Sonae Sierra & CBRE GI Put the ‘Max Center de Barakaldo’ Shopping Complex Up For Sale

10 February 2018 – El Correo

Bizkaia is preparing for a major commercial and real estate revolution. Sonae Sierra, the multinational owner of the Max Center shopping complex in Barakaldo has put the property up for sale, 15 years after acquiring it from ING Real Estate. The property was opened in 1994 and was extended in 2002 with the addition of the adjoining Max Ocio building. The latest transaction forms part of a national macro-operation, given that the portfolio up for sale also includes two other large complexes: the Gran Casa de Zaragoza and the Valle Real de Santander.

The company, together with its partner CBRE Global Investors, with whom it jointly shares the ownership of the three large shopping centres, calculates that it will receive proceeds of around €500 million from the sale, according to sources in the sector. Spokespeople for Sonae avoided providing further details about the operation to this newspaper on Thursday. They announced that they only discuss “closed” operations and that the installations in Kareaga, which have an approximate surface area of 60,000 m2 “are still operating in a normal way”.

Nevertheless, the negotiations have been underway for several months. Although they are satisfied with the progress of the business, which is enjoying growing sales and which seems to have left behind the worst years of the crisis, the current owners are looking to generate revenues from the sale of these assets to invest in other projects in different parts of Spain. Sonae Sierra, which is controlled by Hugh Grosvenor, the Duke of Westminster and the richest man in the United Kingdom, has a presence in seven countries with 46 buildings worth almost €7 billion. It is currently working alongside the British operator McArthurGlen on the imminent opening of a luxury outlet in the Plaza Mayor de Málaga complex, which will involve a disbursement of €140 million.

The company is looking to take advantage of the current times in the Spanish real estate market, which are being characterised by a great deal of interest from funds and overseas companies. Last year, investment in the retail sector rose in a spectacular fashion – by 31% – to reach €3.9 billion. If this latest sale goes ahead, the owners of the Max Center, which is home to 133 stores, as well as a sizeable restaurant and leisure area, would complete their second divestment process in Bizkaia in two years.

At the beginning of 2016, they sold the Zubiarte de Bilbao complex to Activum SG Iberia Fund for €150 million (…).

Modernisation of its roof

Now, all eyes are focused on the Max Center, which has just invested €3.5 million on the modernisation of its roof. Nevertheless, the improvements are not going to stop there, given that the complex is soon going to be subjected to a complete renovation. The changes undertaken in recent months to renew the roof of the building, which houses a parking lot, included the resurfacing of the surface area and its signage, as well as improvements to the lighting and security in the parking area.

In addition to the successive renovation projects, the Max Center has also improved its sustainable profile with several actions aimed at reducing water consumption, improving energy efficiency and increasing recycling rates. Together with these interventions, management has been working on an intense campaign to increase the commercial offering and renew the trust of its customers who are being offered increasingly more choice by nearby competitors, such as Megapark and Ballonti (Portugalete). Some of the new brands that have chosen the Max Center and are about to open stores there include Pablosky, Indie&Soul, San Carlos, Trendie, Loop&Coffe and Burger King. Meanwhile, other stores, which are already established, such as the footwear shop Foot Locker, have undergone major renovations.

Original story: El Correo (by Luis Gómez)

Translation: Carmel Drake

Arcano To Raise €125M For Its Second RE Fund

19 May 2017 – El Economista

Arcano is preparing to launch its second real estate fund following the success of its first vehicle, through which it managed to raise €80 million to acquire assets in Spain.

In this case, the objectives of the firm are more ambitious – it hopes to raise between €100 million and €125 million, according to Eduardo Fernández-Cuesta, Partner at the management company.

“Arcano’s platform was essential when it came to obtaining capital for the first fund”, explained the Director, who said that the process was complicated, given that it was the first time that it had operated in that field, but that it was supported by the firm and its own experience with other kinds of assets, such as private equity and European corporate debt (where it already manages assets worth more than €3,000 million).

Since Arcano Spanish Opportunity Real Estate Fund launched its operations “€60 million has been invested or committed to date, and by the end of the year, we expect to have disbursed the remaining €20 million (from the first fund)”, said Fernández-Cuesta.

Just like in the case of the first fund, the new vehicle will focus on value-added operations, “given that it is a niche in the market that we think we can do it better, focusing on operations of between €10 million and €15 million”.

The firm, which seeks “a net return of 15 percent” operates mainly through off-market transactions with private owners, as well as with financial institutions.

“We will likely begin raising capital (for the second fund) from September onwards, but it will depend on how the investments that we have left to close in the first fund are going at that point”, said the Director.

With the first fund, Arcano invests in value-added operations in all types of properties, with a clear focus on residential assets in Spain’s main cities and along the Costa del Sol, without forgetting other assets including office buildings, logistics assets, retail premises and shopping centres, provided they are opportunities that generate value within the fund’s investment philosophy.

“In this way, Arcano covers a gap in the real estate sector in Spain by concentrating on value-added and medium-sized operations (between €5 million and €25 million in equity) with a clear local focus”, explained the firm.

Original story: El Economista

Translation: Carmel Drake

Merlin Issues Debt Amounting To €600M, Redeemable In 2025

18 May 2017 – Expansión

Debt issues in Spain, which have been the focus of the financial sector in recent times, have now reached Merlin Properties. The Socimi has placed debt amounting to €600 million, with a term of eight years (maturing in May 2025) at a price of 99.417% of the nominal value and with an annual coupon of 1.75% (125 basis points above midswap). The subscription and disbursement of the issue will take place on 26 May 2017.

Merlin has received requests amounting to €1,200 million for the issue, i.e. double the amount that will be awarded. This level of demand has allowed it to lower the cost of the operation.

Initially, the Socimi proposed a price of 135 basis points above the reference index for fixed income or midswap issues. But, the strength of demand reduced that premium to 125 points.

To carry out the operation, Merlin has engaged the services of Crédit Agricole, Nabca IMI, Goldman Sachs, ING and JPMorgan.

At the Socimi’s General Shareholders’ Meeting three weeks ago, the CEO, Ismael Clemente (pictured above), confirmed plans to resort to the debt markets, although at the time he was unsure as to whether it would do so through convertible debt or senior debt issues, or by refinancing the bank debt.

The last few weeks have reinforced the truce in the debt market in Europe, after Emmanuel Macron secured victory over Marine Le Pen in the French elections.

Original story: Expansión

Translation: Carmel Drake

JLL: RE Inv’t Amounted To €8,757M In 2016

13 January 2017 – Expansión

Between January and December, investors spent €8,757 million buying tertiary assets, according to data from the real estate consultancy JLL. This figure is the second highest in the last decade, and is €650 million below the volume of sales and purchases recorded in 2015. That was the year when the invasion of international funds into Spain and the consolidation of the Socimis took the real estate market to figures never seen before, with a volume of investment upwards of €9,400 million.

But, unlike the previous year, 2016 saw the rise of commercial assets (primarily, shopping centres and high street premises) to lead the ranking in terms of real estate investment by segment, accounting for almost €3,000 million (€2,977 million, according to JLL) compared to €2,806 million spent on offices.

Two operations, the purchase of Torre Foster by Amancio Ortega, for €490 million and Merlin’s acquisition of Parque Adequa for €380 million, boosted the investment figure in the office segment, which, although hasn’t completely lost its appeal for buyers, has been relegated to second place due to a shortage of available prime space. (…).

Funds are selling off assets

The opposite is happening in the case of large commercial establishments. International funds’ interest in selling the properties that they bought during the crisis led to a boom in major operations last year, including the sale of the Diagonal Mar shopping centre by Northwood, which was acquired by one of Deutsche Bank’s real estate funds for €493 million; and the sale of Gran Vía de Vigo, for which the Socimi Lar España paid the fund Oaktree €145 million. (…).

In the case of hotels, despite significant one-off sales, such as the operation involving Hotel Villamagna, which was acquired by the Turkish group Dogus for €180 million, overall the investment volume fell from €2,739 million in 2015 to €2,155 million last year. Even so, the figure for 2016 exceeds the investment volume recorded in 2006, which previously held the record, when hotel sales amounted to €1,600 million (out of a total non-residential investment volume of €8,482 million).

Although commercial properties led the ranking as the preferred asset for investors, logistics assets also performed very well. Between January and December, €819 million was invested in logistics warehouses, platforms and centres, according to JLL. This figure practically doubles the purchases completed in 2015, when investors disbursed €434 million on these types of properties, according to the consultancy.

The key behind this success is due to the fact that logistics assets still offer high returns, compared with other properties, such as offices and shopping centres, which have lost some of their investment appeal, due to the high degree of interest in these assets in Spain.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Sogepsa Has Sold 3 Ha Of Industrial Land For €1.8M In 2016

13 December 2016 –

This year, the Company for the Management and Promotion of Land in Asturias (‘La Sociedad de la Gestión y Promoción del Suelo de Asturias’ or Sogepsa) has sold almost three hectares of industrial land, spread over 22 plots of land, for which it has recorded revenues of €1.8 million. However, it has not sold any residential land.

This data has been provided by Belén Fernández, the Minister for Infrastructure and the President of Sogepsa, in her appearance at the budgetary meeting of the General Meeting of the Principality.

Fernández also said that the Principality currently has €92.8 million of avals with this company and that since 2013, it has disbursed loans amounting to almost €43 million.

Nevertheless, in response to questions from the Partido Popular MP José Agustín Cuervas-Mons, she said that the level of sales is a debate that has nothing to do with the future of this company.

In fact, she confirmed that, whatever happens with Sogepsa, the industrial and residential land that it has generated exists and has value, although it will be harder to sell it now than during the boom years.

The Minister also appeared convinced that the Bobes industrial estate in Siero, where construction has been suspended and whose debt caused Sogepsa to file for creditor “pre-bankruptcy” (preconcurso), may be sold, although she acknowledged that the site is not very attractive because it has not been finished yet and completion of the works will require an investment of several millions of euros.

Original story:

Translation: Carmel Drake