Espacio Caleido to Build up to 80 Commercial Premises in Madrid’s Fifth Tower Complex

4 June 2018 – Eje Prime

More retail space in Madrid. Espacio Caleido, controlled by the company Inmobiliaria Espacio, is going to build between seventy and eighty retail premises in the fifth tower complex in Madrid. Together, all of the establishments will have a combined commercial area of more than 13,000 m2.

The commercial premises will be destined to retail, restaurant and service operators, which will be located in a zone divided into several areas (some next to the tower) and which will include gardens and rest spaces next to the shops and restaurants.

One of the areas that will be most representative will be formed “by ten cubes that will be located parallel to Paseo de la Castellana and which may be customised by each operator”, said Espacio Caleido. To market the premises available in the complex, Espacio Caleido has already opened an office to show the plans to companies interested in moving there.

The Torre Caleido project, which is being built alongside the four tallest skyscrapers in Madrid, will involve an investment of €300 million. It will span 70,000 m2 in total, stand 165 m tall and contain 36 storeys.

The fifth tower is going to be the shortest of the five skyscrapers and its neighbour, Torre de Cristal, will continue to be the tallest in Madrid, and in Spain, at 249 m tall.

The new complex, which is being built in the Cuatro Torres Business District, will have Instituto de Empresa (IE) as its main tenant, which will create its university campus IE University there, and the Quirón Salud Group, which is going to install an advanced medicine centre in an annexed building that will be four-storeys tall and 20 m high.

The project is being promoted by the company Espacio Caleido, owned by Inmobiliaria Espacio, of the Villar Mir Group, the main shareholder of OHL, with a 51% stake, and by the Philippine company Megaworld Corporation with the remaining 49%.

Original story: Eje Prime 

Translation: Carmel Drake

Investment In Offices Soars By 85% In H1 2015 To €1,300M

21 July 2015 – Expansión

Real estate investment in office buildings soared by 85% during the first half of the year to reach €1,300 million and whereby record “one of the best results in the last twenty years”, according to data from Aguirre Newman.

Madrid accounted for three quarters (75%) of the total investment, which was mostly concentrated in the business district of the capital.

Aguirre Newman attributes this remarkable increase in real estate investment (which does not include Merlin’s purchase of Testa), to the “consolidation of the growth of the economy”, the “return” of financing and the prospects of recovery in office rental prices in Spain, which are currently offering higher returns that investing in the stock market.

The firm considers that this “strong investment activity” will continue during the second half of the year, given the operations that are currently in the pipeline, such as the sale of Torre Espacio, one of the four skyscrapers in the Cuatro Torres business district, which the Villar Mir Group is looking to sell, but continue to occupy as the tenant (…).

Socimis and institutional investors led the real estate purchases during the first half of the year – they accounted for almost two thirds (65%) of the total acquisitions made.

On the sales side, financial institutions, insurance companies and institutional investors were the main sellers of property.

The interest shown by investors in office buildings has stemmed from the recovery that the sector is experiencing. During the first half of the year, the rent paid for those kinds of buildings increased by 23.7% in Madrid and 49% in Barcelona.

During H1 2015, in the capital, lease contracts were signed for offices with a total surface area of 262,790 m2 and in Barcelona, the figure was 177,499 m2.

Therefore, the average price of rents continued to rise, to reach €25.35/m2/month in Madrid, where prime rents are now €31/m2/month; meanwhile the average rent in Barcelona is €15.96/m2/month.

Aguirre Newman is confident that the increases in demand for office space and in office rental prices will continue for the next few months.

Original story: Expansión

Translation: Carmel Drake

Villar Mir Guarantees Torre Espacio’s Buyer Rent Of €26M

3 July 2015 – Cinco Días

Inmobiliaria Espacio, which forms part of the Grupo Villar Mir, wants to generate the maximum amount from the sale of the iconic Torre Espacio, one of the four skyscrapers constructed on Real Madrid’s former Ciudad Deportiva. To this end, it is willing to guarantee 100% of the building’s rental income, and pay the difference if the new owner does not reach the maximum occupancy rate.

According to sources close to the operation, Villar Mir has put a figure on the table of €26.4 million per year. This means that the purchaser will receive the same monthly rent, regardless of the occupancy rate of the building.

Torre Espacio, which has 57 floors and is 230m high, has a total leasable area of 60,142m2, as well as 1,173 parking spaces. The building currently has an occupancy rate of 85%. Companies in the Grupo Villar Mir occupy 55% of the leasable area and the corporation, which is controlled and chaired by Juan Miguel Villar Mir, will continue to rent offices in the skyscraper. The other tenants include four embassies: Canada, UK, Australia and the Netherlands.

The real estate company has offered to guarantee rental income of €35 per m2 per month, which represents an annual rent of €25.2 million. In addition, the rental cost of the parking spaces amounts to another €1 million, which takes total annual rent to €26.4 million. Inmobiliaria Espacio would retain control of the rental management of the property and of finding tenants. Nevertheless, it is likely that some investors will waive their right to the guarantee, as they will prefer to take care of the management side themselves.

With this commitment, the real estate company thinks that it will come close to the €600 million asking price for the sale of the tower. That would represent an annual yield of 4.40%, but that is rather low, according to market sources; if interest rates rise over the next few months, the viability of the tower’s financing may be put at risk.

Villar Mir has set a minimum asking price of €500 million, which represents a valuation of around €8,500/m2. The market considers that price to be high, since Pontegadea, the family office owned by Amancio Ortega, paid around €5,000/m2 for its acquisition of Torre Picasso, and the March family paid around €7,500/m2 for Ahorro Corporación’s headquarters in Castellana, 89.

On the plus side, Villar Mir’s real estate group may benefit from increased liquidity in the market and the interest shown by international funds in the recovery of the country. Even so, analysts do not expect that many candidates will have the capacity to invest €500 million or €600 million in an asset that is not in Azca, the prime business district in Madrid. (…).

‘Due diligence’

The group chaired by Villar Mir has launched an accelerated process for the sale of the building. Anyone wishing to becoming the new owner must submit non-binding offers by next Tuesday. The real estate company expects to choose the best offer during the course of the week.

Then, the candidate with the best offer will begin the due diligence process, which will last for three weeks, until 29 July – all of the experts in the market consider this timeframe to be tight. The binding offer will be made by 29 July and the transaction will be closed during the first week of August.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake