Tag: C&W

C&W Becomes Favourite To “Acquire” Aguirre Newman

16 May 2017 – El Confidencial

The most awaited marriage in recent times in the real estate sector looks like it is about to come to fruition. Aguirre Newman has chosen a favourite in its sales process, which it has delegated to Atlas, as El Confidencial revealed: the offer submitted by Cushman & Wakefield (C&W).

The firm led in Spain by Oriol Barrachina has presented the best offer, ahead of those submitted by Savills and Colliers, and its dream of becoming the new giant in the country, and of competing with CBRE and JLL for the leadership of the market, is starting to look like a real possibility, given that the merger of the two consultancy firms would create a giant with almost 670 employees.

Moreover, if the conversations between the two firms end up becoming reality, C&W will also take a step forward in its plans to grow in size in order to debut on the stock market, an option that it has been analysing since the beginning of the year. A year and a half ago, the consultancy firm completed a global merger with DTZ, and it is now aspiring to undertake another integration, in this case, in the domestic arena.

Sources at Aguirre Newman point out that “it is an open process, there are several options and interests in the running and nothing has been agreed. The company is continuing to analyse alternatives”. Amongst others, how to convert an operation that is theoretically an acquisition into a merger.

It has been precisely this question that has brought Stephen Newman closer to the posture being adopted by Santiago Aguirre, given that differences existed between the two partners regarding the benefit of initiating a sales process. Internally, the operation is viewed more like a merger and, in any case, it will require the agreement of the two partners to go ahead, given that together they control 75% of the share capital.

In fact, one of the elements that differentiates Cushman’s offer, according to market sources, is that, in addition to a juicy financial proposal, the firm has been much more flexible in terms of ensuring the continuity of the “Aguirres” and their decision-making power within the newly merged company.

With more than 400 professionals, revenues of €80 million and a gross operating profit (EBITDA) of €12 million, Aguirre Newman has been valued at between €80 million and €100 million. But its success story – it is the only Spanish firm that competes against the large multi-national firms – is going through a critical time for generational and business reasons, which was ultimately what triggered the sales process.

The fact that it is exclusively a domestic firm means that it is being left out of many projects, since large companies prefer to work with consultancy firms that can offer them international support, a growing trend in the face of the globalisation of the economy and that impediment is limiting the current structure of the Spanish firm.

An example of how the market is changing is the very sales process involving Aguirre Newman, given that the offers from both C&W and Savills, i.e. the two most important, are being led from London, according to sources familiar with the deal.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

C&W: Overseas Investors Will Spend $5,000M On Spanish Retail Sector In 2017

27 March 2017 – Observatorio Inmobiliario

The Spanish real estate sector will receive around $5,000 million of new foreign capital in its commercial spaces, according to the international Great Wall of Money report published by Cushman & Wakefield.

The study reveals that these figures remain at a similar level to those seen last year and place Spain in 13th position in the ranking of the leading destinations for real estate capital, ahead of countries such as Brazil and Italy.

At the global level, the real estate services company calculates that the volume of added capital for real estate investment in 2017 will amount to $435,000 million, a slight decrease compared to the peak of last year, but still the second highest figure since 2009. (…).

The amount of capital invested in the EMEA region will decrease by 9%, to $130,000 million, whilst the amount invested in the Americas region will rise by 2%, to $173,000 million. Meanwhile, the continent of Asia will also experience a slight increase in its level of investment, to $132,000 million, whereby exceeding that seen in the EMEA region. (…).

In addition to the new investment strategies, new sources of capital are expected to open up in several different parts of the world, with countries such as China, Malaysia, Taiwan and South Africa leading the way.

More concentrated investment strategies

Investors are increasingly focusing on single countries rather than deploying capital across multiple borders. Investment in single states now accounts for 61% of available capital, up by 55% over the last three years. According to Cushman & Wakefield’s estimates, the United States will likely remain the largest target investment market in 2017. Although activity there slowed during 2016, the volume of money is still high and many investors continue to have a low allocation of resources in the sector.

China is expected to continue as the second-ranked destination country, with the majority of capital invested there coming from domestic funds. (…). The third most attractive market is the United Kingdom, although Cushman & Wakefield expect the volume of capital being directed there to decrease somewhat, due to the prudence of some investors in light of the Brexit negotiations (…).

The USA exceeds the EMEA region

For the first time, the Americas ($79,000 million) have more equity available for investment than the EMEA region ($72,000 million). (…). The decrease in the volume of equity available in EMEA is to a large extent, the result of the high dollar. Almost 80% of the funds focusing on Europe present their results in Euros or Pounds Sterling, and so the currency effect represents a key component. (…).

Original story: Observatorio Inmobiliario

Translation: Carmel Drake

Interview With Rupert Lea, Partner & Retail Director At C&W

3 February 2017 – Eje Prime

Rupert Lea, Partner and Retail Director at Cushman & Wakefield, analyses the evolution of the retail sector over the last year. “There has been an increase in high street operations, but the deals involving shopping centres have really taken the lead and are positioning themselves as a trend for the next two years”, he said, in an interview with Eje Prime.

Question: Now that 2016 is over, what assessment would you make of last year in terms of retail operations?

Answer: In terms of the volume of transactions, it was somewhat better than 2015. But now, the great trend that we are seeing are shopping centres. We have seen more operations involving shopping centres and retail parks: between 2009 and 2013, there was minimal rotation; investment volumes decreased until 2012. (…). Now, investment is growing at a rate of 50%, driven primarily by the capital markets.

Q: What will 2017 be like?

A: The retail market is a wave: it rises and it falls. Demand will continue to be constant and will have the same strength for the next two years. What sets the tone is the availability of supply, something which fluctuates a lot more in the case of shopping centres and centres that are not prime. (…).

Q: In 2017, several important operations that were closed years ago will bear fruit, for example, Uniqlo, H&M…Is the pace of operations still active?

A: Yes. We negotiate with operators from all sectors who are interested in Spain, including those who want to continue to grow brands that already operate in the country. There is still scope for more flagships to be opened in Spain in very profitable locations for operators, but they have to be experienced stores. That is another trend that is growing strongly. (…).

Q: Can we say that the sector has recovered its pre-crisis rhythm?

A: Any references to pre-crisis are complicated, because periods cannot be compared. What we can say is that some values have now reached higher figures (than pre-crisis), and some other values have not. Monetary policy and investor spirit have changed.

Q: What is the thing that interests operators the most in Spain?

A: Appropriate area of influence, robust consumption, suitable locations and suitable store sizes. The latter is the most difficult to achieve, because there are stores on prime streets that do not fulfil the requirements. Spain has a culture that involves a lot of socialising on the street and that generates a lot of opportunities for retail businesses. The success of tourism is also important for operators to take into account; millions of people visit the country each year and that is like the icing on the cake for retailers. (…).

Q: Do you think that the boom in e-commerce will put an end to the development of retail?

A: E-commerce is a complement. We see e-commerce as an ally: it was born as a challenge for high street traders, but we are seeing successful cross-market formulae. We have online operators who are looking for locations so that users on the street can observe their presence. We also have inverse cross-market formulae: customers want to return in store goods that they purchase online. This is the era of omnichannels, and e-commerce is clearly a complement. (…).

Original story: Eje Prime

Translation: Carmel Drake

Large Funds & Socimis Invest €2,500M In RE In Q1 2015

20 April 2015 – Expansión

Q1 2015 / Major international investors and Socimis purchased more non-residential property in Spain during the first quarter of 2015 than during the whole of 2012.

The investor frenzy that began in the Spanish real estate sector at the end of 2013 and intensified last year is on track to smash all historic records (this year), including the peak levels of the boom years. Between January and March, large international funds, companies from Spain and the rest of Europe and new listed real estate real estate investment companies (Socimis) made purchases worth €2,463 million, according to the consultancy firm C&W, i.e. three times the volume recorded during the same period last year.

This figure exceeds the total volume of investment made during 2012 in its entirety, when the global crisis really hit the Spanish real estate sector and only €2,087 million was invested in the market, according to Deloitte Real Estate. Having been boosted by domestic and international purchasers who spent more than €8,500 million in 2014, the start of this year reflects a “unique” time in the sector for various reasons, according to market experts.

On the one hand, the Spanish economy is recovering well, which is resulting in higher consumption and more recruitment, which is in turn influencing commercial and office buildings.

On the other hand, the decrease in prices, of up to 40% in the case of assets, has meant that many opportunities exist in terms of price in the Spanish market, in contrast to what is happening in other European countries. “The low profitability of fixed income assets has turned real estate into an important sector in terms of investment portfolios. Furthermore, prices are stabilising, access to credit is opening up and the economy is growing”, say sources at Aguirre Newman. The confluence of these elements has led all of the players in the real estate sector to show their support Spain: from the most opportunistic funds seeking properties with significant discounts to more institutional investors, such as sovereign and pension funds, and including Spanish and foreign real estate companies.

Battle for assets

All of this has led to a real war for the best assets (known in real estate jargon as trophy buildings), which means that this year looks set to be a record year in terms of purchases. “We expect to see great figures in 2015, approaching €7,000 million in terms of direct non-residential investment”, explain sources at JLL España.

“If the level of interest in Spanish real estate assets from major global investors continues for the rest of the year, then we could see historic record figures in 2015, even higher than the peak recorded in 2007, when transactions with a total value exceeding €12,000 million were closed”, add C&W.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake