CBRE: Hotel Investment Fell by 49% in 2019 Due to Lack of Large Deals

8 January 2020 – Expansión

According to CBRE, investment in the hotel real estate sector amounted to €2.5 billion in 2019, down by 49% YoY. In total, 126 hotels changed hands last year, containing 15,000 rooms, together with another 3,200 planned rooms.

Most of the transacted properties were individual assets (72%), with just 28% of the hotels forming part of portfolios, down from 65% in 2018. The main reason for the decrease is a reduction in corporate operations in 2019. Blackstone took the market by storm in 2018 when it made a takeover bid for the Socimi Hispania, which was the largest hotel owner in Spain.

By type of asset, more than half of investors (51%) invested in urban assets in 2019, resulting in a decrease in investment in the vacation sector.

Original story: Expansión (by Rocío Ruiz)

Translation/Summary: Carmel Drake

Sales of Offices Buildings in Barcelona Rise by 45%

6 January 2020 Barcelona is experiencing record sales of office buildings, reaching highs not seen since before the beginning of the financial crisis. The sales are largely driven by high levels of liquidity and low bond yields. Ten buildings worth more than one hundred million euros sold during 2019, pushing total investments for the year to €2.816 billion. That figure is 44% above the amount sold in 2018, according to a report by CBRE.

The profile of investors has recently changed as well, as larger institutional investors looking for stable, long-term returns have slowly replaced more opportunistic buyers. Furthermore, the political turmoil in Catalonia also seems to have failed to scare off most investors.

Barcelona está experimentando ventas récord de edificios de oficinas, alcanzando máximos no vistos desde antes del comienzo de la crisis financiera. Las ventas están impulsadas en gran medida por los altos niveles de liquidez y los bajos rendimientos de los bonos. Se vendieron diez edificios por valor de más de cien millones de euros durante 2019, lo que empujó las inversiones totales para el año a 2.816 millones de euros. Esa cifra es un 44% superior a la cantidad vendida en 2018, según un informe de CBRE.

El perfil de los inversores también ha cambiado recientemente, ya que los inversores institucionales más grandes que buscan retornos estables a largo plazo han reemplazado lentamente a los compradores más oportunistas. Además, la agitación política en Cataluña también parece no haber asustado a la mayoría de los inversores.

Original Story: Expansión – Marisa Anglés

Photo: Elena Ramón/EXPANSION

Translation/Summary: Richard D. Turner

Investments in Shopping Centres Falls Due to Concerns about E-Commerce

18 December 2019 – Investments in 2019 in shopping centres totalled €1.018 billion in the year to September, the lowest level since 2013. The volume of acquisitions in the same period was just 35% of the level in 2018, when it reached €2.9 billion. Analysts expect that total acquisitions for the year will reach between 1.500 and 2 billion euros, according to a report by CBRE.

The fall in investment in the sector is in large part due to the untrammelled growth in e-commerce even as sales in shopping centres remain robust. The revenues generated by e-commerce in Spain increased by 22.2% year-on-year in the first quarter of 2019, reaching €10.969 billion and an 8% market share.

Original Story: Eje Prime

Adaptation/Translation: Richard D. K. Turner

Investments in Zaragoza’s Logistics Sector Up 400%

14 November 2019 –In the first nine months of the year, firms in Aragon have invested 128 million euros, an increase of 400% compared to all of 2018. Investments in October and November have so far added another 45 million euros to the tally. The figures have established Zaragoza as a major logistics pole after Madrid and Barcelona, accounting for 10% of the investment in Spain as a whole.

A study prepared by CBRE notes that the increase is largely tied to two major transactions in the Plaza logistics centre, involving a total of 145,000 square meters. The deals have typically offered returns of between 5% and 6%.

Original Story: Heraldo – Chus García

Adaptation/Translation: Richard D. K. Turner

Residential Construction Falls in Barcelona

8 November 2019 – Crane rentals for construction projects fell by 8% in 2018, according to a new study by CBRE. While the cause of the fall is not clear, construction has primarily fallen in the residential sector. New residential construction projects fell by 4% this year, from 272 last year to 260 in 2019.

The construction of offices, hotels and commercial establishments rose by 37% to 37 projects, while there were another 25 projects involving residences for senior citizens and students.

Original Story: Catalunya Press

Adaptation/Translation: Richard D. K. Turner

Contracted Logistics Space Reaches 1.9-Million-m2 in the Year to September

21 October 2019 – The Spanish logistics sector allocated 1.19 million square meters in the year to September, a decrease of 14% compared to the year before. At the same time, however, investments increased by 16% to €1.302 billion, according to data from CBRE.

The allocation of logistics centre in downtown areas reached 432,000 square meters during the same period, a fall of 31% y-o-y. The market, however, reacted calmly to the decrease, as other transactions are expected to be finalised this year, according to the consultancy. Contracted space is expected to reach 600,000 square meters this year.

Rental costs continue to lead the market in Madrid and Catalonia, at 5.5 euros and 7 euros/m2/month, respectively.

Original Story: La Vanguardia / Europa Press

Adaptation/Translation: Richard D. K. Turner

Generali’s Axis Retail Partners Seeks to Acquire Two of Intu’s Shopping Centres in Spain

29 July 2019 – Richard D. K. Turner

Last March, Generali Real Estate, the real estate arm of the Italian insurer, announced the launch of Axis Retail Partners, a new subsidiary specialising in shopping centres. Axis received a 500-million euro infusion from the insurer.

This week, Axis is closing in on a potential acquisition of two of the most important assets currently on sale in Europe: the Puerto Venecia (Zaragoza) and Intu Asturias (Oviedo), two giant Spanish shopping centres listed for sale by the UK’s Intu Properties.

In a process led by UBS and CBRE, Germany’s ECE and Axis Retail Partners have appeared as two of the likeliest buyers, with Axis out front. Intu values its 50% stakes in Puerto Venecia and Asturias at around €425 million. Canada’s CPPIB, which shares ownership, declined to exercise its option to purchase the assets.

Original Story: El Confidencial – Ruth Ugalde

Private Companies Start Building VPO Rental Homes Due to Lack of Public Resources

11 June 2019 – Idealista

Housing and the need for public-private partnerships to build affordable homes was one of the hot topics during the recent election campaigns. But the reality is that the public administrations do not have the resources to fund any substantial residential programs.

In addition, Spain has traditionally been a country of homeowners and so most of the few affordable homes that the state has been building have been sold rather than put up for rent. This represents a major problem for the growing population of renters in the country, which some estimate currently account for 23% of total demand, compared with the European average of 34%. The Bank of Spain’s official figure for 2017 was 16%. Regardless, private companies are entering the market to fill the gap.

One such example is Azora, which has been managing social housing for rent since 2004 through its fund Lazora. It estimates that Spain needs 2.5 million mostly affordable rental homes to bring it in line with the European average. That would require an investment of approximately €300 billion over the next few years, a mammoth figure.

Azora actually sold its Lazora portfolio, containing almost 7,000 homes (private and social) to CBRE and Madison in 2018. They committed to continue investing capital in the sector and have already committed more than €200 million in various projects to build 1,200 more homes.

Azora still manages almost 14,000 social and private rental homes across the country and has recently been joined in the sector by the property developer AQ Acentor, the real estate arm of the German fund Aquila Capital. Specifically, AQ Acentor is planning to build 1,450 VPO rental homes in Villaverde, Barcelona, Valencia and Málaga. The numbers are not huge but they will go some way to plugging the gap.

Meanwhile, in the public sector, according to data from the Ministry of Development, 5,167 VPO homes were built in 2018, of which just 353 (6.8%) were dedicated to rental. In 2017, 4,938 VPO homes were constructed, the lowest absolute number since records began, of which 355 (7.1%) were dedicated to rental. Madrid accounted for most of the new VPO homes in 2018 (2,418, of which just 78 were dedicated to rental).

Azora considers that more institutional investment is required to make up for the housing deficit and that “to attract such capital, we need solutions and policies that promote and facilitate the construction of new rental homes”. It remains to be seen whether the politicians can put their ideological differences aside and come up with a clear and consensual housing policy for the benefit of the country at large.

Original story: Idealista (by P. Martínez-Ameida & Ana P. Alarcos)

Translation/Summary: Carmel Drake

The Grifols Family Buys a Sought-After Property on c/Velázquez in Madrid

7 June 2019 – El Confidencial

The Grifols family, the main shareholder of the pharmaceutical group of the same name, has purchased a sought-after building on Calle Velázquez, 21 in Madrid through its Socimi Centurion Real Estate.

Until now, the property had been jointly owned by the Gancedo family, which has occupied the commercial space on the ground and first floors for more than 70 years, and another family, comprising around 20 interested members, who owned the upper four residential floors.

According to various sources, last year, the Grifols family reached an agreement with the Gancedo family to purchase its share of the property for €20 million, in a deal brokered by Savills Aguirre Newman. The sale of the residential floors of the building is now being brokered by CBRE and is expected to close in September for €32 million, taking the total purchase price to €52 million, equivalent to €8,000/m2.

Created in 2014, Centurion has been famous until now as the landlord of the pharmaceutical company, given that it owns the four buildings that house the company’s offices in Barcelona, on Calle Jesús y María, and in Sant Cugat del Vallès. This represents the Socimi’s first major purchase in Madrid and sees its entry into the luxury home market in the heart of the Spanish capital.

Original story: El Confidencial (by R. Ugalde & E. Sanz)

Translation/Summary: Carmel Drake

Investment Funds Seek Land for Student Residences in Sevilla, Málaga & Granada

13 May 2019 – ABC de Sevilla

According to CBRE Spain, many investment funds are searching for land in Sevilla, Málaga and Granada on which to build new halls of residence for students. Ideally, they want plots that are located close to the university campuses or in well-connected areas of those cities.

Specialist student residence companies are also in the market for land, such as the company Syllabus by Urbania, which is actively looking for new plots in Sevilla and Granada.

The British firm Amro is already working on two projects, in Granada and Sevilla, and is now searching for land in Málaga, as well as in Salamanca, Alicante, Bilbao and Barcelona.

Similarly, Greystar, which is building a 322-bed hall of residence in Málaga, also wants to expand its footprint in Sevilla and Granada.

Lack of beds for students

In Spain, there are 1.5 million students, of which around 600,000 do not live in their home towns or cities. Nevertheless, there are less than 100,000 beds available for students and they are primarily located in Madrid, Barcelona, Salamanca, Granada, Valencia, Málaga and Sevilla. Moreover, most of the existing supply is obsolete. The need to expand and renew the stock is clear.

Original story: ABC de Sevilla (by María Jesús Pereira)

Translation: Carmel Drake