Tag: e-commerce

Amazon Opens New Logistics Centre In Madrid

26 July 2017 – Expansión

Amazon has announced the inauguration of a new logistics depot in Getafe (Madrid), which will see the creation of around 80 direct jobs next year. This centre will allow Amazon “to operate in Spain with greater capacity and flexibility and whereby offer faster deliveries to its clients and a better service to businesses who sell their products on Amazon and use its logistics network”, according to the dot.com.

Moreover, Amazon has introduced new software for the distribution companies that work with it so that they can optimise their delivery times through route recommendations and, for example, by factoring in speed limits and daily traffic patterns.

The company led by Jeff Bezos may be planning to open a logistics macro-centre in Toledo and two more facilities in Madrid, which would create a network of 25 warehouses spread all over the country. For the time being, Amazon’s logistics network in Spain includes the San Fernando de Henares centre (Madrid) and a centre in Castellbisbal (Barcelona) dedicated to Amazon Pantry, as well as two urban centres in Madrid and Barcelona to serve its Prime Now users.

Original story: Expansión (by M. Juste)

Translation: Carmel Drake

CBRE: Logistics Inv’t Rose By 29% To €664M In H1 2017

20 July 2017 – Eje Prime

Investment in the Spanish logistics market soared once more during the first half of the year. Transactions involving logistics assets amounted to €664 million during the first six months of 2017, representing an increase of 29% with respect to the same period last year, when investment stood at €514 million, according to a study prepared by the real estate consultancy firm CBRE.

In the second quarter alone, industrial and logistics investment reached €364 million, a figure that far surpassed the amount recorded in the second quarter of 2016 (€300 million).

According to the consultancy firm, the difference compared to previous years is that the “appeal” of this sector is not concentrated only in Madrid and Barcelona, but rather it extends to other cities, such as Zaragoza, Valencia, Bilbao, Málaga and Sevilla.

Similarly, interest in investment in high-risk projects has been consolidated, due to the growth in the volume of logistics space leased in every city caused by e-commerce. In fact, investors who have never shown any interest in logistics have started to consider the sector as a necessary component of their portfolios, according to CBRE.

Some of the main logistics transactions closed so far this year include GIC’s acquisition of the Acero portfolio, worth €243 million; CIC’s purchase of Logicor’s assets; and Axiare’s acquisition of the second phase of a project located in San Fernando de Henares (Madrid), worth €38 million.

Original story: Eje Prime

Translation: Carmel Drake

Record Breaking Logistics Leasing In Madrid In H1 2017

19 July 2017 – CBRE

400,000 m2 of logistics space was leased in Madrid during the first half of 2017, which represents an 117% increase in demand with respect to the same period a year earlier, according to data from CBRE, the largest real estate consultancy and services company in the world.

In fact, the total registered figure so far this year almost equals the amount for the whole of last year, when 404,000 m2 of logistics space was leased. Specifically, 269,000 m2 of logistics space was leased between April and June whereby doubling the figure recorded in the previous quarter (130,000 m2).

According to Alberto Larrazábal, National Director of Industrial and Logistics at CBRE, “this increase in leasing volumes is due, primarily, to the increase in the number of transactions involving large surface areas, which has been strengthened by a phenomenon that has increasingly more influence in society and which is revolutionising this sector in particularly: namely, e-commerce”.

Some of the most noteworthy operations closed during the first six months include DSV in Cabanillas del Campo, covering a total of 49,800 m2, the XPO in the same town, covering 47,934 m² and the deal closed in Getafe, covering a total surface area of 58,215 m2. The last few months have also seen Transaher close an operation in San Fernando de Henares, measuring 42,000 m², and Miquel Alimentació lease space in Torrejón de Ardoz, covering 20,372 m².

In this sense, the A-2 and A-4 motorways are where most of the space was leased during the first half of 2017 in the area surrounding the capital. Specifically, the A-2 accounted for 62% of the space leased (249,000 m2), followed by the A-4 (118,000 m2).

In terms of prime rent in the local distribution area, it remained stable at €5.25/m2/month.

In Barcelona, meanwhile, 112,000 m2 of logistics spaces was leased during the second quarter of 2017, 10% less than during the previous quarter (125,000 m2). In terms of the cumulative figure for the half year, it exceeded 237,000 m2, which was 40% lower than the volume recorded during the same period last year.

Nevertheless, it is worth mentioning that a turnkey operation was closed by Amazon in El Prat de Llobregat in Q2 2016. Thus, if we exclude that operation from the comparison, 23% more logistics space was leased in H1 2017, which indicates a positive trend.

The most noteworthy operations closed in Barcelona during the first half of 2017 included the rental of a 34,000 m2 warehouse in Martorelles to Segro, the leasing of 17,000 m2 of space on the Anoia Industrial Estate to GV El Zamorano, and the pre-lease operation by the company VIBIA to Clape Group, involving a surface area of 14,000 m2 in Gavà. In addition, MediaPost signed a turnkey operation with Solvia to construct a 12,000 m2 warehouse in Polinyà (…).

Finally, the prime rent remained stable at €6.50/m2/month in Barcelona, although it is expected to increase over the next few months, due to the clear absence of available space.

Original story: CBRE

Translation: Carmel Drake

Blackstone Sells Logicor To Chinese Sovereign Fund For €12.5Bn

5 June 2017 – Real Estate Press

Logicor’s Spanish logistics portfolio, which covers more than 1 million m2, has been included in the second largest real estate operation ever to be closed in Europe. The deal has involved the sale of Logicor by Blackstone to the sovereign fund China Investment Corporation CIC, for €12,500 million, according to a statement issued by the US group on Friday.

Logicor, a company created by Blackstone in 2012, owns a portfolio comprising more than 600 high-quality European logistics assets, which have a combined surface area of 13 million m2, located in 17 countries, although more than 70% of the properties are concentrated in the United Kingdom, Germany, France and Southern Europe. All of the assets are located in major European economies, along the main transport corridors and very close to major population centres. The portfolio is in an ideal position to benefit from the structural changes in demand that is currently being driven by the rapid growth in on-line trade.

In Spain, the company owns a portfolio covering more than 1.2 million m2, located primarily in Madrid and Barcelona, after having acquired assets from Axa, CBRE GI, SEP Investment, Gran Europa and General Electric, amongst others. Half of the Spanish portfolio is located in the Corredor de Henares. Logicor’s most recent acquisitions in Spain have included two warehouses spanning 70,000 m2 in Torrejón de Ardoz from IDI Gazeley, a purchase that formed part of a larger European operation covering 200,000 m2; and a 82,000 m2 space, which itacquired from Godman, also as part of a larger European operation.

With the sale of Logicor, Blackstone has repeated the move it made with IndCor in the United States in December 2014. On that occasion, the buyer was the Singapore sovereign fund, GIC, which paid $8,500 million for IndCor’s logistics assets, which covered a total logistics surface area of 12 million m2. And it was Blackstone that was the first to predict the effect that logistics spaces would have with the arrival of e-commerce, in addition to its great capacity to raise capital.

Antony Meyers, Director of Real Estate at Blackstone in Europe said: “We have constructed Logicor, through more than 50 acquisitions, to be a leading pan-European logistics company”. “Now, it will have an excellent new owner, with a long-term vision and we have no doubt that it will maintain its strength in a sector that has a very positive outlook”.

CIC fought off competition in the bid for Logicor from Mapletree Investment and Temasek, a joint venture formed by two Singapore state funds, according to a person familiar with the bid process, as well as Global Logistics Properties, a company controlled by the Singapore sovereign fund, GIC.

Logistics spaces are going to have enormous value for e-commerce companies, such as Amazon. Logicor has focused on the growth of its business in Western Europe, where on-line shopping is less developed than in the United Kingdom. The agreement is expected to be closed before the end of the year.

Original story: Real Estate Press

Translation: Carmel Drake

Gesvalt: Madrid’s Logistics Sector Grows For First Time Since 2009

13 February 2017 – Observatorio Inmobiliario

The leasing of industrial warehouses in the Community of Madrid increased in 2016 for the first time in eight years following a recession in the logistics sector. The evolution of the market in the region last year confirms the positive forecasts that experts predicted at the end of 2015. Nevertheless, it is worth noting that this increase in the volume of space leased in the logistics sector was mild and gradual over the whole period, according to the conclusions of the latest report from Gesvalt, a consultancy and asset valuation company.

Sandra Daza, Director General at Gesvalt, considers that “these are noteworthy figures because they are evidence of the reactivation of the sector, which will also undergo more changes over the next few years, due to the reactivation of consumption and the evolution of e-commerce”. In this sense, Daza forecasts that “we are going to see an increase in the supply of these types of industrial warehouses, especially in Madrid and Barcelona”.

In the province of Madrid, which has 43 industrial estate areas, the distribution of industrial space is divided as follows: 32% production, 22% storage, 12% logistics, 7% commercial and 27% business parks.

The extractive and manufacturing sectors are giving way to the drive from the storage and distribution sectors. Large firms dedicated to this activity are moving into the region and are demanding large surface areas, close to large populations and with access to fast roads. Nowadays, these types of assets are the star product in the logistics and industrial sector in Madrid. By contrast, investors have lost interest in smaller warehouses on old industrial estates and the few operations that are taking place are being closed at almost cost prices.

In 2017, the aforementioned change is expected to be consolidated, with slight increases in rents. Returns could reach 7% and a minimal increase is expected in the volume of operations.

Almost 50% of the investors that are operating in the industrial market in the region are domestic and international institutions, whilst the other half comprise Socimis and family offices. By contrast, large financial institutions are the main vendors of these types of products.

80% of the operations in the Community of Madrid in 2016 were located in the Corredor del Henares, although the volume of surface area leased was still low (150,000 m2).

The interest in the market for rental over sale, the scarcity of land in really attractive areas and the relative low rates of return (6%) confirm that although the recovery of the sector is underway, it still has a long way to go.

Within the Community of Madrid, the municipality with the greatest volume of industrial activity is Fuenlabrada, which accounts for 25% of the total and is home to 21 industrial estate areas.

The large Mercamadrid industrial estate, located in the industrial area of Villa de Vallecas, is the largest in the Community of Madrid (1,8000,000/2,000,0000 m²), followed by the Vicálvaro industrial estate, which is as big as the Cobo Calleja de Fuenlabrada estate (1,750,000/1,800,000 m²). (…).

Original story: Observatorio Inmobiliario

Translation: Carmel Drake

Amazon Revolutionises The Logistics Sector

9 February 2017 – Expansión

The boom in e-commerce and the arrival of the large distribution giants, like Amazon, have caused a genuine tsunami in the real estate market and in the way we understand logistics. Logistics assets – which were, until recently, the ugly duckling of the sector – have really blossomed and now represent one of the investment segments with most potential, given their risk-return relationship, according to the experts.

Operators are increasingly looking for more large logistics warehouses on the outskirts of cities, which they combine with distribution centres situated on ring-roads to make deliveries on time and on budget.

“The effect is a reflection of new consumer habits and online purchases, as well as of consumer expectations, which require products to arrive on time and to be easily returnable (inverse logistics)”, explains Antonio Montero, Director of the Industrial-Logistics business at Aguirre Newman.

Alberto Larrazábal, National Director of Industrial and Logistics at CBRE, said that there has been an increase in the e-commerce market. “Operators are increasingly demanding more logistics and distribution space. In Madrid and Barcelona, 400,000 m2 and 700,000 m2 of space was leased, respectively, in 2016 and e-commerce accounted for 25% of those amounts.

Javier García-Mateos, Partner in Financial Advisory at Deloitte said that “retailers are starting to use their own establishments in cities as logistics and distribution points for e-commerce”.

García-Mateos also said that there is greater demand for the development of cross-docking warehouses (which reduce the time needed for logistics operations and which can be adapted to the needs of e-commerce) in the vicinity of the main urban nuclei. (…).

“Logistics spaces are moving increasingly closer to cities, there are even warehouses inside city centres. These are points where companies can serve their customers in the fastest and most effective way”, said Luis Guardia, Director of the Logistics and Industrial Area at JLL.

Guardia also explained that the major department stores are also committed to opening “regional hubs” to get closer to the major urban nuclei.

Development activity

In terms of investment, Larrazábal considers that the logistics and industrial sectors are becoming more fashionable by the day. “Large funds and private investors will end up acquiring these assets”, he said.

Over the last three years, investment volumes have grown considerably, to reach more than €800 million last year.

One example of this investor appetite is Merlin’s purchase of Saba Parques Logísticos – the company that groups together Saba’s stakes in five parks – for €115 million.

“The logistics market is interesting as it allows the Socimis to diversify and add new assets to their portfolio that generate returns not afforded by the other assets at the moment”, said García-Mateos. Other operators that are committed to this market include Logicor (Blackstone), Zaphir, Prologis, Rockspring, GreenOak and the joint venture between Colony and Neinver.

In the same way, experts indicate that development activity has resumed. “Developers and investors know that there is latent demand in high quality logistics assets and this is encouraging them to buy land and build assets”, said Montero

Original story: Expansión (by Rebeca Arroyo)

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

C&W: RE Inv’t In Retail Sector Exceeded €4,300M In 2016

2 February 2017 – Finanzas

Real estate investment in the retail sector – commercial assets – in Spain exceeded €4,300 million in 2016, up by 22% compared to the previous year, thanks to the completion of 45 operations, according to the Marketbeat Retail España report, compiled by the real estate consultancy firm Cushman & Wakefield.

The study indicates that much of this investment came from overseas investors, particularly in the case of shopping centres.

Nevertheless, overall, domestic capital increased to account for 67% of financing in 2016, compared to 8% in 2007, due to the rise of the Socimis.

The CEO of Cushman & Wakefield in Spain, Oriol Barrachina, said that retail is one of the “clearest” indications that the market has become globalised.

Moreover, Barrachina commented on the need to increase “transformation” and “diversification” to generate wealth “in other neighbourhoods”.

In relation to retail complexes, the report indicated that they covered a total surface area of 16.8 million m2 – 66% of the total “stock” – spread across 672 locations.

More specifically, shopping centres covered a surface area of more than 11 million m2, with the addition of 175,000 m2 in 2016.

Regarding this year, the Director of Retail Leasing at Cushman & Wakefield in Spain, Cristina Pérez, highlighted the “positive trend” expected in the sector, thanks to the construction of another 100,000 m2 of space, with two centres in Madrid (Sambil and Plaza Río 2) and another one in Barcelona (phase 2 of Glòries).

In terms of retail parks in Spain, the supply now exceeds the European average, with a total surface area of 2.8 million m2.

In terms of high street premises, the head of the area, Robert Travers, explained that it has reached “historical highs”, thanks to the improvement in the economy, growth in tourism and rising consumer confidence.

Moreover, Travers noted that the luxury sector is suffering from a “major” change, following “eight years of euphoria”, due to the effect if terrorism, concerns over the Asian markets and a rise in taxes in China.

In this sense, the Head of High Street confirmed that the growth in luxury stores in Spain is going to be “moderate”.

Cushman & Wakefield’s report also contains information about the boom in e-commerce – which has grown globally by30% since 2007 – and its effect on the real estate sector.

Pérez underlined that it is now necessary “to offer a different social experience” to get “people out of the house” and visiting shopping centres in person.

The Head of Retail Leasing acknowledged that 77% of Spain’s shopping centres “need some kind of improvement”, including modifications to bring them closer to the e-commerce segment.

Original story: Finanzas

Translation: Carmel Drake

BNP: Inv’t In Logistics Assets Reached €662M In 2015

8 June 2016 – Mis Naves

According to the real estate consultancy firm, BNP Paribas, “2015 was an exceptional year” for the logistics sector in Spain, with total investment amounting to €662 million, whereby exceeding the figure recorded in the previous year to register the highest investment volume in the last eleven years.

The data available for 2016, corresponding to the first quarter, confirms this rising trend, with total investment exceeding €320 million between January and March 2016 – this figure essentially relates to three large portfolios: Metrovacesa, Zaphir and Prologis.

For the analysts at BNP Paribas Real Estate, the good performance of consumption and industrial output, which began three years ago, has continued to boost the logistics market in 2015 and so far in 2016. Moreover, the shortage of high quality products has led to a slight increase in income and above all, to a stabilisation of prices. Thanks to the availability of land, new developments may go on the market at these rental prices. For this reason, the consultancy considers that 2016 offers good opportunities for buying and selling logistics assets.

It is worth highlighting two key milestones that are shaping the evolution of the logistics real estate sector and boosting the strong outlook for this sector.

On the one hand, 2014 and 2015 were the years when the highest ever investments were made in logistics warehouses. More than 50% of the high quality logistics warehouses changed hands during that period. The market saw a generational change in owners, with the disappearance of some and the appearance of others. The latter group includes international investors, which have been positioning themselves in the market, including several specialists, such as Prologis, which have strengthened their positioning; and the Socimis, which have secured capital overseas and invested it in this segment to create significant portfolios of logistics warehouses. During the first quarter of 2016, the main Socimis and funds interested in logistics assets invested around €320 million.

On the other hand, consumer habits have changed with the crisis, which has led to a very significant increase in the volume of purchases made online, to the detriment of in-store shopping. In this vein, e-commerce is growing at an average rate of 20% p.a.. To the extent that the volume of purchases made online increases, so too does demand for logistics spaces designed to provide support for these types of businesses. In 2015, around 17,000 sqm of logistics space was leased for e-commerce use. Even so, in Spain, online shopping accounts for just 3% of overall consumption, which reflects the potential for growth in the country, above all if we compare it with other markets such as Germany and the UK, where e-commerce accounts for 10% and 13.5% of all shopping, respectively. (…).

During 2016, consumption is expected to continue to grow with the same energy, along with the leasing of logistics space. Income will continue to increase and yields will continue to decrease due to the shortage of high quality logistics products. The e-commerce business will grow and so too will demand for cross-docking and XXL warehouses. The main Socimis and funds will continue to expand their portfolios with logistics assets. (…).

Original story: Mis Naves

Translation: Carmel Drake