18 May 2018 – Expansión
The real estate asset manager CBRE Global Investor (CBRE GI) is redoubling its commitment to Spain. After ending last year with a record investment of €800 million and starring in several mega-operations, the firm wants to establish a new record this year, exceeding the milestone set in 2017. From its offices in Madrid, CBRE GI manages assets worth €3.2 billion in the retail, office, logistics and student hall sectors, located in Spain and Portugal, and is getting ready to enter the residential sector.
“Last year was very important given the significant transaction activity undertaken, of which €800 million corresponded to purchases. This year, we hope to match that figure and even exceed it”, explained Antonio Simontalero, Head of Operations for Spain and Portugal at CBRE GI, speaking to Expansión.
The firm works with eight funds and owns a portfolio comprising 19 shopping centres, 37 logistics platforms, three office buildings and 33 halls of residence for students.
Although retail is still the main market for the manager, accounting for 70% of its portfolio, CBRE GI has decided to attack new businesses. Thus, last year, it entered the market for student halls with the purchase, together with AXA IM Real Assets and Greystar, of Resa, the market leader in Spain, for €400 million. “We are continuing to analyse opportunities in the student hall market. We want to grow the portfolio and increase our exposure”, says Antonio Roncero, Head of Transactions for Spain and Portugal at CBRE GI.
Another milestone in 2017 was the consolidation of the manager in the logistics sector following the joint venture signed with Montepino for the development and promotion of logistics assets. “The initial objective of the investment in the joint venture with Montepino was €300 million, but we hope to exceed that figure soon. With the developments underway, we have 80% of the investments committed”.
Simontalero points out that CBRE already had 700,000 m2 of logistics assets under management and the agreement with Montepino will allow the firm to exceed the 1 million m2 threshold. The logistics sector is thereby becoming the manager’s second segment by volume, accounting for almost 15% of its total assets. “The differentiating feature of this joint venture is that all of the assets are going to be latest generation, which is what the main operators require”, adds Roncero.
In terms of next steps, CBRE GI is preparing to attack a new market, specifically, the residential rental market. “We are analysing various options with different partners, either through the development of new-build properties or by investing in a business through the purchase of portfolios”, say the directors.
For Simontalero, the size of the rental market vs. the purchase market in Spain is going to grow and will move into line with the rest of Europe. “There is latent demand that is not being fully satisfied with the current supply in the market”, he said.
For Roncero, the key is in the service. “We see an opportunity for offering a professionalised service in the rental home segment, providing security to the tenant and placing emphasis on the maintenance of properties”.
Roncero says that the objective of CBRE GI involves gaining “critical mass” in the sectors to which it is least exposed in order “to diversify and be more versatile”.
In addition to growing its portfolio with new properties, the company is continuing to rotate its assets. Specifically, last year, it sold four shopping centres (two in Spain and two in Portugal), and it is now preparing to sell three more – Gran Casa (Zaragoza), Valle Real (Cantabria) and Max Center (Barakaldo) – whose ownership it shares with Sonae.
“Our business involves identifying investment opportunities, managing them and selling them to generate returns for our investors”, he said.
Original story: Expansión (by Rebeca Arroyo)
Translation: Carmel Drake