Tag: Ericsson

Is Málaga the Silicon Valley of the South? Its Offices Generate Yields of 7.25%

7 January 2019 – Eje Prime

Málaga is positioning itself as the possible Silicon Valley of the south of Spain. The second most populated city in Andalucía and the only Spanish city in the Top 10 for the best quality of life in Europe, according to Eurobarómetro, has attracted several technology giants in recent years. The interest from these companies in moving to the area and the lack of available space have driven up prime yields in the office market in Málaga to 7.25%, making it the most profitable place to own an office in Spain, according to data from CBRE.

The international consultancy highlights that Málaga is “consolidating its position as a city of reference in Spain in the development of the technology sector”. Oracle, Accenture, Microsoft, Huawei, Ericsson, Indra, Atos and Cisco, amongst others, have all opened offices in the city. The meeting point for these companies is the Andalucía Technology Park (PTA), recently included in the catalogue of European Digital Innovation Hubs, compiled by the European Commission, and which recorded a turnover of €1.9 billion in 2019, up by 8%.

In addition, the province is home to other smaller clusters, such as Málaga SmartCity and the ‘Polo de Contenidos Digitales de Málaga’, the first hub with those characteristics in Spain and which aims to accelerate projects and companies related to the digital sector.

The increase in demand for offices in the city also comes in response to the future forecasts for growth in the region. In fact, Oxford Economists names Málaga as the city where the economy is going to grow by the most in Spain over the next decade. The good connectivity of the province abroad and tourism are some of the factors driving those predictions.

In recent years, Málaga has enjoyed a facelift in recent years with improvements in its infrastructures, and the airport and port as anchors for tourism and business. In addition, the population has increased to 570,000 inhabitants in recent years and there are now more than 40,000 companies, of which 87.1% specialise in services.

These drivers have reactivated the office market, which has taken advantage of the boost in demand, on the rise since 2015. Rentals cost €17/m2/month in the city’s best buildings and the occupancy rate in the prime area exceeds 90%.

The shortage of competitive products in terms of location, finishes and facilities, has driven the increase in yields. In comparison with Madrid and Barcelona, the variation in prime yields is great, improving the yields of 3.25% and 4% that were being registered in the two major Spanish capitals at the end of the third quarter 2018.

Moreover, the office market in Málaga also generates higher yields than the market in Bilbao, although it is not far behind with average yields of 7%, as well as those in Sevilla and Palma, which do not exceed 6.75%. The yields in Valencia and Zaragoza amounted to 5.25% and 6%, respectively, in September last year (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

KCRE Acquires 5,600 m2 Office Building in Madrid

18 December 2017 – KCRE Press Release

Kefren Capital Real Estate (KCRE) has closed the acquisition of an office building located on Calle Juan de Mariana, 15 (Madrid). The property was Grupo Segur Iberica’s headquarters until the company filed for insolvency during the summer. PwC, the receiver administering the liquidation proceedings, awarded the asset to Kefren Capital, as the winner of a competitive bid process.

The building was completed in 1994 and comprises c. 3,600 m2 above ground, spread over 5 floors, and more than 2,000 m2 below ground, including 39 parking spaces. “The building is very flexible – it would be ideal as the headquarters for: a company wanting a central location at a competitive rent; a co-working office in the south of Madrid, very close to the high-speed train; or as a mixed-use building offering the possibility of servicing last-mile logistics thanks to a loading dock at street level” states Pelayo Primo de Rivera, CEO of KCRE.

It is located in the Méndez Álvaro-Delicias district, a consolidated business area home to large companies such as Repsol, Amazon, Gas Natural, Ericsson, CLH and Mahou, with excellent public transport and road connections. The building is just a 15-minute walk from Atocha train station and Parque del Retiro (to the north), and a 5-minute drive to the M-30 ring road (to the south).

Over the last 10-15 years, Méndez Álvaro has benefited greatly from the general gentrification of Madrid’s southern neighbourhoods and the comprehensive supply of services that new office and residential developments have brought with them.

KCRE has been advised by Araoz y Rueda on legal matters and Mace on the technical side. The c/Juan de Mariana 15 office building is the 4th successful value-added transaction that Kefren Capital Real Estate has completed in 2017.

Kefren Capital Real Estate

KCRE is a real estate asset management company created in 2012 by the investment firm Kefren Capital. KCRE offers investors the full range of services required for real estate transactions: sourcing, analysis, financing structuring, deal negotiation and asset management. What differentiates KCRE from other platforms is its ability to co-invest and its investment philosophy – assets are managed from the perspective of the owner and not simply as a third-party manager.

Original story: KCRE Press Release (by Pelayo Primo de Rivera)

Translation: Carmel Drake

Procisa To List La Finca Business Park As A Socimi

12 May 2016 – Cinco Días

The real estate company Procisa is finalising a major corporate restructuring process, which will culminate in the IPO of its office business. The company, renowned for having constructed the luxury La Finca urbanisation in Pozuelo de Alarcón (Madrid) will separate its activity into two companies. The residential development business will be called La Finca Procisa and the RE asset business will be called La Finca Global Assets.

The new RE asset (offiec) company will be converted into a listed Socimi, according to sources familiar with the operation. These types of companies have the advantage of being exempt from corporation tax, in exchange for having the obligation to distribute dividends every year. Like all Socimis, La Finca Global Assets will have a period of two years to debut on the stock market.

From the beginning, the Socimi will benefit from having Värde Partners as one of its shareholders – the US fund is currently finalising the acquisition of a 40% stake in the real estate company. The fund, created in Minnesota (USA) in 1993 has been very active in the Spanish market in recent years. (…). The consideration to be paid by Värde in this operation has not been revealed, but the deal is expected to close within the next few days.

The company, founded by the late Luis García Cerceda, is now being led by the second generation – Susana García Cereceda is the Chairman, and it controls the property developer through the holding company Michigan 42. The real estate company recorded revenues of €83.8 million in 2014, the most recent figures available in the registry, and losses of €19 million, along with long-term debt of €511 million.

The new Socimi’s main asset is the La Finca business park in Pozuelo, constructed alongside the luxury residential urbanisation where several footballers live, including Cristiano Ronaldo, Karim Benzema and Fernando Torres. The complex comprises 20 buildings, including 16 offices.

Tenants include companies such as Microsoft, Orange and Accenture. The Hotel AC La Finca is also located there. It is one of the most sought-after business parks in Madrid, given that it has just 0.3% of free space, according to market sources (…).

The future Socimi Finca Global Assets will manage a surface area of offices covering 227,000 sqm. As well as the complex in Pozuelo, the company also owns other office buildings, which will be included in the operation. These include the Marcelo Spínola business centre, constructed in 1991, comprising seven buildings.

In the Méndez Álvaro area, the company owns the Torre Suecia, which is currently leased to the technology firm Ericsson. Close to the A-2, it manages the Martínez Villergas business centre, which houses, for example, Warner’s headquarters in Spain. Moreover, it owns other office buildings on the sought-after streets of Serrano and Almagro.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake