Tag: Emperador

Asian Funds Seek Local Allies to Enter Spanish Real Estate Sector

19 January 2019 – Expansión

Asian investors are joining forces with firms such as UBS, AXA and Savills IM to gain weight in the office, logistics and retail segments, where they still have a limited presence.

Spain has become a key destination for international investors interested in real estate assets, and Asian capital is no stranger to this buying fever that has boosted the sector in the country over the last five years. These investors, who are used to large volume operations, are now trying to gain a foothold in Spain through alliances with large European managers, such as UBS, Rockspring, AXA and Savills Investment Management, which will allow them to participate in smaller-sized operations and enter other sectors such as the office, logistics and retail segments.

The incorporation of new investors, capital funds and Chinese, Japanese and Korean family offices, amongst others, at the hand of the large European managers that are already present in Spain and know the local market well, offers them the possibility of arriving in the country by assuming less risk.

One of the most recent examples is that of the Korean fund manager Igis Asset Management, which, through Savills Investment Management, closed the purchase of Nestlé’s headquarters in Esplugues de Llobregat (Barcelona) last October for €87 million. That operation followed others such as the purchase of the Madrilenian Zielo Shopping Pozuelo and that of the office building located at number 2 Calle Santa Bárbara, both through funds managed by UBS, in turn, financed by Asian capital, amongst others.

Indirect investment

(…). These alliances followed the trickle of mega-operations undertaken in Spain in recent years. The most significant include the deal involving the Philippine group Emperador, which purchased the Torre Espacio building in Madrid, one of the skyscrapers that forms part of the Cuatro Torres complex, from Villar Mir, for €558 million.

Another operation that revolutionised the market involved the Chinese holding company Wanda, albeit ephemerally, as it had to abandon the project just three years later. The group purchased Edificio España (Madrid) from Banco Santander in 2014 for €265 million and sold it in the summer of 2017 to RIU, its current owner (…).

Those two Asian investors were joined by the sovereign fund of Singapore GIC, which, through the Socimi P3 Logistics Parks, acquired a foothold in the logistics market in Spain, one of the segments with the most potential.

Investors from Asia are therefore one group of overseas players who are committed to the country, but they are not the only ones. According to a report compiled by Savills Aguirre Newman, international capital was the major star in 2018, accounting for 70% of the €10.8 billion transacted, the largest percentage since the start of the market recovery five years ago (…).

By origin, investors from Europe and the USA account for almost 57% of the domestic and international investment total and 85% of the volume of operations from overseas. Asia is ranked in third place (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Three New Tenants Move into Torre Espacio

25 September 2018 – Eje Prime

Torre Espacio is almost completely full. The Spanish group Villar Mir has added three new tenants to its property on Paseo de la Castellana in Madrid. The companies have leased 3,019 m2 in the property.

Thanks to this operation, the Spanish group led by Juan Miguel Villar Mir has leased 94% of the total surface area of Torre Espacio, the fourth tallest skyscraper in all of Spain. The supermarket cooperative Coviran, the application design firm Mobetia and the fibre optic operator Ufinet are the three companies that will now carry out their activity in the building.

The property is distributed over 57 floors and is currently owned by the Philippine group Emperador. Its tenants include several embassies, such as those of Australia, Canada and the United Kingdom, as well as the Spanish Banking Association (AEB) and firms such as Red Bull and Equifax.

The arrival of the new companies in Torre Espacio comes in the middle of the divestment plan in which Villar Mir is immersed. A few months ago, it sold 12.2% of its shareholding in OHL, reducing its stake to 38.2%. The main reason for that move was to decrease the group’s debt.

In August, Villar Mir sold the 32.5% stake that it held in the share capital of Project Canalejas to OHL, the construction firm owned by the holding company, for €50 million, according to a statement filed by the company with Spain’s National Securities and Market Commission (CNMV).

Original story: Eje Prime

Translation: Carmel Drake

AEB Sells Its HQ For €10M & Moves To Torrespacio

21 September 2016 – Expansión

The change in AEB’s headquarters represents the final milestone in the transformation and modernisation process that the banking association began a year ago.

The banking association AEB will move out of its traditional headquarters (two and a half floors in a property on the Madrilenian Calle Velázquez) to move, under a lease contract, to one of the floors in Torre Espacio. The skyscraper was constructed by the group OHL and was sold to the Philippine group Emperador at the end of last year. AEB will move at the end of this year or in January 2017.

The economic operation involves the sale of the property in which the headquarters of the banking association has been located since it was founded, for an amount that market sources estimate to be in the vicinity of €10 million. AEB occupies a surface area of 2,400 sqm in that building, therefore, the sales price will amount to around €4,200/sqm. The buyer is a mutual insurance company, whose name has not been revealed, and it will have to modernise the property before leasing it out given that, although it is in good condition, it does not meet the requirements of the new tenants.

In the new location, AEB will occupy most of the 30th floor of Torrespacio, one of the towers that comprises the most modern office complex in the north of Madrid. There, AEB will occupy a surface area of 1,000 sqm, which is significantly smaller that its current headquarters, because, amongst other reasons, the office there is going to be open-plan for all employees, with the exception of the Secretary General and the Chairman, José María Roldón. This move follows a wider trend (towards open-plan offices) in the sector, implemented by BBVA at its new headquarters and a format that Santander is also planning to adopt – it wants to extend the pilot scheme that it has been trialling in its compliance department until now across the whole of its Boadilla del Monte complex. The rest of the floor in Torrespacio, approximately one third of it, will be leased for other activities, completely unrelated to the sector. (…).

Original story: Expansión (by Salvador Arancibia)

Translation: Carmel Drake

Edificio España Hotel: Baraka Negotiates With Starwood, Hyatt & Meliá

20 September 2016 – Expansión

Edificio España will not contain any homes, but it will house a luxury hotel and shopping centre. The Murcian group Baraka, owned by the businessman Trinitario Casanova, is pushing ahead with its new project in Madrid.

In July, Baraka reached an agreement with the Chinese group Wanda to buy Edificio España. The company, controlled by the magnate Wang Jianlin, will sell the Madrilenian skyscraper for a similar price to which it bought it – around €270 million, compared with the €265 million that it paid – two years after acquiring it from Banco Santander, after it ran into problems with the Town Hall of Madrid regarding the renovation of the building.

The new owner, which plans to complete the purchase of the property on 15 October, has decided to eliminate the 300 homes that were included in the original plans and construct a 22-storey hotel, as well as a shopping area, which will occupy the first three floors of the 117m tall building, which has a surface area of 76,000 sqm, according to El Mundo.

In fact, Baraka is already negotiating with several international hotel chains, including Hyatt, Starwood and Meliá, for the rental contract of the future hotel space. The new operator will replace Wanda Hotels & Resorts, the chain that Jianlin was going to open in the middle of 2019, his first property in Spain in the iconic Madrilenian building.

The Town Hall

Whilst Baraka negotiates with the hotel operators to lease more than 67,000 sqm of space, it has also made contact with the Town Hall of Madrid, filing an urban planning consultation regarding the construction work that it may undertake at the property.

The new owner must maintain the façade of the building in tact, something that went against Wanda’s plans, which sought to dismantle the façade of Edificio España “brick by brick” and subsequently reconstruct it using more modern materials.

The inability to develop his plans led Wanda to instruct the property consultancy JLL to sell the building. In the end, the Chinese group opted for the bid submitted by Baraka, and the operation will be completed next month.

Other funds were interested in acquiring this property, which used to belong to Metrovacesa before Santander, including the US fund Hines, the housing manager Domo, the real estate fund of Axa and the Philippine group Emperador, the owner of another skyscraper in Madrid, Torrespacio, located in the Cuatro Torres complex.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Emperador Wants To Completely Fill Torrespacio

19 September 2016 – Expansión

Take advantage of the improvement that the Spanish real estate sector is enjoying to increase the value of its Spanish jewel. That is the objective that the Philippine group Emperador has set itself. The company, which specialises in the sale of alcoholic drinks, erupted onto the real estate market in November with its purchase of the Torre Espacio skyscraper, measuring 235m tall and with a surface area of 60,000 sqm, located in the Cuatro Torres complex in Madrid.

Emperador fought off other candidates that have more experience in the Spanish property market, by offering Grupo Villar Mir €558 million. Ten months later, the Philippine group has launched an ambitious marketing campaign, which includes a new name (Torrespacio versus the original Torre Espacio), with the aim of achieving a 100% occupancy rate in the tower (it is currently around 85% full).

“We want to boost the campaign launched in 2015 when we saw an upturn in office rental prices in Madrid”, explains Eduardo Corral, the CEO of Torre Espacio Gestión, the company (belonging to Grupo Villar Mir) that has been responsible for managing the skyscraper since it was constructed. Its role has not changed as a result of the change in ownership. “The Emperador Group has not asked us to do anything new and although it was not included in the sale and purchase contract, our long-term management contract remains in place”, said Corral.

Prices

The managers of Torrespacio are looking for new tenants to occupy the available space, measuring 8,800 sqm, at a time when office rental prices in Madrid are experiencing a slight increase; they amount to €27.50/sqm/month in the prime office area (CBD) of the city. “We are reviewing our rents, but we are in line with market prices”, says the CEO of Torre Espacio Gestión.

The prices are well below €45/sqm/month that the first tenants paid for the same skyscraper, which is 57-storeys high. “In 2009, we started to fill the building, and we achieved a 70% occupancy rate, but in 2008, we already had preliminary rental agreements, and, despite the crisis, we have achieved an 85% occupancy rate”.

Since it was opened, the main tenant of Torrespacio has been Grupo Villar Mir, something that has not been affected by the change of owner. “Villar Mir continues its commitment to lease the property and, so do the other tenants. The next lease contract is not due to expire for three years”.

Tenants

The future tenants will not only be neighbours of Villar Mir, but also of the British, Dutch, Canadian and Australian embassies, the tobacco company BAT, Red Bull, Ubi and the Emperador group itself, which has opened its Madrilenian offices on the 28th floor of the skyscraper. “They are just finishing their move”, confirms Corral. Before the arrival of Emperador, the most recent tenant to move into the tower was the Chinese group Qbao, who moved in at the beginning of the year.

Of the available space, there is just one floor left in the top third of the building (the 44th floor), four floors in the middle section (floors 31, 29, 27 and 23) and two half floors. “We have one of the best buildings in Madrid and Europe, and the companies that move in will enjoy services such as a gym, a hairdresser, facility services, three restaurants and a chapel”.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Mastercard & Commerzbank Move Into Torre de Cristal

13 September 2016 – El Confidencial

The Cuatro Torres district is the new “City” in Madrid and is one of the areas where the leading real estate players have been operating with the most intensity over the last two years. The company chaired by Ignacio Garralda, Mutua Madrileña, fired the starting gun in February 2015, when it signed an agreement with KPMG to lease 18 floors in the Torre de Cristal, a third of the entire building, in an operation that allowed it to boost its occupancy rate from 42% to 70%.

Just four months later, Grupo Villar Mir put Torre Espacio up for sale, which the Philippine Group Emperador ended up buying for €558 million. By then, the skyscraper where PwC has its headquarters – the black tower that is also home to the Eurostars Hotel – had already changed hands, thanks to Merlin’s acquisition of Testa, and the sheikh Khadem al Qubaisi had already started putting the feelers out to sell Torre Cepsa, the skyscraper for which Amancio Ortega has offered to pay €490 million, according to El Confidencial.

Amidst this game of Monopoly being played out at the north of Paseo de la Castellana, two overseas financial entities, Mastercard and Commerzbank, have decided to transfer their offices to Torre de Cristal, the highest building in Spain, which measures 250m tall and contains 52 floors.

The credit card company has already moved into the skyscraper, whilst the German bank is currently undertaking refurbishment work ahead of its move before the end of the year.

But these two entities are not the only ones who have decided to move into the building owned by Mutua Madrileña. In recent months, following the arrival of KPMG with its 1,900 professionals, Torre de Cristial has seen a significant increase in the number of itstenants, after sealing several agreements with companies such as Red Hat, Cerner and Gesternova, which has allowed it to increase its occupancy rate to more than 82% and lease out a further 5,000 sqm.

Hardly any free floors left

The direct impact of the appetite for these skyscrapers from tenants and owners alike means that there are hardly any free floors left in the Cuatro Torres district (…).

Tower Sacyr (now owned by Merlin) is the only fully occupied tower, but it had to drastically reduce its rental prices to reach an agreement with PwC in 2011, during the worst years of the crisis, in order to acheive that.

Bankia also demanded that Cepsa occupy 100% of Torre Foster, but the oil company has now decided to put eight vacant floors up for rent. Those floors have a surface area of 13,000 sqm, a figure that is slightly higher than the 10,200 sqm that is also being marketed in Torre Espacio, the skyscraper where the main tenant is Grupo Villar Mir, which occupies half of the building.

These numbers show that the average occupancy figure for the Cuatro Torres district now exceeds 80%, a ratio that it has reached at a time when Azca, the traditional financial district in Madrid, is seeing a significant number of its properties undergo profound transformations.

The Cuatro Torres area will be further consolidated as a business centre with the upcoming construction of the so-called Fifth Tower, a skyscraper being developed by Grupo Villar Mir, in partnership with the fund Corestate, which Instituto de Empresa will occupy along with the health group Quirón, according to experts.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Wanda Accelerates Timetable For Edificio España Sale

29 June 2016 – Expansión

Wanda wants to get its homework done before it goes on holiday and so has decided to accelerate the sales process for Edificio España. Following a recent visit to Spain by representatives of the Chinese group, Wanda has called on the interested parties to submit binding offers for the iconic Madrilenian property. Candidates have until tomorrow to present their final proposals.

The business conglomerate led by Wang Jianlin, which acquired Edificio España from Banco Santander in June 2014 for €265 million, engaged the real estate consultancy firm JLL to manage the sale of the property a year and a half after its acquisition. The possible buyers include the Chinese group Fosun, the Philippine group Emperador, the Hong-Kong based firm Platinum Estates and the Spanish RE manager Domo. Sources at JLL declined to make any comments about the process.

During their stay in Spain, the representatives of the Chinese group met with some of the candidates and revealed certain information about the property, located in Madrid’s Plaza de España, as well as about the company Renville Invest, which is the immediate owner of the building.

In addition, although the positions adopted by the Town Hall and Wanda, regarding the approach to the renovation of the property, seem irreconcilable, the Chinese group is still in contact with Manuela Carmena’s urban planning team, according to sources at the Town Hall. Specifically, the councillor responsible for the Sustainable Urban Development department, José Manuel Calvo, met with Wanda’s representatives on 14 June to discuss the project for remodelling Edificio España.

The main obstacle in the negotiations between the municipal team and the Wanda group lies in the Town Hall’s demand to preserve the façade of the property, as required by law, a position opposed by Wanda, which had been hoping to demolish the building and reconstruct it.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Domo Submits Bid To Wanda For Edificio España

31 May 2016 – Cinco Días

Domo Gestora has submitted an offer to acquire the historical Edificio España as part of the sale process that the Chinese group Dalian Wanda currently has underway. Three sources close to the operation have confirmed the bid, but it is expected that the company will have to compete with other interested parties.

The sale of Edificio España is being managed by the consultancy firm JLL, which declined to comment on the process. The intermediary closed the first deadline for the presentation of non-binding offers last Friday, 27 May 2016. Over the next few weeks, the Chinese group will analyse the offers it has received for the building, in which Wanda had planned to open a hotel and luxury homes, as well as a shopping arcade. The plan is to finalise the sale before August. Domo is one of the possible candidates to take over the property and is expected to form an alliance with a hotel partner or other investor, whose identity has not been revealed.

Domo is a medium-sized company that specialises in the management of housing cooperatives. According to the sources familiar with the transaction, it could become the perfect local partner to take over the renovation and marketing of the apartments. The management firm has been in the news recently for its involvement in Residencial Maravillas, a luxury housing development on Calle Raimundo Fernández Villaverde (in Madrid), where work has not started yet and whose approval divided the municipal Ahora Madrid government.

The sources consulted understand that Wanda lost interest in this Madrilenian project after it was unable to carry out its renovation plans, which involved demolishing the property to rebuild it from scratch in keeping with the original style. After the plans were rejected by the Administration, the company decided to withdraw its complex renovation plans. The group purchased the 1950s building from Santander for €265 million in 2014. Domo is thought to have been inspired by a proposal put forward by the architect Carlos Rubio Carvajal, who submitted a more respectful design to the financial institution.

In addition to Domo’s offer, sources in the sector indicate that other investors, who were potentially interested in the building initially, have also analysed this operation, however, it is not known whether they have submitted bids in the end or not. The other parties include the Chinese fund Fosum, the Hong Kong-based firm Platinum Estates, the Philippine group Emperador – which recently acquired Torre Espacio from the Villar Mir Group -, the US fund Hines and the insurance company Axa, which declined to comment on its involvement in the sale. Both Wanda and JLL are maintaining the utmost confidentiality surrounding this transaction.

Experts in the sector indicate that Wanda will only be interested in selling the property if the consideration offered exceeds the €265 million it paid in 2014. Meanwhile, the Asian group is continuing its negotiations with the Town Hall regarding the handling of the renovation work, given that the property would be worth more if the group manages to obtain the necessary building permits.

Original story: Cinco Días (by Alfonso Simón)

Translation: Carmel Drake

Wanda To Resume Renovation Of ‘Edificio España’

21 April 2016 – Expansión

The Town Hall of Madrid and Wanda wrote another chapter in their tug-of-war story that began back in July 2014, when the Chinese Group purchased Edificio España from Banco Santander for €265 million, with the aim of converting it into a luxury hotel, shopping centre and homes.

The main sticking point in the negotiations between Manuela Carmena’s town hall team and Dalian Wanda has centred around the Town Hall’s requirement to maintain the façade of the landmark building, an idea that Wanda opposes. The group has threatened to look for alternative solutions and even to abandon the project.

But now, it seems that Wanda has accepted Carmena’s conditions to go ahead with its plans. In the face of the uncertainties generated by the Chinese company’s position, the Town Hall of Madrid sent a letter to Michael Qiao, the CEO of the Asian Group, on 6 April, asking him to confirm the decision regarding their plans for the building within 15 days. The councillor for Sustainable Urban Development, José Manuel Calvo, announced yesterday that the Asian firm has responded to the letter indicating that it still intends to construct a hotel and that, following this confirmation, it expects the project to resume “shortly”. Nevertheless, Calvo was wary of discussing timeframes.

In parallel, the Chinese group still has a mandate with the consultancy firm JLL to sell the property and its efforts to find a potential buyer are on-going, according to sources close to the process.

Other interested parties

As part of this process, the US fund Hines and the Philippine Group Emperador have both expressed their interest in the property. JLL declined to make any comment about the matter. (…).

The councillor for Sustainable Urban Development confirmed that “there is no way” that the property “will be demolished”, although “it is perfectly reasonable for any one element that is in poor condition to be replaced”.

Calvo referred to the leaked letter and highlighted that it contained the urban planning rules and corresponding exceptions, but insisted that “no-one has had to resort to selling out or changing any laws”.

At the beginning of March, the multinational company confirmed to the mayoress that it intends to stay in Madrid and implement its plans for Edificio España, after weeks of speculation regarding the possible abandonment of the project, which were fuelled by the Chinese group’s decision to close its headquarters in Madrid.

At the beginning of the year, Wanda Madrid Development decided to close the office that it had opened in the Spanish capital to undertake the remodelling of the landmark building, which has been empty for years.

The Town Hall has always maintained that Wanda purchased the building knowing that the building was a partial level 3 listed property, due to its historical-artistic value, which prevents it from being knocked down.

The Local Historical Heritage Commission, in which the Community of Madrid and the Town Hall participate, agreed to relax the requirements to promote the sale of the building, which is very run down due to inactivity, provided the façade is respected.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hines & Emperador Bid For Edificio España

2 March 2016 – El Confidencial

Two of the largest real estate investors in the world want to buy Edificio España. The US giant Hines and the Philippine group Emperador, which has just acquired Torre Espacio, have already taken up their positions in the sales process launched by the Wanda Group for the skyscraper, according to several sources close to the operation.

The Chinese group has engaged the consultancy firm JLL to find a new owner for the property, which it has decided to sell after failing to reach an agreement with the Town Hall of Madrid regarding the handling of the renovation.

Not even the meeting held yesterday between Manuela Carmena and Laurent Fischler, Wanda’s Global Head of Real Estate, managed to put a stop to JLL’s sales mandate, although the consultancy firm declined to make any comment. This meeting was held at the request of the mayoress, anxious about the earthquake unleashed by the Asian group’s decision to leave Madrid. But the only thing she managed to agree with Wang Jianlin’s envoy was the firm’s willingness to remain in the capital, provided the town hall gives something in return.

Nevertheless, there are only a handful of investors with the capacity to undertake the purchase, which could range between €250 million and €300 million (Wanda paid €265 million two years ago), a quantity to which another €100 million should be added for the subsequent construction work to renovate the property.

And that figure is mounting, because the final cost of the renovation will depend heavily on the agreement that the Town Hall of Madrid approves, and the survival of Norman Foster’s project, who has threatened to take Wanda to court if it breaks the agreement signed to develop the architecture project.

The reality is that Wanda inherited this contract from Banco Santander and in theory, the buyer would also be subrogated to it, according to real estate sources. But that honour has discouraged some of the large international funds from bidding for Edificio España, as they prefer to avoid large firms because they make the construction work more expensive.

Giants in the market

By contrast, the profile of Hines and Emperador fit well, given that their investments typically focus on iconic buildings, located on the main thoroughfares of large capital cities and, in many cases, linked to unique architectural projects. Ingredients which, if the negotiations with the town hall are unblocked, are present in abundance in the case of Edificio España.

The US firm Hines is an expert in this kind of development and is currently involved in a growth plan in Spain, which has led to the signing of two operations – for the Desigual store next to Portal del Ángel in Barcelona and number 44, on Madrid’s Gran Vía – in less than two months, for a combined total of €78 million.

And its future plans are even more ambitious, as shown by the fact that it is actively seeking out large transactions in both Madrid and Barcelona. With $87,000 million (€80,000 million) in assets under management, Hines is the fourth largest real estate investment management company in the world.

Meanwhile, Grupo Emperador is one of many companies that comprise the business empire of the Philippine-born Andrew Tan, one of the richest people in the world according to Forbes. (…).

Despite all of these possessions, Tan was virtually unknown in our country until last November when he acquired Torre Espacio with a bid for €558 million, an amount that he largely financed in cash and with a syndicated loan for €280 million from ING Wholesale Banking.

This operation is just the tip of the iceberg of the group’s plans. Emperador has also set itself the objective of multiplying its investments in Spain, both in the real estate sector, as well as in those markets linked to the world of spirits, where it has worked in conjunction with González-Byass for many years.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake