Patrizia is On The Hunt for New Purchases in Bilbao, Sevilla & Valencia

10 December 2018 – Eje Prime

Patrizia Immobilien is confirming its interest in the Iberian real estate market. The German investment manager, which has been present in Spain and Portugal since 2015, has set itself the short-term objective of entering Bilbao, Sevilla, Valencia and Oporto, through the purchase of new assets, according to comments made by Borja Goday, the Director General of the company in the Iberian Peninsula, speaking to Eje Prime.

Until now, the company has invested €870 million in total in real estate in the Spanish and Portuguese markets. Madrid, Barcelona, Málaga and Lisbon are the cities in which Patrizia is already present, “with minimum investments of €15 million but where that figure could exceed €500 million if the operation is worth it”, explained the executive.

In fact, the manager participated in the process to acquire one of the office buildings that comprise the Cuatro Torres Business Area in Madrid. Moreover, the company not only invests in the office segment, it is also committed to other markets such as the residential, retail, hotel, logistics and alternative asset segments (including student halls, complexes for the elderly and parking spaces).

Currently, Patrizia’s asset portfolio in Spain includes Serrano 90, located on Madrid’s golden mile and Gran Vía 21, also in the Spanish capital, which houses a hotel and a retail premise. Nevertheless, the latest major operation by the manager on the peninsula was the purchase of an industrial plot spanning 66,424 m2 in Toledo for €37.5 million. The other three logistics platforms that the company owns in Spain are located in Madrid and Barcelona.

Patrizia and its great interest in Spanish property

With its headquarters in Madrid and a staff of eleven, Patrizia arrived in Spain just three years ago. “At the end of 2017, we purchased Triuva and Rockspring, two companies that already owned assets on the peninsula”, explained Goday, who added that “the rapid growth of the group in both the Spanish and Portuguese markets is due to those two acquisitions”.

“Spain is still an attractive market, we still have demand and that is why we are launching new operations on such a frequent basis”, said the director. Since the beginning of the year, the manager has been on the hunt for capital from Spanish institutional investors, although, as Goday explains, it is not an easy task, since “they do not invest from one day to the next”.

One of Patrizia’s other plans on the peninsula is to strengthen its presence in the rental market. “It is a segment that we like a lot and for that reason, if we find an appropriate residential or office building, then we would not rule out buying it”, explained the executive. Nor does the group rule out alliances with Socimis or the acquisition of a property developer to grow in the Spanish residential sector. In this sense, Goday says that “a good opportunity has not presented itself yet” and that “it would all depend on the quality and location of the land that they own”.

Patrizia is currently present in more than twenty European countries, including, besides Spain and Portugal, important markets such as Italy, France, the United Kingdom, Ireland, Belgium and Luxembourg. The group’s main focus of activity is Germany, where it launched its activity 32 years ago and where it is a listed company (…).

Original story: Eje Prime (by B. Seijo)

Translation: Carmel Drake

Villar Mir Negotiates Partial Sale Of Fifth Tower To Hispania

29 September 2016 – Expansión

According to the businessman Juan Miguel Villar Mir, the Villar Mir Group has begun negotiations with the Socimi Hispania to join forces for the development of the fifth tower, the new skyscraper in the north of Madrid, next to the Cuatro Torres Business Area complex.

It is one of the most important buildings in the capital in terms of investment, given that the developers will need around €500 million to cover the construction and rental costs – an initial lease has been granted for a period of 75 years.

Sources at the family holding company have confirmed that preliminary conversations have begun, aimed at Hispania’s entry into the project “as a minority shareholder”. Other sources state that the Socimi, managed by the Azora group and in which George Soros holds a stake, may be interested in acquiring 100% of the building, which will be leased in its entirety. Nevertheless, the Villar Mir Group assures that it will maintain the majority stake.

The fifth tower project, which Villar Mir won at the end of 2014 in a tender organised by the Town Hall of Madrid, has already selected its tenants. Earlier this year, the IE Business School agreed to lease 50,000 sqm of the building for its campus. The bottom part of the complex, measuring 12,000 sqm, will house leisure areas, a shopping arcade and a health centre, which will, in theory, be operated by the Quirón Group. The project, promoted by the Villar Mir family, still needs to obtain the definitive permits from the mayoress of Madrid, Manuela Carmena.

Partners

In September 2015, the Swiss investment fund Corestate announced that it had agreed to form a joint venture with the Villar Mir Group to jointly develop the fifth tower. Six months later, in March 2016, Juan Miguel Villar Mir qualified that announcement by stating that the agreement with Corestate had not been signed yet. With or without Corestate, the negotiations with Hispania are happening at a time of peak activity for Spain’s listed Socimis. Hispania reached the final round of the tender to acquire the building, after it partnered up with Ferrovial, but Villar Mir won the 75-year lease by offering to pay an annual fee of €4 million, equivalent to twice the bid price. (…).

Divestments

The search for partners forms part of the strategy being pursued by the Villar Mir’s holding company to finance its multi-million investment commitments through Espacio and OHL, without increasing its debt, which amounts to €14,000 million. The other source of extraordinary income comes from the sale of its assets. (…).

The group needs funds to tackle its three major real estate projects (the fifth tower, the Canalejas Complex and the War Office in London), as well as several toll roads in Latin America.

Original story: Expansión (by C. Morán and R. Ruiz)

Translation: Carmel Drake

Villar Mir Sells Torre Espacio To Grupo Emperador For €558M

30 November 2015 – Expansión

Villar Mir has found a buyer for its Madrilenian skyscraper Torre Espacio. The group led by Juan Miguel Villar Mir has signed an agreement with the Philippine group Emperador for the sale of its 236m-tall office building, located in the Cuatro Torres Business Area in Madrid.

Emperador, the largest spirits company in the Philippines (it holds agreements with the Andalucían group González Byass) will pay €558 million for the property (around €9,200/m2), somewhat below the €600 million sales price that the seller was hoping to secure.

Inaugurated in 2007, Torre Espacio contains 60,000 m2 of office space, spread over 57 floors. It houses the offices of British American Tobacco and Red Bull, as well as the embassies of Australia, Canada, the Netherlands and the United Kingdom. Its occupancy rate is 85%.

The building’s main tenant is the Villar Mir group itself and its subsidiaries, which occupy 55.1% of the property. According to the President, Juan Miguel Villar Mir, the construction company and the other subsidiaries, such as Fertiberia and Ferroatlántica, will continue to have their headquarters in the Madrilenian skyscraper.

In fact, to make the purchase more attractive, the owner of OHL offered to remain as a tenant in order to guarantee rental income of €34/m2/month, according to real estate sources.

Emperador has succeeded in taking ownership of Torre Espacio despite being a very late joiner to the process, which was launched in June, when Villar Mir engaged the consultancy firm Aguirre Newman. In recent few weeks, the best positioned candidate has been the real estate fund Invesco. The real estate company Colonial had also initiated a due diligence process for the building, according to sources close to the operation. Other investors studying the purchase of Torre Espacio included Corporación Financiera Alba – owned by the March family – , the German fund Deka and Pontegadea – the real estate company owned by Amancio Ortega.

The Philippine group Emperador forms part of the Alliance Global business conglomerate led by Andrew L. Tan, who also owns real estate businesses through his company Megaworld. With this purchase, Emperador joins the huge list of investors that have purchased real estate assets in Spain in 2015.

Funding for OHL

With the transfer of Torre Espacio, Villar Mir will generate significant income, having reduced its stake in the listed companies Abertis and Colonial to cover its part of the €1,000 million capital increase in its construction company OHL. Villar Mir invested €400 million in the construction of the building, including the purchase of the land.

However, the businessman is not abandoning his real estate investments at the Cuatro Torres complex; he has been working on the construction of a fifth tower on an adjacent site for several months. (…).

The Villar Mir group is also working on the Canalejas complex, in the centre of Madrid, where it plans to invest €500 million.

Original story: Expansión (by R. Ruiz and C. Morán)

Translation: Carmel Drake

‘Quirón Salud’ Considers Opening A Hospital In The Fifth Tower

7 October 2015 – Cinco Días

The Quirón Salud group is currently considering opening a hospital in the so-called fifth tower, the skyscraper that the Villar Mir group is planning to build at the northern end of the Paseo de la Castellana, on land that was previously home to Real Madrid’s former Ciudad Deportiva. This step would enable the company led by Juan Miguel Villar Mir to construct this emblematic building.

The Villar Mir group was awarded the plot of land next to the Cuatro Torres in April. The company is planning to build a new skyscraper on the site and has always hoped that building would house a private health centre. The corporation won this project, through its subsidiary Inmobiliaria Espacio, but does not have any tenants for the property for the time being.

Initially, the sector thought that the US hospital group Mount Sinai was the most likely candidate to occupy the skyscraper, in its first expected foray into Spain, but the numbers did not stack up for the healthcare company – it concluded that the rental charge was too high for a social use building, according to sources close to the operation.

Now, the baton may be passed to Quirón Salud, the main private hospital group in Spain, which was created following the merger of IDC Salud (formerly Capio) and Quirón. According to sources at the company, it is currently evaluating the project. The company has 70 health centres, including the Fundación Jiménez Díaz, and manages several public hospitals in Madrid, as well as a number of prestigious clinics such as La Luz, San José and the Ruber, in the capital and Teknon and Dexeus, amongst others, in Barcelona. However, the company has not yet confirmed what kind of centre or facilities it would consider opening in the tower.

Two weeks ago, it was announced that Villar Mir will receive help from the Swiss fund Corestate Capital to construct the skyscraper. In a statement, the company announced that the project will require investment of €240 million, and although it did not specify how much each partner will invest, it did say that the possible tenants will be “a hospital, university or government body”. In fact, construction of the property is not expected to start until the tenant (client) has been identified so that the building can be tailored accordingly.

Over the last few days, the possibility of opening a business school in the tower has been evaluated. Some market sources insist that it will be hard for Quirón to make the numbers stack up to open a hospital in the skyscraper.

Villar Mir acquired the plot of land in a tender after presenting the highest bid; the company will pay the Town Hall an annual fee of €4 million for 75 years, in other words, €300 million in total. The plot has a surface area of 67,000 m2 and a buildability of 70,000 m2, of which 52,500 m2 must be allocated to social use (for example, a hospital); the remainder will be developed as retail space. That part is precisely what the hundreds of employees who work in the four adjoining towers want the most, given the lack of restaurants and services currently in the area.

Villar Mir also owns one of those skyscrapers, Torre Espacio, which is currently up for sale, with an asking price of around €600 million. The possible bidders include international funds, such as UBS, Aca, Corporación Financiera Alba and Pontegadea.

Original story: Cinco Días (by A. Simón)

Translation: Carmel Drake

Villar Mir Puts 5th Skyscraper On Hold To Focus On OHL

21 September 2015 – Expansión

Grupo Villar Mir has decided to put the project to construct a fifth tower in the Cuatro Torres Business Area on the Paseo de la Castellana in Madrid on hold. The project was going to involve an investment of €500 million, but instead the group will focus all of its financial resources on the clean up of OHL.

The construction company, in which the businessman Juan Miguel Villar Mir holds a majority stake (59.8%), has announced a €1,000 million capital increase to reduce its debt and strengthen its balance sheet. Villar Mir has been investigating different ways of obtaining the more than €500 million it needs to finance the operation and avoid a reduction in its stake in the company. The businessman has been forced to sell some of the capital that he held in two listed companies, Colonial and Abertis. He has raised €559 million through these two operations.

Moreover, at the end of June, Villar Mir engaged the real estate consultancy Aguirre Newman to sell Torre Espacio, the other skyscraper that the group owns in the complex on the Castellana. Villar Mir hopes to receive €650 million for the building. However, the process is being drawn out by the fact that, to date, the group has not received any offers that meet its expectations. The company has decided to invite more investors to participate in the process, which was initially scheduled to close this summer.

Grupo Villar Mir was awarded the plot of land behind the Cuatro Torres complex a few months ago….after it committed to pay an annual fee of €4 million for the use of the land for the next 75 years.

On the newly acquired plot, which has a surface area of 33,325 m2 and 70,000 m2 of buildable area, Juan Migual Villar Mir was going to allocate 53,000 m2 for social use (i.e. to provide some kind of public service). The remaining 16,500 m2 was going to be allocated for commercial use, with a further 33,647 m2 of green space.

Villar Mir had hoped to lease the building to a hospital group, which would dedicate the majority of the space to its own centre and the remaining floors to research. (…).

Tenant

Meanwhile, Villar Mir reached a pre-agreement with the USA company Mount Sinai, to open a Spanish branch of its prestigious New York medical centre in the future tower. However, the US firm was not convinced by the structure of the building; it would rather rent a less tall building, which is more practical for a hospital and with a more affordable rent.

Without a tenant, it will be difficult for Villar Mir to tackle such an expensive project. In addition to the €300 million that it will have to pay for the plot of land, by means of the annual fee of €4 million over 75 years, Villar Mir will have to spend at least another €140 million on the construction of the new building.

The group and especially its president do not want to give up on the project and are still working on a solution. The search continues for a tenant in the hospital sector or from the world of education, to open a centre of reference in the building. Another alternative for Villar Mir would involve the redesign of the project and the construction of several high-rise buildings, rather than a single skyscraper.

Original story: Expansión (by R. Ruiz and C. Morán)

Translation: Carmel Drake

Villar Mir Puts ‘Torre Espacio’ On The Market For €700M

30 June 2015 – Expansión

A new mega real estate transaction is taking shape in Spain, involving ‘Torre Espacio’ – the 236 metre tall skyscraper that the Villar Mir Group owns in the Cuatro Torres Business Area, in Madrid.

The Villar Mir Group, owner of the OHL construction company and the Espacio real estate company, has just put one of the most iconic buildings in the capital up for sale. According to sources close to the process, the property, which contains 60,140 m2 of office space, has an asking price of between €650 million and €700 million.

Villar Mir’s decision to sell the building, through a process organised by the consultancy Aguirre Newman, comes barely a month after the company was awarded the plot of land adjoining the Cuatro Torres, where it will construct a new skyscraper.

The sale of Torre Espacio, which opened in 2007, will generate significant capital gains for the company owned by Juan Miguel Villar Mir, which invested €400 million to buy the site and construct the building. That amount includes the €187 million it paid to purchase the land, as well as all of the financial expenses incurred during the construction period.

Torre Espacio, which was the first of the four buildings in the complex to open, has an occupancy ratio of 85%. Its tenants include the Villar Mir Group, some of its subsidiaries (Fertiberia, Ferroatlántica and Espacio), as well as the embassies of the UK, Netherlands, Canada and Australia.

According to initial calculations, when the tower is fully leased, it will generate annual income of €28 million.

Original source: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Sacyr Sells Its Subsidiary Testa To Merlin For €1,793M

9 June 2015 – Expansión

Strategy / The construction company cleans up its balance sheet with this transaction and improves its financial position, with a view to growing its international construction and concessions businesses.

Yesterday, Sacyr agreed the sale of its property subsidiary, Testa, to the Socimi Merlin Properties for €1,793 million. The group chaired by Manuel Manrique (pictured above right), which has been advised by the bank Lazard, has opted for Merlin’s proposal after rejecting the bids made by other investors such as the US fund Blackstone and the real estate company Colonial.

The agreement forms part of an “accordion operation”, in which Testa will simultaneously make a contribution to its shareholders of €1,196 million, through an ordinary dividend of €527 million and a reduction in share capital of €669 million. Through this transaction, Sacyr and Testa will normalise their balance sheets.

The sale comes just two days before Sacyr’s AGM, to be held on Thursday, where the Chairman of the group, Manuel Manrique, will reveal the foundations of the new industrial plan based on international construction and the development of concessions.

The largest Socimi

Merlin is the largest Socimi (listed real estate asset investment company) on the Spanish stock exchange, with a market capitalisation of €2,208 million and a portfolio of assets worth €2,594 million. The company debuted on the stock exchange on 30 June last year with €1,250 million of share capital from investors such as UBS, Marketfield and Gruss Capital.

Merlin, the real estate company controlled and chaired by Ismael Clemente (pictured above left), wanted to expand its assets with the purchase of a significant stake in a company in the RE sector and set its sights on Testa a while ago. Sacyr’s subsidiary closed yesterday with a market capitalisation of €2,906 million.

Sacyr holds a 99.93% stake in Testa; the remaining shares are listed on the stock exchange. The company has been looking for a partner for several months, to inject capital into its subsidiary. The search for an ally led Sacyr to consider an IPO of Testa’s shares aimed at institutional investors in order to strengthen its subsidiary’s balance sheet. The initial objective was to place 30% of the shares, but the construction company increased the option to 100%, once it had assessed the appetite of investors.

Merlin has more than enough financial muscle to handle this operation. In April, the company announced a capital increase amounting to €613.7 million. The real estate company, which earned €19.2 million during the first three months of 2015, has already invested the €1,250 million it secured from its debut on the stock exchange.

Testa owns real estate assets valued at €3,180 million, according to the most recent appraisal completed on 31 December 2014. Its properties include the Torre Sacyr, in the Cuatro Torres Business Area in Madrid, and Diagonal, 605 in Barcelona. It also owns two office buildings on Paseo de la Castellana, at numbers 193 and 83, where the construction group has its headquarters. Furthermore, it is the owner of several shopping centres in Malaga and on the Balearic Islands, and also owns residential blocks for rent. In 2014, Testa recorded turnover of €187.9 million.

(…)

Original story: Expansión (by R. Ruiz and C. Morán)

Translation: Carmel Drake

Repsol Courts HQ Sale To Finance Talisman Purchase

20 January 2015 – Expansión

Sale & Leaseback Transaction / The energy company is open to offers as it looks to sell its HQ property and continue as the long term tenant. Thus, begins another divestment plan to obtain financing of more than €800 million.

Repsol is exploring options for the monetisation of its new headquarters, a brand-new cutting edge property in the centre of Madrid, which opened a year ago and which has become the company’s flagship.

The energy company is sounding out the real estate market for offers, as it looks to sell the building and continue as the tenant under a long-term lease contract that would be reversible, i.e. a contract that would allow Repsol to repurchase the building at the end of its term. Such agreements, known as sale and leaseback agreements, have become popular in recent years, especially amongst groups with large property holdings, as they seek to optimise their finances.

The transfer of Repsol’s headquarters could be one of the largest real estate transactions of the year, at a time when the sector is showing clear signs of recovery. In the energy company’s favour, it has a solid position in the market, as an Ibex 35 listed company; something that would offset the location of its offices, which sit outside of Madrid’s financial district.

Repsol’s new headquarters are located on Calle Méndez Álvaro, in the central area of the city, inside the M-30 ring road, but far (6-7km) from the heart of the capital’s main business district, on the Paseo de la Castellana.

Occupying a total area of 123,000 square metres (66,300 above ground and 56,600 underground), the building, christened the Repsol Campus, was officially opened by the now King Felipe VI at the end of January last year.

The property, which stands on the site of old CLH (formerly Campsa) plots, was built by Sacyr. It cost almost €300 million in total, which included the purchase of plots (€155 million) and construction (€127 million).

The energy company, led by Antonio Brufau, is trying to obtain resources to finance the purchase of the Canadian group Talisman, a transaction announced last month that is valued at just over €10,000 million.

One of the key aspects that Repsol now has to focus on are the calculations for financing that purchase. The company announced that it is evaluating the divestment of assets that are “not linked to the price of crude oil” amounting to a billion dollars (more than 800 million euros at current exchange rates).

(….)

Repsol has been active in the real estate market in recent years. The energy company was one of four firms, together with Mutua Madrileña and the real estate companies Espacio (from the Villar Mir group) and Testa (Sacyr), that launched the development of the Cuatro Torres complex. Before its inauguration in July 2007, it received an offer from Bankia (then Caja Madrid) to sell its skyscraper, designed by the renowned architect Norman Foster, for €815 million.

With this amount, Repsol financed the development of its new headquarters in Méndez Álvaro. Prior to its opening, the company occupied 32,700 square metres at numbers 278 and 280 Paseo de la Castellana, in buildings owned by the real estate company, Metrovacesa.

Original story: Expansión (by M.Á.Patiño/R.Ruiz)

Translation: Carmel Drake

Madrid´s Skyscrapers Rents Reduced by 40% Due to the Crisis

The economical crisis hit with great power the prime rents of the financial heart of Madrid. The offices situated in skyscrapers can pay now 40% less than they did at the splendid times before the real estate bubble outburst.

The office zones considered the most exclusive in the capital lowered their prices from €42/m2 to €24.5/m2. The discount is even greater moving outwards the zone, points out  Ángel Estebaranz, the director of Officeline Business of Aguirre Newman.

Behind the M-40 highway, where the rental prices have fallen by about 20% more, the unemployment rate is equal to 19%, comparing to the prime zone where the rate oscilates around 10%, 4-5% if the Cuatro Torres Business Center exluded. (…)

Even so, the rental of the offices could close the year at 400.000 m2, which equals to 35 % more than in 2012 and 58% less than it was in 2007.

According to  Patricio Palomar from Research & Investment of CBRE, among the renting transaction of the year there is Vodafone with 50.682,8 m2 (…).

Also, Cepsa has rented the tower designed by Norman Foster to Bankia in the moment of acquisition of Caja Madrid, with a view to convert it into its premises (59.357 m2).

One of the most notable operations in the fiscal year were the ones of Iberia and Agencia EFE, which moved to more spacious offices.

There are not many office spaces of more than  10.000 m2 free left on rent (…).

Some companies returned to the city center attracted by the lower prices, an opportunity that Spain gives to the international investors, interested in acquiring office buildings rented to prime operators.

In 2004, the commercialization of the four great Madrid skyscrapers forming the business park known as Cuatro Torres Business Area (CTBA) was to coincide with the real estate market collapse in Spain.

Eight years later, the Crystal Tower (Torre de Cristal) is occupied in less than 30% . The Tower hosts such companies as: Adeslas, Seat, Affirma, Coca-Cola Iberian Partners, Olswang, Havas, Agbar, Thyssen Krupp, Banco do Brasil and, since January, Volkswagen Audi España.

The PwC Tower and Picasso Tower are fully occupied, while 85% of the Torre Epacio space is taken by offices of Villar Mir Group, British American Tobacco, Ubi bank and the embassies of the UK, Australia and the Netherlands. There is about 10% of spare space in the Realia and Europa Towers while in Titania Tower there are 18.000 m2 available. (…)

 

Source: Cinco Días