Investment in Non-Residential RE Reaches €5 Bn, Up 34% Over Entire 2013

30/10/2014 – Expansion

During the first nine months of 2014, a nearly €5.04 billion amount was spent on the Spanish real estate. The score beats the 2013 figures by 34%, reports BNP Paribas Real Estate.

The company estimates that the data ‘reflects sustainable interest of investors, both domestic and foreign, in a market offering prices close to the bottom levels’.

BNP says Socimis (Spanish REITs) contributed to the numbers significantly as they have spent €2 billion on residential and commercial real estate in Spain.

The firm claims that beyond these vehicles stands the ‘unsatisfied appetite of international investors who invested the equity throught various formulas’.

Most 2014 active so far have been the Northern American, the British, the Asian and the Latin American investors. Speaking of the asset types, prime retail parks are considered the engine of this year’s bumper investment as they account for 32% of the total, although behind the office sector (34%). Hotels repesented 20%, while logistics units 9% of the whole investment volume.

The Investment director at BNP Paribas Real Estate España, Francisco Manchon, stated that ‘2014 is exceptional in terms of real estate spending. The market has stayed at its lows when it comes to return and capital value since the end of 90s and this drew attention of those who found out that Europe alternative markets are worn-out’, the executive highlighted.

 

Original article: Expansión

Translation: AURA REE

Third Quarter 2014 Brings Astonishing 240% YoY Increase in RE Investment

24/10/2014 – Expansion

The tertiary sector clutches its head in disbelief on news that year-on-year the total investment in the Spanish real estate advanced by a staggering 240% and hit €3.5 billion in the third quarter of 2014, says advisor CBRE.

Year-to-date, an amount of €6.5 million was spent on the country’s properties. Also, this is the first quarter with such a great volume since the real estate bubble burst in 2007.

‘If the trend persists, the year 2014 will undoubtedly be key for the new cycle’, assures Investigation and Investment Strategies director of the firm, Patricio Palomar.

Spain ranks the third in Europe as one of the countries where most money was spent on the real estate, outrun by the United Kingdom and Germany.

Almost 80% of the total investment focused on the office (37%) and retail (41%) markets. Most active buyers were foreign (56%), with prevalence of the European.

About 39% of the foreign equity came from other European countries like the UK, Germany, France, the Netherlands, Switzerland, but also from Qatar, Singapore, India or China as these countries increased their interest significantly.

Moreover, large transactions have been closed by investors originating from markets considered emerging, such as the Asian-Pacific area and Southern America.

‘The fact that opportunistic purchasers gave way to more cautious ones proves that Spain gradually advances in the cycle after having hit the bottom or even positioning on the growth curve in case of some more defensive assets’, adds Mr. Palomar.

The property manager believes there will be more large-volume deals sealed still in 2014 and new players are expected to arrive at the market, such as specialized funds or even insurance companies, domestic and international alike.

 

Original article: Expansión

Translation: AURA REE

Wanda, Merlin & KKR Drive the RE Investment Up to €10.4 Bn

15/10/2014 – Expansion

All the evidence is that the year 2014 will conclude for the real estate sector at the pre-recession levels. During the first nine months of the year, €10.4 billion was invested in assets and companies, reports advisor Aguirre Newman. ‘All kinds of buyers, from vulture funds, through institutional investors, private equity, insurance firms, up to new Socimis (Reits), have been interested in acquiring Spanish property over the last year’, enumerates Alejandro Campoy, Investment director for Aguirre Newman.

Splitting the total amount, more than €4.9 billion corresponds to sale of non-commercial property. ‘In 2013, the total investment amounted to €9 billion, to which €5 billion was deriving from tertiary assets sales (i.e. offices, retails, hotels and industrial/logistic warehouses). By the end of September, the 2013 score has been beaten and we predict that the year will end at the 2006 level as the time on the market was extraordinary’, highlights Mr. Campoy.

Retail Parks

When it comes to the commercial real estate, Socimis like Lar España or Merlin Properties, as well as international funds like Baupost or KKR, altogether invested €1.15 billion in 21 shopping malls. Moreover, Spanish family offices strived at retails putting up €360 million in total (elevated to €1.1 billion if the branches of BBVA bought by Merlin taken into account). Furthermore, there has been €366 million amount spent on logistic warehouses and industrial platforms, while on hotels, €800 million.

Apart from the traditional deals, 2014 saw a great return of products that have been avoided like the plague since the real estate bubble burst: land and residential projects. Thus, €1 billion was injected in land portfolios, as well as in rehabilitation and debt-related assets.

Widely known sales of real-estate-owned property managers of banks (the servicers) have attracted big-name investors. ‘Financial transactions with underlying property (i. e. real estate-backed loan portfolios) revived the market. In total, €4.4 billion was disembursed in debt portfolios and €112 million spent on the servicers, adds Alejandro Campoy.

 

Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE

Twofold Increase in CRE Investment

13/10/2014 – Mercado Dinero

From January throughout August, in Spain, investment in retail parks amounted to €1.26 billion proceeding from 24 operations, reports property advisor BNP Paribas Real Estate.

Currently, shopping malls account for 91% of all retail investments in Spain. The segment represented 35% of the entire €3.5 billion amount spent on non-residential assets in the first eight months of 2014.

Although dominated by the foreign equity, investment in shopping centers can be equally divided between overseas and domestic investors due to vivid activity of the freshly listed Spanish Reits – Socimis. Most of the foreign funds come from the Northern America, the United Kingdom and the Netherlands.

When it comes to the investment target cities, Madrid wins with seven deals totalling at €392 million.

It is predicted that employment and consumption will drive the transactions up.

 

Original article: Mercado Dinero

Translation: AURA REE

Zara Store Expansion & Hotel Refurbishment Soon on Gracia Street, Barcelona

10/09/2014 – Inmodiario

Even though still there is much left to do, the Inditex group and builder Luis Cases have reached pretty far with their plans to accomplish a project on the downtown Gracia street in Barcelona.

Their objective is to amplify the Zara shop and refurbish a hotel establishment standing along this popular street. Moreover, the project involves construction of a parking lot.

Four years ago, a project on renovation of the buildings numbers 1 to 13 of the Caspe street crossing the Gracia was approved. Right to the 4.900 square meter area belongs to Drassanes 30 SLU, owned by Cases. If the volume and the use of them is preserved, the two investors will not have to draw any new plan.

The 2010 project assumed a €50 billion investment, including a 734 square meter housing development distributed over five floors above the ground level.

Zara would grow by 4.000 square meters added to the present 2.500 square meter area. The new floor area would derive from the old Novedades cinema, standing unused over the past eight years.

The larger Zara store will even beat with its size the current flag shop of the textile group situated on the Serrano street in Madrid.

The hotel space mentioned before is presently rented by the Husa group which finds itself in serious financial troubles. Its bankruptcy affected both 11 establishments and 369 employees. When Husa leaves the hotel, it will be converted into a luxury unit.

 

Original article: Inmodiario

Translation: AURA REE

Trade Premises Market Stirred Up by the End of the Old Rental System

25/08/2014 – Expansion

The deadline for re-negotiating of many rental agreements which were signed before 1985 will pass on December 31st. The ambiguous system has caused many unprecedented situations over the years, especially when it came to the most desired commercial spots in popular streets of Madrid and Barcelona.

Cases are known when a tenant of a shop located in a prime area of Madrid has to pay 200 Euros for a square meter in monthly terms‘, says Robert Travers, Retail Director at Cushman & Wakefield. In Barcelona, the prices rise to 211 Euros/sq m/month.

‘Currently, in the streets where the habitual monthly price ranges from 200 and 350 Euros, there are tenants who for the fist-line commercial premises pay 10 Euros per square meter monthly’, specifies Eduardo Rivero, the CEO of advisory firm Ascana.

Although the contracts will remain valid until December 31st, their effect started to shake the market some time ago. Above all, high street trade premises whose agreements are unnegotiable, come as the target of investors.

Moreover, as usual in the real estate market, the impact is noted differently in the downtown streets than in the secondary areas. ‘The expiration of the contracts has been awaited by landlords for many years. Now, their returns will multiply by 1.000’, Rivero assures. ‘Spain’s prime areas will see pockets of opportunities. The legal amendment will for sure enhance many premises to go out to the market but it will not mean a boom in availableness’, says Noelia Lopez, responsible for the Commercial Streets at JLL Spain. 

‘Today, there are still well-located businesses that fared great over all these years thanks to low rental costs. Unfortunately, they would lose their viability if they had to pay the present quotes. This kind of tenants will be replaced with new investros’, explains Sergio Agüera, Corporate Partner at the Perez Llorca lawyers’ office. 

The opportunities will not go unheeded among the investors who seek well-situated but not necessarily big commercial spaces. ‘In Madrid, in-demand destinations are the Gran Via, the Preciados, the Serrano and the Fuencarral streets. Giant clothing brands and restaurants will look for over-400 square meter space, whereas smaller traditional companies will be pleased with 50 square meter areas’, tells the JLL expert.

Non-Downtown Areas

However, if it comes to secondary or peripheral zones, vacancy rates are believed to go up as the majority of landlords in these areas will probably opt for not renewing the rental contracts in fear of losing their long-term tenants.

 

Original article: Expansión (by R. Ruiz)

Translation: AURA REE

Commercial Real Estate Investment Boom

31/07/2014 – ExpansionPro

The latest transactions involving the Anec Blau and the Albacenter shopping malls shall be added to a pool of commercial properties which have changed hands in the past twelve months in Spain.

“Investor´s appetite for shopping centers boosted at the end of 2013 but the turning point has come just now. Commercial real estate purchase figures multiplied by six if the first half of 2014 compared with H1 2013″, explains Gonzalo Senra, the Commercial Investment Director for CBRE.

According to a report by BNP Paribas Real Estate, the CRE accounted for around 38% of all transactions closed in the first half of the ongoing year. Thus, out of the total of €3.23 billion invested by the end of June, over €1 billion was spent on shops and shopping malls.

By the purchaser profile, institutional funds and REITs represented 64% of all. The biggest volume acquisitions crossed €100 million. To give an example, the El Boulevard shopping park in Vitoria was bought for €130 million, whereas the Gran Vía de Vigo unit, also sold by CBRE Global Investors, changed the owner for €113 million.

Original article: ExpansiónPro

Translation: AURA REE

Investment in Spanish Real Estate Doubles in H1

14/07/2014 – Expansion

The property investment in Spain keeps climbing up driven by the change in perception of the country and the closing of significant operations by the “bad bank” observed since last summer.

During the first six months of 2014, non-residential assets (i.e. offices, commercial centers and retails, hotels, logistics hubs, parking lots and hospitals) purchase reached nearly €3.23 billion, compared with the €1.45 billion registered in the same period of time in 2013. The figure is staggering mostly due to the fact that the most robust activity usually occurs in the second half of the year. For instance, in 2012, only a €697 million amount was invested in H1.

Forecasts

“In summer 2013, there has been a turning point which allowed to conclude the year with a €3.8 billion investment volume. Now, we predict the year 2014 to end up with €6 billion, maybe even €7 billion”, says Patricio Palomar, the Research director at CBRE.

During the first quarter of the year, buyers spent €988 million on the Spanish property, by 132% more than in Q1 2013. Another €2.2 billion was invested from March to June.

While in the last months of 2013 most of the purchases were conducted by opportunistic funds, presently they are buyers of all kinds. For instance, Canadian fund PSP and Spanish Drago Capital acquired the Castellana 200 commercial & office complex for €140 million, after a controversial sale process at which the first winner was fund Anchorage.

Also, there has been another mega-transaction by Chinese magnate Wang Jianlin, president of the Dalian Wanda group, who paid €265 million to Banco Santander for the Edificio España building. The richest man in China is planning to invest in the property, converting  it from an abandoned office to high-end residential and hotel space.

When it comes to asset typology, offices and commercial real estate (shops in the streets and malls) made over a half of the total investment with several transactions involving over €100 million paid for a building.

Precisely, four edifices in Madrid and one in Barcelona: the Edificio España, the Castellana 200, the Vodafone headquarters purchased by London & Regional Properties for €117 million from Banco Sabadell, as well as the IBM central premises acquired by Mexican Finaccess for around €130 million. In Barcelona, Axa Reim paid €107 million for the tower housing Telefónica also known as Diagonal 00.

Shopping parks

In this segment, operations exceeded €100 million each as well. To illustrate, the purchase of six properties for €160 million by Baupost, GreenOak and Lar, or €115 million paid by U.S. fund Oaktree to CBRE Global Investors for the Gran Vía de Vigo shopping mall.

In total, the CRE investment this year multiplied by 5 compared with the previous year when the acquistions were principally focused on retails on the commercial streets in main cities instead of on large properties.

If it comes to the hotel sector, such significant sales as of the Intercontinental establishment in Madrid, included in a four-unit lot in France, Germany and Rome. The Spanish hotel was valued at €60 million. Also, Hispania the Socimi (REIT) paid €23 million for the Hotel Guadalmina in Marbella.

 

Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE

“We Are Going to Invest in the First-Class Shopping Parks”

3/07/2014 – Expansion

Less than one year old, investment management company TIAA Henderson Global Real Estate already possesses a €49 billion worth portfolio with assets scattered around Asia, Europe and the United States. Its developers are TIAA Cref and Henderson Global Investors, present in Spain since 2007 and managing almost €15 billion in property.

The latter runs five shopping malls in the country: the Nervión Plaza in Seville, the Miramar in Málaga, the L’Aljub in Elche, Getafe Bulevar in Madrid and the recently acquired Espacio Coruña. Moreover, the arm owns two medium-size parks: the Parque Mijas in Malaga and the Parque Meixueiro in Vigo, as well as a logistics platform in Madrid. As the company´s general director for Europe, Mike Sales, says “they are quality assets which maintained fair occupancy during the crisis, now faring much better.”

“We would like to invest in the entire Old Continent and Spain seems attractive to us. We are focused on the commercial real estate and we want to find partners among local, core and core-plus shopping center owners and investors”.

 

Original article: Expansión (by R. R.)

Translation: AURA REE

Bumper Investment in the Commercial Real Estate

3/07/2014 – Expansion

Real estate investment in Spain clearly focuses on one asset type: shopping centers. They have been calling attention of foreign investors since last year and the buying apetitte has not ceased until now.

Thus, throghout 2013, investment in the commercial assets (malls, locals and medium-size stores) reached €1.19 billion. It is by 69% more than a year earlier. The transactions carried out in the first quarter of 2014 exceeded €1.4 billion.

Oaktree, Baupost, KKR and GreenOak are among the funds that decided to purchase the CRE in Spain this year. Some experts claim the opportunistic funds will have to soon give way to institutional investors.

In September, five more shopping malls will join the “for-sale” list which is currently composed of eight of them.

The conclusion of the first half of the year with a €1.5 billion investment (including the sales of property-backed loans) inclines one towards a prediction that at the end of the year the sector will witness a decade record of over €2.7 billion. Shopping centers will presumably represent 60% of the amount.

One of the most convincing factors for the buyers is the turnover settled above the European average, even if it is declining gradually. Last year, yields fell by 16% on average, landing at 15 Euros per square meter monthly, dipping down in case of small parks with an over 32% vacancy.

In 2014, no more new malls are expected to be built, although some of the existing ones may opt for expanding their areas.

 

Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE