Inbest Completes its Purchase of a Property in Valencia from El Corte Inglés

5 March 2019 – Las Provincias

The fund manager Inbest Real Estate has formalised its purchase of an asset on Calle Colón in Valencia from El Corte Inglés. The property spans a commercial surface area of 7,600 m2, has 84 parking spaces and contains an office building measuring around 1,800 m2.

The deal forms part of an agreement reached between Inbest and the department store giant last August, which saw the fund acquire assets from ECI in Bilbao and Madrid for €184 million (for the three buildings).

Inbest was only created a year ago, but its portfolio already comprises iconic real estate assets worth more than €350 million, located on the main commercial thoroughfares of Madrid, Bilbao and Valencia.

Original story: Las Provincias

Translation: Carmel Drake

El Corte Inglés Sells a Store in Valencia to Corpfin Real Estate

11 October 2018 – Expansión

The distribution group is finalising the sale to Inbest, a vehicle owned by Corpfin, of two premises, joined together to form a 7,000 m2 centre, on the Valencian street of Calle Colón.

El Corte Inglés is taking another step forward in its non-strategic asset divestment policy to reduce its debt. To this end, it is finalising the sale to Corpfin Real Estate of two premises converted into a single commercial space, located in Valencia, for more than €90 million, according to market sources speaking to Expansión.

The premises, both located on Calle Colón – one of the main commercial thoroughfares in Valencia – have a combined surface area of 7,000 m2.

It is the second operation that the two groups have signed in recent months, after they reached an agreement in the summer to sell two more retail premises on Gran Vía in Bilbao and Calle Princesa in Madrid, with a combined surface area of 8,800 m2, for €93 million. Like in those cases, this latest operation will be executed using the sale & leaseback formula, which means that El Corte Inglés will remain as the tenant following the sale, and the operation will not affect the business or its employees in any way.

This operation will allow El Corte Inglés to reduce its debt, which currently amounts to €3.65 billion, and to optimise its resources. The premises that have been sold in Valencia belonged at the time to a real estate portfolio that the group purchased from Marks & Spencer when the British firm left Spain. The stores are very well located but they are also some of the firm’s smallest premises in the city, where it has four large department stores on: Avenida de Francia, Pintor Sorolla-Colón, Ademuz and Nuevo Centro.

Meanwhile, the operation allows Corpfin Real Estate to continue growing Inbest’s asset portfolio. At the beginning of this year, the manager launched this vehicle comprising several Socimis, which it was thought may debut on the stock market possibly before the summer. This vehicle was created with the aim of investing €400 million, between capital and financing, before 2021, although, with this operation, it has now almost fulfilled that objective.

In addition to the premises acquired from El Corte Inglés, Inbest has reached an agreement to purchase the commercial area in Edificio España from RIU for around €160 million. Similarly, this summer, it purchased a store measuring 1,500 m2 on Calle Triana, in Las Palmas de Gran Canaria, from an Indian family.

Original story: Expansión (by R. Arroyo & V. Osorio)

Translation: Carmel Drake

El Corte Inglés Values its Real Estate Assets at €17.1bn

25 September 2018 – Expansión

The properties owned by El Corte Inglés are worth €17.147 billion, according to the most recent valuation entrusted by the company to Tinsa for the end of its financial year, February 2018. That is the valuation that the company shared with investors interested in the placement of €600 million of its bonds.

This real estate portfolio, which according to previous reports was worth almost €17.0 billion, comprises 94 shopping centres, of which two are located in Portugal. These shopping centres account for 87% of the total value of the company’s assets. El Corte Inglés warns investors that this valuation may have to be adjusted in the future, given the illiquid nature of its real estate assets.

Tinsa’s study segments the distribution company’s shopping centres by value. Two of them are worth more than €500 million each, and another two are worth between €400 million and €500 million. The bulk of the centres, 45 to be precise, have a valuation of between €100 million and €200 million. Six of the centres are worth between €300 million and €400 million.

32% of the value of the real estate assets of El Corte Inglés are located in Madrid, whilst 10% are located in Barcelona. Málaga and Valencia are home to 6% each; Sevilla another 4%; and the other Spanish regions, the remaining 42%.

The bulk of the valuation of El Corte Inglés’s real estate portfolio, €14.964 million, corresponds to its stores and shopping centres

The company highlights that it owns the largest portfolio of real estate assets of any of the companies in its sector in Europe. The total surface area of its real estate assets spans 3,994 million m2.

This independent valuation entrusted to Tinsa does not include the real estate operations carried out by El Corte Inglés since February of this year. In August, the company sold two shopping centres located in Madrid (Princesa) and Bilbao (Gran Vía) to Corpfin Capital Real Estate for around €100 million.

Quarterly results

The results of El Corte Inglés remained practically stable YoY during the first quarter of its financial year, which finished at the end of May. According to the unaudited provisional accounts, the company lost €50 million during that quarter, compared with losses of €51 million during the same period in 2017.

The company’s sales grew slightly, with net revenues of €3.417 billion, just above the €3.413 billion recorded during its first quarter last year.

According to the unaudited provisional data at the end of July 2018, corresponding to the first five months of the financial year, sales fell by 0.1% YoY and EBITDA decreased by 0.6%.

This result is explained by a decrease in revenues in the retail and technological departments, which were partially offset by an increase in sales in its travel agency and insurance departments.

El Corte Inglés explains to investors interested in its bonds that sales of clothing were hit during that period due the unusual climate this year (…).

Original story: Expansión (by A. Roa & D. Badia)

Translation: Carmel Drake

ECI & Matutes Negotiate the Sale of Ayre Hotels for €200M

12 January 2018 – Expansión

Advanced conversations / The retail giant and hotel chain want to cash in on the sale of a hotel portfolio comprising five establishments and more than 800 rooms.

El Corte Inglés and Grupo Matutes want to take advantage of the good times that the tourist sector is enjoying and the investor appetite for the real estate market to sell some of the assets in the Ayre chain – a brand of urban hotels, which they jointly control (50:50) – and make some money.

Specifically, the groups are finalising the sale of a portfolio comprising five hotels, with more than 800 rooms, located in Madrid, Barcelona, Oviedo and Córdoba, worth around €200 million, according to sources in the sector. Those sources indicate that the two companies have already received several offers and that the operation could be closed during the first quarter of the year.

Ayre was created in 2006 as the urban brand of the Palladium Hotel Group – then known as Fiesta and belonging to the Grupo Empresas Matutes (GEM) –. At the end of that year, El Corte Inglés purchased a 50% stake in the chain, through Parinver, its holding company. The retail group classified that acquisition as an operation of a financial nature at the time.

Currently, the urban chain Ayre owns 10 hotels in Madrid, Barcelona, Sevilla, Valencia, Córdoba and Oviedo. Last summer, the companies decided to put half of the assets up for sale and reposition at least two of the other establishments – the hotels in Valencia and Sevilla – under the Only You brand, the premium sub-brand of Ayre.

The company that owns Ayre is FST Hotels, controlled equally by Fiesta Hotels & Resorts (Grupo Matutes) and Parinver (El Corte Inglés). FST Hotels, which is headquartered in Palma de Mallorca, closed 2016 with turnover of €49.4 million, up by 14% and a net profit of €4.2 million, up by 100% compared to 2015, according to the most recent accounts filed with the Commercial Registry.

The President of the Company is Abel Matutes Juan, whilst Florencio Lasaga, the director of El Corte Inglés and President of the Ramón Areces Foundation (its largest shareholder) serves as the Vice-President. FST Hotels also has Jesús Nuño de la Rosa, the CEO of El Corte Inglés, on its Board, as well as Carlos Martínez Echevarría and Cristina Álvarez Guil, both directors of the retail group; and Abel Matutes Prats, Director General of Palladium, amongst others.

The operation forms part of the strategy of Grupo Palladium, whose objective is to grow through hotel management, and move from being an owner to a manager, in line with other Spanish chains. Palladium, which is headquartered in Ibiza and is more than 40 years old, has 50 hotels in six countries – Spain, Mexico, Dominican Republic, Jamaica, Italy and Brazil – and operates three other brands besides Ayre: Palladium Hotels & Resorts, Fiesta Hotels & Resorts and Ushuaïa.

Meanwhile, El Corte Inglés would add the sale of this hotel portfolio to the list of non-strategic divestments that the group has undertaken in recent months: in November, it reached an agreement with the fund GPF to sell it the management of its Motortown workshops, located in 55 of its shopping centres; in October, the company chaired by Dimas Gimeno sold 40% of Torre Serrano to Infinorsa for €50 million; and in September, it sold off a logistics warehouse in La Bisbal del Penedès (Tarragona). The group has also sold buildings in Madrid, Barcelona and Sevilla, amongst other cities, in recent months.

Original story: Expansión (by R. Arroyo and V. M. Osorio)

Translation: Carmel Drake

El Corte Inglés Should Receive Approval for Madrid Mega-Centre in March

23 December 2017 – Expansión

Three years have passed since El Corte Inglés acquired the most sought-after plot of land in Madrid, a space measuring 13,000 m2, located on Paseo de la Castellana. The group paid €136 million to be awarded the land, previously owned by Adif, in a deal that involved an initial payment of €68 million, followed by the disbursement of the remaining amount three years later. And that is also how long it has taken for El Corte Inglés to process the paperwork to allow it to expand the jewel in its crown, its Castellana shopping centre. According to sources familiar with the process, in January, the Town Hall of Madrid will submit its approval of the definitive plan to the central Spanish Government (…). According to the same sources, if all goes according to plan, El Corte Inglés will receive the green light to expand its Castellana megacentre in March, or, in any case, before the summer.

A complex project

The wait of more than three years to unblock the project has been due to a mix of complexity and bad luck. The urban planning proposal for the land established a total buildable surface area of 35,192 m2, of which 10,176 m2 corresponded to three above-ground storeys for tertiary use and 25,000 m2 to four underground basement floors for parking.

This proposal was very complex given the location of the land, located as it is, right on top of the Nuevos Ministerios Metro and Renfe stations (…).

Once it has been given the green light, it is likely that El Corte Inglés, which declined to comment, will not take long to start the building work to expand its Castellana centre. Its flagship store in the Spanish capital spans a surface area of more than 170,000 m2, with 70,000 m2 of retail space spread over seven floors and 1,600 underground parking spaces. More than 3,000 people work there.

According to sources in the sector, El Corte Inglés will also take the opportunity (of the construction of the new building) to reorganise the retail space that it owns in Nuevos Ministerios, and which includes its stores located between number 83 and 85 Paseo de la Castellana, which it sold to the real estate firm Monthisa in September 2016 through a sale and leaseback agreement (…).

Premium fashion and gastronomy

The marketing and design of the new retail space that El Corte Inglés is preparing to build on the land acquired from Adif is being carried out with the utmost secrecy by the retailer, which has refused to hire real estate agents like normally happens in these types of projects (…).

The most likely course of action is that it will create a premium space to house luxury brands and the highest-level gastronomy – although that is not the only possibility that the retail chain is currently contemplating -. That would strengthen one of the main objectives of its star centre: to attract tourist shoppers in the capital (…).

Original story: Expansión (by V. Osorio and R. Ruiz)

Translation: Carmel Drake

Aligrupo Family Office Acquires Residential Building In Chamberí

7 November 2017 – Eje Prime

Family-owned real estate companies are continuing to fatten up their asset portfolios. In this vein, Aligrupo has just acquired number 13, Calle Francisco Ricci, located in the Madrilenian neighbourhood of Chamberí. Until now, the property was owned by a private investor.

Aligrupo plans to turn the property into a new housing development to meet the growing demand in the area. The building is located next to the ICADE study centre and the El Corte Inglés store on Calle Princesa. The operation has been brokered by the real estate consultancy firm JLL.

It is a residential building that needs renovating and which, given its surface area and layout, lends itself to the construction of homes with space for common areas such as garden areas or a swimming pool.

Original story: Eje Prime

Translation: Carmel Drake

ECI Puts Colón Building In Valencia Up For Sale

21 September 2017 – Levante EMV

El Corte Inglés has put the building located on Colón, 1 (in Valencia) up for sale for €90 million, according to sources close to the operation. The building, which used to house a Marks & Spencers store, is currently home to a Sfera shop and youth clothing departments. The company has put three floors and the basement up for sale. The upper floors are offices and do not form part of the operation.

The objective of the company is for an investor to buy the building and then lease back the space. This type of operation is known in the real estate sector as a sale and leaseback arrangement and in recent years, banks such as Santander have adopted the same formula. Some interested parties have already visited the property.

The sale of Colón, 1 forms part of El Corte Inglés’ divestment process, which it initiated a few months ago. The same sources cited above highlight that it is the only property that the department store has put up for sale in the Community of Valencia. The company did also consider the option of putting the building at Colón, 25 up for sale, but ruled that out in the end because the land rights belong to the Colegio Imperial de Los Niños de San Vicente.

The idea of the distribution group chaired by Dimas Gimeno is to get rid of its “non-strategic” real estate assets all over Spain, in order to reduce its debt. The total (asset) sales volume is expected to amount to around €1,000 million; to put that figure in context, the group owns assets worth around €18,000 million.

The building that has gone on the market now has a surface area of 7,343 m2. Another property, in Bilbao, worth around €70 million and measuring 5,487 m2, will also be put up for sale. The other properties are located in Albacete, Burgos, Jaén, Madrid, Murcia, Oviedo and Sevilla.

El Corte Inglés acquired the property on Colón, 1 from the British retail giant Marks and Spencers 16 years ago, together with 8 other department stores, located all over Spain, for around €150 million.

El Corte Inglés recorded profits of €160.63 million in its most recent financial year, which ended in February, up by 3% compared to a year earlier; and it increased its sales by 2% to €15,504 million, whereby recording its third consecutive years of sales growth, according to the group’s annual accounts. ECI is now backing the internet to continue its path of growth.

Original story: Levante EMV (by Ramón Ferrando)

Translation: Carmel Drake

ECI Sells 40% Of Torre Serrano To Infinorsa For €50M

14 September 2017 – Expansión

El Corte Inglés has sold 40% of the company Iberiafon, owner of the Torre Serrano building in Madrid, to the real estate company Infinorsa for €50 million, according to sources at the distribution giant.

The firm that has acquired the property, which is owned by several European funds, already owned 60% of Iberiafon’s share capital and also owns other buildings in Madrid, such as Torre Europa.

This operation, which forms part of the distribution group’s divestment plan, effectively assigns a value of €125 million for 100% of the property. The building’s current tenants include the Masaveu Group and the firms GVC Gaesco and Beka Finance, amongst others.

Located at number 47 on one of the most exclusive shopping arteries in Madrid, next to the El Corte Inglés department store on Calle Serrano, the tower has 13 floors, which have a combined surface area of 20,000 m2, including a 5,700 m2 car park.

Half of the total space is used for offices, whilst the shopping area occupies 4,300 m2, which will continue to be leased to the group chaired by Dimas Gimeno, according to the press release.

El Corte Inglés closed its last tax year, from March 2016 to February 2017, with a 2.4% increase in its net profit, to €161.86 million. That saw the group record three consecutive years of growth, whilst the gross operating profit (EBITDA) soared by 7.5%, to reach €981 million, according to the distribution giant.

Specifically, the profit, the highest in the last three years, has been affected by €178 million relating to “disengagement plan”, which has affected 1,341 people.

Original story: Expansión

Translation: Carmel Drake

ECI Puts Logistics Assets Worth c.€300M Up For Sale

10 August 2016 – Expansión

The distribution giant El Corte Inglés has engaged Morgan Stanley to find investors who may be interested in acquiring assets worth between €200 million and €300 million, according to real estate sources.

Specifically, the company chaired by Dimas Gimeno intends to divest 33 assets, which have a surface area spanning more than 500,000 sqm, as well as five plots of land.

The assets on the market include rental contracts guaranteed for five, ten, fifteen and twenty years; and the deadline for submitting non-binding offers will close at the end of September.

Sources consulted indicate that some of the warehouses included in the sale are not sufficiently tall enough to meet with current demands from investors for this type of asset, which has forced them to adjust the duration of their contracts, as well as the rental prices.

The batch for sale, which comprises 38 assets in total, including the plots of land, contains: El Corte Inglés’ logistics centres in Bisbal del Penedès (Tarragona) and on La Peluquera industrial estate in Madrid. It also includes other assets on Las Atalayas industrial estate (in Alicante) and the Goro en Telde estate (in Gran Canaria).

By contrast, El Corte Inglés has not included any assets currently considered to be strategic in the batch. Thus, for example, the jewel in its logistics assets crown will not be included: its mega centre in the south of Madrid.

Reduce debt

The company, which seeks to reduce its debt balance with these divestment operations, may consider selling other types of non-strategic real estate assets in the future, as Expansión revealed in March.

These real estate asset divestments follow others completed by El Corte Inglés in recent years. In this way, in the summer of 2013, the distribution group completed the sale of a building next to Plaza de Cataluña in Barcelona to the fund manager IBA Capital.

Months later, it sold another property to the same investor on Calle Preciados in Madrid.

Other divestments

Last December, the chain sold another building in the iconic Puerta del Sol in Madrid for €65 million to the US fund Thor Equities. At the time, the group agreed to continue to occupy the building, which houses its book store and is located in one of the most important shopping areas of the capital, for another year.

Similarly, in February, the group sold the building that it had acquired ten years ago on Calle Fontanella in Barcelona for €17 million to a Russian investor, which plans to convert the property into a hotel.

By contrast, El Corte Inglés has also completed several important asset purchases in recent years. In this way, the company acquired a plot of land from the railway infrastructure manager Adif, right on Paseo de la Castellana for €136 million in 2014. This plot of land is located next to one of the company’s main shopping centres in the capital, in Nuevos Ministerios.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

ECI Opens Logistics Platform In Tarragona

4 August 2016 – Logística Profesional

El Corte Inglés has opened a new logistics platform in the Tarragonese town of La Bisbal del Penedès. The facilities, located on a plot of land measuring more than 230,000 sqm, has a storage surface area of more than 45,000 sqm as a result of the first phase of construction, which has involved investment of almost €70 million.

The new platform, according to sources at the company, will serve to “complement” the storage and distribution centre that the Group has in Montornès del Vallès (Barcelona), with a surface area of 200,000 sqm.

The centre, which may be enlarged in the future, will serve to support the company’s activities in Cataluña, Aragón, Levante, Murcia and the Balearic Islands.

Besides its logistics centres in Cataluña, El Corte Inglés group owns another platform in Valdemoro (Madrid), whose storage surface area exceeds 500,000 sqm.

Original story: Logística Profesional

Translation: Carmel Drake