by Canary Wharf in London, La Défense in Paris and Potsdamer Platz in Berlin”, explains Flavio Tejado, Director of the Technical Office of the company Distrito Castellana Norte and Head of the engineering firm Arup in Spain.

The company is one of a group of more than 30 entities that have worked on the project, including professional services and real estate firms, lawyers and the architect studio Rogers.

The ambitious Castellana Norte project will be structured in four parts: the first one, called Parque Central, will be closed to Plaza de Castilla, and will include 6,300 homes and a park covering 24 hectares. “It is an area where the (current) housing stock barely amounts to 1%”, say its developers.

The second, called the business area, will boast 878,150 square metres of offices and 87,425 metres of public facilities, two metro stops (with 4.4 km of new track) and one train station, which will complete the Cuatro Torres complex located in the adjoining area. “We want it to be a space that is full of life not only from Monday to Friday, (but also on the weekends) and so there will also be shopping centres and hotels”, said Antonio Béjar, the Chairman of the company Castellana Norte, on Friday.

The new development will also involve the lengthening of the Paseo de la Castellana, with the construction of 10,000 homes and the new public facilities will also provide services to the existing neighbourhoods of Fuencarral and Begoña. In addition, there will be a tram service, which will operate through the middle of the new section of the Castellana. In addition to an office complex, the development with have a technological area, measuring 180,350 square metres, which the developers expect to appeal to number of companies and to generate new economic activities.

The extension of the Castellana will improve access to the city for the area with the regeneration of the North Junction and the M-40, and the integration of the Cuatro Torres area with developments in Las Tablas, where several large companies, such as FCC, Telefónica and BBVA have their head offices. All of this will create a renewed financial district in the Spanish capital to rival those of its European counterparts.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake