Tag: façades

RIU Sells the Commercial Space in Edificio España to Corpfin

4 September 2018 – Ali Market

The Riu Hotels & Resorts group has closed the sale to the investment firm Corpfin of the commercial space in Edificio España. The space is split over three floors (of a total of 27 in the property) and spans a total surface area of 15,000 sqm. This operation has caused the businessman Trinitario Casanova (Baraka), who intervened in the sale of the property by the former owner, the Chinese Wanda group, to the current Mallorcan owner, to file a lawsuit in the courts against Riu for breach of contract, on the basis that he understood that he had the right to recognise that commercial space in his name. Sources at Corpfin declined to deny or confirm the purchase, whilst sources at Riu confirmed that a sale has taken place (without specifying the buyer) and that the contract with Casanova has been cancelled.

Specifically, sources at Riu explain that “the current owner [of Edificio España] is the Riu group, which is undertaking the necessary work, in accordance with current legislation, to convert Edificio España into a reference hotel in Madrid from 2019 onwards, in addition to maintaining the identity of an architectural example that is of great value to the Spanish capital. In this sense, “Mr Casanova says that he purchased the building and sold it hours later, something that is false. Mr Casanova played an intermediary role between the Riu group and Wanda. Subsequently, a contract was signed whereby Mr Casanova exercised an intermediary role to sell the commercial space in Edificio España, owned by the Riu group, in exchange for a commission on the sales value. Mr Casanova breached the contract, given that he did not look for any buyers and merely submitted an offer to Riu in his own name. That offer was assessed by the Riu Group’s Board of Directors, which considered it insufficient and rejected it. “Given that Mr Casanova was not fulfilling the obligations established in the contract signed between the two parties, Riu received a higher offer for the commercial space in Edificio España and decided to accept it, as well as to cancel the contract with Mr Casanova after more than a year of inactivity by him”.

In all other regards, the Riu group, “as the legal owner of Edificio España” is undertaking the necessary remodelling and maintenance work to strengthen the structure and ensure that the front and side façades of the building are preserved “in order to protect the work of the Otamendi brothers, as established by the Law for the Protection of Historical Buildings”. This work requires a series of modifications and reinforcements to the structure of the building to ensure the preservation of the building and façade in perfect condition. “This work is being carried out in continuous dialogue with the municipal experts. None of the reviews by the municipal architects has led to the issuance of an unfavourable report regarding the execution that is being carried out by the Riu group, which always follow the instructions of the Town Hall’s architects”.

Original story: Ali Market (by Paco Mota)

Translation: Carmel Drake

Grupo Insur Buys Plaza del Teatro Building From Sareb

23 November 2016 – Málaga Hoy

The Plaza del Teatro residential development, one of the most attractive of all the projects currently being undertaken in the historical centre of Málaga, has changed hands once again. Sareb took ownership of the property after the real estate asset was hit hard by the property crisis, and on Friday, the bad bank closed a sales agreement with the Andalucían property developer Grupo Insur (Inmobiliaria del Sur).

The estimated investment could amount to €15 million, including the sales price of the asset (the appraisal that the Town Planning Department performed just a few months ago amounted to €8.7 million) and the construction work, which is expected to amount to almost €6.5 million. The firm, through its subsidiary IDS Residencial S.L.U., will take over the development of the project directly, given that it has been granted a construction licence by the Town Planning Department.

According to sources at the property developer, Insur has complied with the procedures, as well as with the commitments agreed with the Town Hall. The façades of this property must be maintained and restored, but the interior will be renovated and turned into high-rise residential apartments, with retail space on the ground floor and underground parking. Specifically, the refurbished building will comprise 58 homes, 7 retail premises, 58 storerooms and 108 parking spaces.

Marketing of the properties will begin imminently, with construction work due to commence during the first half of 2017. Financial support is being provided by Banco Sabadell, which is offering favourable conditions for future purchasers of these homes. It is expected that this project will generate direct and indirect jobs for more than 140 people.

The planned construction work will involve an investment of €6,456,544.27, according to data provided by the Town Hall. And the project is expected to be completed within 36 months. (…).

Original story: Málaga Hoy (by S. Sánchez)

Translation: Carmel Drake

Baraka Group Agrees To Buy Edificio España For c. €265M

20 July 2016 – Expansión

The Baraka group, controlled by the businessman Trinitario Casanova, has reached an agreement with the Chinese group Dalian Wanda to acquire Edificio España in Madrid, according to reports by the El Mundo newspaper.

The holding company is finalising the details of the operation, which is expected to be completed after the summer. Casanova’s offer, which is understood to amount to around €265 million, reportedly exceeded the bids made by the other interested parties, including the Chinese firm Fosun, Hemisferio and Platinum Estates.

According to reports, Baraka is undertaking a significant expansion program. It recently acquired a plot of land measuring more than 10 million sqm in Valdebebas (Madrid) for around €75 million.

The “for sale” sign went up over the iconic Edificio España building in January, when Wanda engaged the real estate consultancy JLL, which has not confirmed the operation, to find a buyer.

The Chinese group, controlled by Wang Jianlin, the richest man in China, opened the door to the possible sale of the building after discrepancies arose with the Town Hall of Madrid regarding the renovation of the building. Wanda’s plans, which included the construction of a luxury hotel, a shopping centre and homes, clashed with the demands of the Town Hall, which insisted on the conservation of the front and side façades of the building, as established by the law governing the protection of historical buildings. In any case, Wanda has maintained contact with Madrid’s Town Planning team, in parallel with the sales process, and last met with them on 14 June.

The Chinese group paid Banco Santander €265 million in June 2014 for the building. Now, it is on the verge of selling it for a similar amount.

Wanda’s future divestment of Edificio España comes shortly after the Asian holding company announced its purchase of the UCI Odeon group – which owns the largest cinema chain in Spain.

After several years trying to sell the British Odeon cinema chain to AMC Theatres, Wanda’s subsidiary in the USA, the private equity firm Terra Firma announced the deal on 12 July. The price of that transaction amounts to GBP 921 million (around €1,100 million), of which GBP 407 million relates to the debt held by UCI Odeon, which the buyer will take on.

One of UCI Odeon’s main assets, to be taken over by Dalian Wanda, is the chain Cinesa, which is the largest film company in Spain with 535 screens across the country. In total, the chain owns 2,236 screens in 242 cinemas in Spain, the UK, Italy, Austria, Portugal and Germany. (…).

Original story: Expansión

Translation: Carmel Drake

Wanda Sounds Out Market Re: Sale Of Edificio España

4 February 2016 – Expansión

The Wanda Group has started to sound out the real estate market regarding its possible sale of Edificio España. A priori, the group’s only requirement is that the transaction price be at least equal to the amount the Chinese company paid Banco Santander when it acquired the property in 2014, in other words, €265 million.

However, unless those terms are relaxed, the operation has little chance of success. According to the first round of preliminary conversations, investors with a potential interest in acquiring the skyscraper would be willing to pay between €180 million and €220 million. That amount could increase to €240 million if the Local Heritage Committee changes its mind and allows the demolition of the building’s façades; however, that is unlikely, at least until there is a change in the Government of the Community of Madrid (which chairs and holds a large majority on the board of that body), but in any case, the figures fall well short of the amount set originally by the holding company led by Wang Jianlin.

Although the sale of Edificio España is now its preferred option, Wanda has not yet ruled out the possibility of pushing ahead with the renovation of the property, which would involve the construction of around 300 luxury homes, a 200-room hotel and a five-storey shopping centre, with a budget of €700 million. The last meeting with the representatives of the capital’s Town Hall was held last Wednesday, and the only message to emerge from it was that the company’s spokespeople did not declare that they are planning to abandon the project, despite weeks of speculation to that effect.

There is also a third hypothetical scenario, assuming that the sale of the building does not go ahead and that Wanda rules out the option of renovating the property without demolishing the façades. This option, which Jianlin’s company is currently evaluating, would involve keeping the property in its portfolio for four years, whilst they wait for a change in Madrid’s government, which may result in urban planning actions that would not require it to conserve the skyscraper’s external structure.

Real estate sources indicate that the only option that the Chinese tycoon is not considering is that of abandoning the operation as he does not want to send the message that he has lost money. They also say that Edificio España is still a very attractive asset, thanks not only to its location, but also to the combination of authorised uses (hotel, residential, commercial). (…).

Although the renovation project has not been ruled out completely, the company has now rescinded the contracts that it had signed with several architectural firms and legal advisors in Madrid. It is keeping its sales office open in the hope that it may help the group achieve its goal of transferring the skyscraper to a new owner.

Meanwhile, Grupo Wanda suffered a further setback yesterday, in addition to the huge losses it has experienced on the stock market since the start of the Chinese crisis last summer: the ratings agency Fitch lowered its credit rating to BBB from BBB+, on the basis of lower sales forecasts for 2016 and 2017.

Original story: Expansión (by Luis M. De Ciria, M. Belver and R. Bécares)

Translation: Carmel Drake

Funds Seek Out Dilapidated Buildings For Renovation

24 August 2015 – El Economista

The interest from international funds in Spanish real estate has no limits. These investors are not only looking for iconic buildings and premises right in the centre of Madrid, they are also willing to buy dilapidated residential properties for renovation.

Interest is growing in the acquisition of these kinds of assets in cities such as Madrid and Barcelona, explains Samuel Población, National Director of CBRE Residential. According to the director, these investors, which tend to be international funds of Anglo-Saxon, US and French origin, are willing to pay between €5 million and €25 million to buy properties that need to be fully refurbished. “They spend up to €50 million on a single asset, but there do not tend to be many buildings for that price on the market”, he adds.

The modi operandi of these funds are almost always the same. They form partnerships with Spanish property developers, which contribute a smaller proportion of the capital, but who know the local market and who can streamline the administrative procedures. If a fund has a good business plan, it may generate a return within two and a half year, explains Población.

These investors also purchase properties to demolish them and build new ones in their place; in fact, that is often a cheaper option than a complete refurbishment. In this sense, Población indicates that “the problem they face is that the listing levels (for the protection of buildings) are very high and do not allow developers to demolish buildings and construction new ones. They have to restrict themselves to full refurbishments, preserving elements such as stairways and façades, which drives up the construction costs significantly”.

That is exactly why Población believes that introducing more flexibility in terms of the listing levels of buildings would allow the stock of homes to be refurbished more quickly, since more investors would enter the market. The reality is that Spain needs this type of investment, since around two million homes in the country are in poor conditions and need renovating, according to the figures provided by the Institute for Energy Diversification and Saving (IDAE). These figures place Spain, which has 25 million homes in total, as one of the most obsolete real estate stocks in the European Union.

A real reflection of these numbers has been seen in Madrid this month, where two properties have been demolished due to their poor condition. To avoid these kinds of incidents, Norberto Beirak, a member of the Governing Board of the College of Architects in Madrid, considers that certain protocols need to be established, which must be fulfilled when Technical Inspections of Buildings are carried out (ITE).

“There are no rules governing the procedures for these inspections”, he explains. Moreover, it is typically the buildings’ owners that pay for this service and they tend to commission very basic inspections due to a lack of resources.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake