Deka Sells Eleven of the Stores it Acquired from Inditex for €105 Million

14 October 2019 The German investment fund Deka has sold eleven of the stores it acquired from Inditex for a total of 105 million euros. The firm stated that the sale was intended to “cover expenses” since the sales price was already 5% higher than Deka had paid for the assets.

Although Deka had initially intended to find a single buyer, the firm ended up selling the assets to an array of mainly local investors.  Deka sold assets located in Albacete, Palma, Sevilla, San Sebastián, Ciudad Real, Zamora, Fuengirola and Lisbon. The firm is also finalising the sale of a store in Córdoba.

Original Story: Eje Prime – Marc Vidal Ordeig

Adaptation/Translation: Richard D. K. Turner

Barings Finalises Purchase of 4 Office Buildings from GreenOak

2 December 2018 – Eje Prime

Barings is on the verge of acquiring 100% of Avalon. The British fund manager is finalising the purchase from GreenOak of the four office buildings that it owns in the Madrilenian business park. If the operation goes ahead, the British company will become the owner of the nine properties that make up the complex.

Avalon Business Park is an enclosed business park, with a total surface area of 47,000 m2 and 1,000 parking spaces, located in the Julián Camarillo area of Madrid. Barings has been present in the complex since the end of the summer when it purchased five office buildings, with a combined surface area of 25,785 m2, from Meridia Capital for €73 million.

Now, the fund manager wants to advance with its growth plan in Spain by acquiring the four remaining properties, owned by GreenOak, which have a combined surface area of 21,170 m2. The US fund has owned the assets since 2015 when it purchased them from Banco Santander for €40 million. Almost four years later, the price of the properties amounts to around €60 million, according to reports from Expansión.

Barings arrived in the Spanish market three years ago and has already undertaken several investments in other real estate segments. In November 2017, the company purchased a logistics centre in Plaza (Zaragoza) from Deka, which it added to another logistics asset that it acquired in Madrid in April last year for €35 million.

The fund manager also has a portfolio of retail assets, which includes the Berceo shopping centre in Logroño (La Rioja). The British group acquired that complex, which has a gross leasable area (GLA) of more than 34,000 m2 at the beginning of 2018, after reaching an agreement with CBRE Global Investors, the former owner.

Original story: Eje Prime

Translation: Carmel Drake

Barcelona’s El Triangle Shopping Centre: 20 Years On

13 November 2018 – Eje Prime

El Triangle is growing up. One of the most iconic shopping centres in Barcelona, owned by the Immobilien Investment fund, which forms part of the Deka group, is celebrating its twentieth birthday in a context marked by the rise of e-commerce and the arrival of technology start-ups in search of offices on the most prime thoroughfares.

“Due to our location and facilities, many retailers choose to open their flagship stores in our shopping centre”, explains Joan Mas, manager of El Triangle, speaking to Eje Prime. In fact, in recent years, brands such as Urban Outfitters and Sephora have decided to back the Barcelona shopping centre with their flagship stores, a shop format that enhances the consumer experience.

In this sense, the director believes that e-commerce, far from representing a challenge, has become an opportunity for this shopping centre, which is located at number 1 Plaza Cataluña, in the heart of the Catalan capital. “Although shopping from home is more convenient for retail clients, the centre of the city is always going to be a busy area that attracts a lot of visitors”, adds Mas.

Currently, El Triangle has an occupancy rate of 100%, both in terms of its 14,000 m2 of gross leasable area (GLA) used for retail, as well as its 11,000 m2 dedicated to office space. According to explanations provided by the executive, the gradual increase in rental prices has not caused any problems when it comes to attracting tenants. “Demand has not ceased at any point, we are the ones who choose which brands and companies we want to carry out their activity in the building”, he said.

Proof of that is the arrival of two new operators to El Triangle between the end of 2018 and 2019. On the one hand, Lacoste is soon going to occupy 150 m2 in the shopping centre with the opening of one of its flagship stores. On the other hand, the restaurant chain Five Guys will arrive next year to lease the space that was operated by Masvisión until October.

Technology arrives at the offices in El Triangle

Although large brands are continuing to conquer the leisure and retail space in El Triangle, there has been a change in the trend in the space dedicated to offices in recent years. “Whilst at the beginning, most of the companies that entered as tenants were companies specialising in financial services and banks, recently, our building has been welcoming a significant number of technology firms”.

For example, Skyscanner and My Taxi are some of the companies that have their offices at number 1 Plaza Cataluña. Alongside them operate the coworking giant Regus and the company specialising in video games MSI. With an occupancy rate of 100%, multinationals from the FMCG sector also operate in the property, such as Bacardi, which recently leased a whole floor in the building, spanning 2,700 m2 in total (…).

With more than 150 million visitors from more than 120 countries, El Triangle opened its doors on 12 November 1998. Three years ago, its owner started to modernise the property, with an investment of €1.4 million. The most iconic boulevard of the Catalan capital currently houses 22 retail and restaurant premises, with brands such as Havaianas, Fnac, Sephora and Starbucks, amongst others.

Original story: Eje Prime (by B. Seijo)

Translation: Carmel Drake

Investors Unleash a Buying Frenzy on Madrid & Barcelona’s High Streets

28 August 2018 – Cinco Días

E-commerce is having an unexpected effect in that it is boosting the main high streets of Madrid and Barcelona. A number of operators are opening flagship stores to compete with online sales, whilst at the same time, there is a great deal of interest from investors wanting to acquire these types of properties since they represent assets with high returns.

During the first six months of the year, the main high streets of Madrid and Barcelona sparked a buying frenzy amongst real estate investors. They spent €700 million on the purchase of stores during H1 – that figure was 44% higher than they spent during the whole of 2017, according to the High Street report published by the consultancy firm Savills Aguirre Newman.

In an environment of low returns on other investment alternatives, given the context of low interest rates and enormous liquidity in the market, significant capital flows are being channelled towards property. Within the sector, the high street segment (stores on the most commercial streets) of Madrid and Barcelona are attracting investors.

The yield or return in the best commercial neighbourhoods of Madrid and Barcelona amounts to 3.25%, and in secondary areas, that figure rises to between 4.5% and 4.75% (the better the area, the higher the cost of operations and so the lower the returns). In large towns, the yield on prime stores reaches 4%.

Institutional investors (large real estate and pension funds) have been the most active players, accounting for 76% of all operations, according to Savills Aguirre Newman, with the remaining 24% involving insurance companies, private firms, family offices and Socimis (…).

“Institutional investors continue to focus on the best commercial thoroughfares of the large cities, where the purchase tickets typically exceed €20 million”, says the study. Meanwhile, private investors are more active in opportunities in the cities in which they reside, where they are local experts.

Madrid has accounted for a large number of the operations seen in recent months, with the acquisition by the fund Hines of Preciados 13 (..) and Redevco’s purchase of the Mercado de San Miguel. Meanwhile, AEW bought the Mercado de Fuencarral; Generali acquired Preciados 9; Thor Equities snapped up Gran Vía 30, and M&G Real Estate purchased 68 on the same street. Nevertheless, a lot of the investment this year has been due to one transaction involving a portfolio of Inditex stores, which were acquired by the German fund Deka for €400 million.

For investors, another attractive feature of the Spanish market is the improvement in the rents that tenants are paying, which have clearly risen in recent years since the crisis. Prices on Calle Preciados, for example, have risen from €270/sqm/month two years ago to €277/sqm/month in 2018. Gran Vía has also seen a €10/sqm/month increase to €240/sqm/month, according to data from the consultancy firm.

In Barcelona, prices on the most expensive street in Spain, Portal de L’Angel, have grown by 5.5% during the same period to €285/sqm/month. Nevertheless, prices on Paseo de Gracia are rising the fastest, by 15%, to reach €260/sqm/month (…).

One of the major changes that is being seen is the concentration and opening of large flagship stores in the centre of the two cities through which the operators are seeking to counter the strength of online shopping, by offering what they call a shopping experience (…).

In this vein, as Cinco Días revealed last week, the Chinese technology firm Huawei is going to open a flagship store on Gran Vía 48 in Madrid, in the former C&A store. On the other hand, the Sfera brand, owned by El Corte Inglés, is leaving Gran Vía 30, given that it has recently reorganised its business in the centre of the city to focus on its larger and recently renovated megastore on Calle Preciados.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

CBRE: Investment in High Street Premises Will Exceed €1.1bn in 2018

5 July 2018 – Eje Prime

Commercial premises, especially those located on the most prime streets of Spain, are proving highly sought-after. According to CBRE, the high street investment market is going to achieve record figures in 2018, up to a total of €1.1 billion. The culprits? The German fund Deka and Inditex, in addition to the strength of secondary cities in the country.

During the course of the last two years, investment in high street assets remained stable at around €800 million per year, after peaking at €1.01 billion in 2015. In 2018, according to calculations from the real estate consultancy CBRE, the investment volume will exceed the €1 billion threshold again, primarily due to the impact of the sale to Deka of a batch of 16 Zara stores for €400 million and the boost from activity beyond Madrid and Barcelona.

Deka has whereby become a catalyst for the retail investment market in Spain, together with Generali and Union Investment, which also starred in major investment operations during the first few months of 2018.

Deka’s €400 million operation was the largest in the last year and a half, followed by the purchase by Hines of number 17 Paseo de Gracia for €113 million and the acquisition by Generali of number 9 Preciados for €107 million.

Institutional investors are the main drivers of the investment market in this segment, according to the Retail keys in Spain report in CBRE. “In recent years, several overseas institutional investors have entered the Spanish market and many have been active in 2017 and 2018”, according to the document, which points out that Socimis such as Tander, Ores and Silicius have also been interested in the sector.

Madrid and Barcelona are continuing to be the main magnets for high street investment in Spain and, together, they account for 79% of the total expenditure. “Nevertheless, other cities in Spain are booming and demand is rising for investment products in cities such as Bilbao, Valencia, Sevilla and Málaga”, says the document.

The displacement of demand to other cities is a consequence of product shortages and low returns. On the one hand, according to CBRE, operators have accentuated their preferences for prime streets, which has strengthened the shortage of products. “Premises with recently signed contracts are sparking a lot of interest, given that if they reflect market rents, they become a very stable long-term investment”, says the document.

On the other hand, the pressure on returns remains strong and in 2017, they were compressed further still, reaching levels of 3.25% in Madrid and 3.50% in Barcelona for the most prime products. The “historically low” values are repeated in other European cities, with 3.25% in Berlin, 3% in Milan, 2.75% in Paris and 2.25% in Munich.

As a result of those two elements, investor interest is extending to other cities in Spain, although the operations closed tend to be of greater importance, “given that the premises and the rents are lower and the returns are higher”.

With investment of €170 million outside of Barcelona and Madrid in 2017, several purchases stand out such as M&G’s acquisition of the H&M store on Reyes Católicos in Granada as well as of the El Corte Inglés building in Plaza la Magdalena in Sevilla.

Valencia and Bilbao are the markets that, typically, generate the most interest from investors due to the size of the two cities, the importance of their high streets and the role of tourism. The tradition of investment in the segment by local family offices means that returns there are compressed to 4%.

Retail and shopping centres

High street premises accounted for 25% of the total investment in retail in 2017, well behind shopping centres, which accounted for 51% of the total, but ahead of retail parks (15%) and portfolios of supermarkets and hypermarkets (9%) (…).

In Spain in 2017, investment in the Spanish retail market amounted to €3.3 billion. CBRE forecasts that the figure will amount to €2.9 billion in 2018, boosted by high street investment (…).

Original story: Eje Prime (by P. Riaño)

Translation: Carmel Drake

CBRE: Investor Interest in High Street Stores Skyrockets

5 July 2018 – Cinco Días

Stores on the most commercial streets of Spain have become an object of desire for investors in the real estate market. Large funds and insurance companies alike are investing in these types of assets and experts predict that a new record is going to be set in the segment this year.

Investors are expected to spend around €1.1 billion on these types of commercial premises in 2018, according to forecasts from the consultancy CBRE. That figure would exceed the amount invested in high street stores in 2017 by €300 million, equivalent to a growth rate of 36.9%. Of interest are shops on commercial thoroughfares such as c/Preciados and c/Serrano in Madrid and Paseo de Gracia and Portal de l’Àngel in Barcelona. In fact, those two cities accounted for 79% of total investment last year. “Nevertheless, other cities in Spain are on the rise and there is growing demand for investment products in cities such as Bilbao, Valencia, Sevilla and Málaga”, according to the report “The Keys to Retail in Spain”, published by CBRE yesterday.

Investors regard these types of well-located assets as a good option for placing their money, a solid alternative in the context of low-interest rates and because these high street stores perform better (than other commercial assets) in the face of competition from online retailers. Currently, according to CBRE; the returns on these properties amount to 3.5% in Barcelona and to 3.25% in Madrid; in other cities (with more risk), the returns are greater.

The stars of these acquisitions are mainly the large funds. Hines, M&G, AEW, Thor, Union Investment, CBRE GI and Deka. “In 2017, in addition, an insurance company entered the high street sector for the first time: Generali acquired the Pull & Bear store on Calle Preciados in Madrid”, according to the report. Other active players include the Socimis, such as Tander, Ores, and Silicius, which have started to express interest.

In terms of large operations so far this year, in January, the German fund Deka acquired 16 Inditex stores for €400 million. Another significant operation was the acquisition of Mercado de San Miguel by the Dutch fund Redevco, for €70 million.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

ECE and J&T Bid in RE Operation of the Year

12 June 2018 – Expansión

One of the real estate mega-operations of the year is entering the home stretch. The German manager specialising in retail ECE and the Slovakian real estate leader J&T Real Estate are positioning themselves as favourites to acquire the Valle Real (Santander), Max Center (Bilbao) and Gran Casa (Zaragoza) shopping centres, currently owned by Iberian Assets, a joint venture in which the fund managers CBRE Global Investors (CBRE GI) and the multi-national Sonae Sierra both hold 50% stakes.

In the case of the Slovakian firm, the operation would be carried out through an alliance with Sonae Sierra and would represent J&T Real Estate’s debut in Spain.

Market sources explain that, in both cases, the bids for these assets exceed €450 million and reveal that the transaction could be closed within the next few weeks.

The portfolio, baptised as Project Summit, includes almost 117,000 m2 of gross leasable space in total (owned by Iberian Assets) and together, the three centres received 24 million visitors last year. CBRE GI and Sonae Sierra engaged the real estate consultancy firms CBRE and JLL at the beginning of the year to sell the three shopping centres.

The assets

Valle Real, opened in November 1994, has a gross leasable area of 47,725 m2, spread over two floors and is fully occupied (100%).

The shopping centre, located in Santander, closed last year with 5.9 million visitors. Valle Real includes a Carrefour hypermarket, which occupies almost 16,000 m2. Its other main tenants include Primark, Inditex, H&M and Forum Sport.

Meanwhile, Max Center is located in Bilbao and it opened its doors for the first time in 1997. The asset was remodelled in 2000 and its tenants include Inditex, H&M, Cortefiel, La Tagliatella, Foster’s Hollywood and Cinesa.

The shopping centre also has an adjoining leisure space, Max Ocio, which opened in 2002.

In total, the centre has a surface area of almost 40,000 m2 and it also received 5.9 million visitors last year.

Gran Casa, inaugurated in 1997, has a gross leasable area spanning 80,000 m2, almost half of which is occupied by Hipercor, and with an overall occupancy rate of 93%. Last year, the shopping centre, located in Zaragoza, received 12.2 million visitors.

If the transaction goes ahead, it will be the largest (non-corporate) operation in the real estate sector so far this year by transaction volume.

Moreover, the sale of the Summit portfolio would clear the way for the sale of another major commercial portfolio by Unibail Rodamco.

The shopping centre giant has hung the “for sale” sign up over four of its shopping centres in Spain – Los Arcos (Sevilla), Bahía Sur (Cádiz), Vallsur (Valladolid) and El Faro (Badajoz) – an operation that may exceed the volume of Project Summit.

Investment

According to data from the Spanish Association of Shopping Centres and Retail Parks (AECC), last year 29 transactions, involving 36 assets, were closed for a total sum of €2.7 billion, which represented growth of 35% YoY.

So far this year, several significant operations have been closed such as the sale of a portfolio of 14 premises by Inditex to the German fund Deka for €370 million (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Deka Finalises Sale of Part of Inditex’s Portfolio to IBA Capital for €100M

25 May 2018 – Eje Prime

Deka may have found a buyer for a portion of the portfolio that it purchased from the Galician giant Inditex. The German fund manager is currently holding negotiations with the Spanish fund IBA Capital regarding the sale of most of the premises that it bought from the fashion retailer at the beginning of the year for around €100 million, according to sources close to the operation, speaking to Eje Prime.

IBA Capital, which has declined to comment, looks set to buy more than ten assets located in secondary cities, given that Deka is planning to hold onto number 16 Calle Preciados, in Madrid (2,725 m2 of retail space) and number 58 Calle Pelayo, in Barcelona (5,134 m2 of retail space), as well as the properties it acquired in Portugal.

Thus, IBA Capital would purchase assets located in secondary cities (such as those located in  Zamora, Albacete and Ciudad Real) through the fund that it has just launched onto the market specialising in the high street segment. Deka acquired the 16 assets in January for approximately €400 million, with chains from the Inditex group continuing as tenants in all of the establishments.

These two moves, the purchase and the sale, demonstrate Deka’s interest in the Spanish market. According to Eje Prime, Deka’s roadmap involves doubling the investment volume that it has in the country from €1 billion to €2 billion over the next five years.

Currently, the fund manager owns a portfolio of tertiary assets in Spain, highlights of which include the office buildings at Avenida Diagonal 640 and Sarrià Forum in Barcelona and the mixed-use (offices and retail) El Triangle building, also in the Catalan capital (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Deka Puts the Ballonti Shopping Centre Up For Sale for €150M

26 April 2018 – Eje Prime

Deka is continuing with its plan to generate cash from its real estate assets in Spain and to this end, has placed the Ballonti shopping centre on the market. After paying €116 million to Eroski for the Basque shopping centre located in Portugalete (Bizkaia) eight years ago, the German fund is now asking for €150 million from the sale of the complex, which spans a surface area of 51,000 m2.

Following the steps announced by the Director of Retail Property Fund Management at Deka Management, Esteban de Lope, speaking to Eje Prime, recently, who said that “it is now more feasible for Deka to sell than buy”, the fund has placed the “For Sale” sign up over a new asset in its Spanish portfolio, which is worth €1 billion in total.

A few days ago, the German manager placed back on the market the majority the Inditex properties that it acquired at the beginning of this year for €400 million, as reported by Eje Prime. Around the world, Deka’s portfolio of assets is worth more than €35 billion.

Original story: Eje Prime 

Translation: Carmel Drake

Deka Puts Most of its Recently Acquired Inditex Stores Up for Sale

23 April 2018 – Eje Prime

After closing one of the most important real estate operations of the year, Deka is looking to capitalise on its investment with a new knock-on effect. The German fund manager has just put back on the market the majority of the stores that it purchased at the beginning of the year from the Galician giant Inditex, in an operation worth around €400 million, according to sources close to the sales process, speaking to Eje Prime.

According to the same sources, Deka has divided the portfolio into three. The first part comprises two properties, which the fund is going to hold onto, those at number 16 Calle Preciados, in Madrid (with 2,725 m2 of retail space) and number 58 Calle Pelayo, in Barcelona (with 5,134 m2 of retail space).

The second and third parts of the portfolio are already up for sale. The aim of Deka is to divest the assets located in secondary cities (such as those located in Zamora, Albacete and Ciudad Real) by placing them on the market and also to listen to offers for the assets located in cities such as Valencia and Madrid, which, although they are not strategic for the fund, it is not in a rush to sell.

Deka, which will also hold onto one of the two properties that it purchased in Lisbon (located on Calle Augusta), acquired the 16 assets in January for approximately €400 million, and chains belonging to the Inditex group continue as the tenants of those establishments.

These two moves, both the purchase and the sale, demonstrate Deka’s interest in the Spanish market. As Eje Prime revealed, Deka’s route map involves doubling its investment volume in the country from €1 billion to €2 billion over the next five years.

Currently, the fund manager owns a portfolio of tertiary assets in Spain including the office buildings on Avenida Diagonal 640 and Sarrià Forum in Barcelona and the mixed-used (office and retail) property El Triangle, also in the Catalan capital. Moreover, the group owns the Ballonti shopping centre in Bizkaia, which it recently put on the market for around €150 million, and the Espacio Mediterráneo shopping centre in Cartagena, as well as the Hotel Meridien de Las Ramblas in Barcelona and another vacation hotel in Mallorca.

The company’s presence in the Spanish real estate sector dates back to the 1990s when it had a portfolio of assets with a very similar volume to its current size. At that time, Deka owned large spaces such as the Diagonal Mar shopping centre in Barcelona and the Castellana 35 and Castellana 79 buildings in Madrid. But, in around 2006, according to Esteban de Lope, Director of the Retail Property Fund Management Department at Deka, “an opportunity arose and we sold almost all of our portfolio at a significant profit”.

After hiding in the shadows for five years, competing in other European markets such as the French, British, Belgian and Dutch, as well as its own German real estate market, Deka returned to Spain in 2010 with the acquisition of the Avenida Diagonal 640 building.

The sale of the batch of assets acquired from Inditex coincides with the group’s desire to divest some of its businesses in Spain. Lope said that “given the nature of the market, it is easier for Deka to divest than to purchase”. “The Inditex portfolio was an exception” – says the director – “they wanted to sell quickly, but they needed to be certain that the buyer had money to invest; thus an opportunity arose, with the condition of us having to move very fast”.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake