CBRE GI Puts Berceo Shopping Centre (Logroño) Up For Sale

25 October 2017 – Expansión

Real estate activity involving shopping centres is proving unstoppable. The fund manager CBRE Global Investors (CBRE GI) has hung the “for sale” sign up over the Berceo shopping centre, located in Logroño (La Rioja) and has engaged the consultancy firm CBRE to look for potential buyers for the asset. The shopping centre, which opened its doors in November 2003, is worth around €105 million, according to explanations provided by market sources to Expansión.

Berceo has a gross leasable area of 34,072 m2 and more than 2,600 parking spaces. The shopping centre recorded sales of €62 million in 2016, up by 9% compared to the previous year, and closed the year with 6.1 million visitors, up by 0.12% YoY. Its tenants include a number of Inditex brands, such as Zara and Pull&Bear, as well as Primark, El Corte Inglés and Media Markt. Moreover, Berceo has a Yelmo cinema and restaurant space with operators such as Foster’s Hollywood and Burger King.

With this operation, the manager is taking advantage of investors’ interest in the retail segment and, specifically, in shopping centres, to finish liquidating the portfolio of assets it inherited as a result of its acquisition of the European business of ING Real Estate, the Dutch bank’s property arm, in 2011.

Real estate investment in shopping centres amounted to a record-breaking €3,700 million in Spain in 2016. So far this year, €2,300 million has been invested in these types of assets.

Divestments

As part of that divestment strategy, CBRE GI sold off the Urbil shopping centre in Guipúzcoa and half of the Asturias Parque Principado shopping centre in 2013 – the other half was owned by Sonae Sierra. A year later, it sold Gran Vía de Vigo, Moraleja Green and Alcalá Magna, the latter two are located in Madrid.

In parallel, CBRE GI has been very active on the buy-side in recent months. Specifically, in May, the company acquired 70% of the H2O Rivas shopping centre – located in Rivas-Vaciamadrid (Madrid)– from Alpha Real Trust, which retained the remaining 30% stake. Beyond the shopping centre sector, in September, the manager teamed up with AXA IM Real Assets to purchase the student hall of residence company Grupo Resa.

The manager has approximately €3,100 million in assets under management in Spain and Portugal. Twenty of those assets are shopping centres.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Lar España Raises Valuation Of Its Asset Portfolio By 20%

10 July 2017 – Expansión

After several years creating large asset portfolios, the Socimis are now immersed in the management of their portfolios. Lar España, the listed real estate investment company created by the real estate company Grupo Lar, was the first of the four largest Socimis to debut on the stock market, in March 2014, and it made its debut without any assets on its balance sheet. Three years later, the company now owns a portfolio worth €1,448.2 million, according to a statement released last week.

That figure is 20% higher than the price that Lar España paid for those assets, in other words, the Socimi has increased the value of its properties by €235 million through its management. “The increase reached at the end of this year is particularly significant – if we compare the figures with those seen at the end of June 2016, the values have risen by 9.3%”, said the company.

Type of assets

The €1,500 million in assets owned by Lar España include, above all, shopping centres, with 16 assets worth more than €1,000 million, up by 15.2% compared to their collective purchase price. In recent months, the Socimi in which the fund manager Pimco holds a stake has invested €255 million in the purchase of two shopping centres, Parque Abadía in Toledo and Gran Vía de Vigo, as well as in 22 other retail premises throughout Spain.

In the case of the office portfolio (the Socimi owns five office buildings), its value has increased by more than 27% to €178.6 million, whilst its logistics properties have appreciated in value by 31.6% to €83.3 million.

Nevertheless, the highest increases in value were recorded by the Socimi’s projects under construction: four in-progress developments are now worth €145.4 million, up by 40%. The most noteworthy of these is the Lagasca 99 development. In January 2015, Lar España decided to make an exception to its strategy of investing in rental assets by acquiring a residential plot in the neighbourhood of Salamanca in Madrid. To this end, it invested €100 million, together with Pimco, on the purchase of a plot of land with a buildability of 26,000 m2. More than half of the 55 homes on that site have already been sold.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Deutsche Bank Negotiates Sale Of Gran Vía Alicante

30 April 2017 – Expansión

The real estate market for shopping centres is unrelenting. In the latest deal, Deutsche Bank has hung the “for sale” sign up over Gran Vía Alicante. The German entity’s real estate division, RREEF, which has engaged the real estate consultancy firm JLL to sell this shopping centre, has already received several offers for the asset.

Whilst the operation has not been closed yet, one of the players lining itself up as a candidate to take over the shopping centre is the British fund Europa Capital.

Moreover, one of the other investors interested in the asset is a consortium formed by Eurofund Capital Partners and Patron Capital and Carmila, the real estate subsidiary owned by Carrefour, according to market sources, which value the asset at just over €50 million.

The centre has a retail surface area of 37,300 m2, however, that figure includes a hypermarket owned by Carrefour, measuring 17,050 m2, which falls outside of the perimeter of this transaction.

Specifically, the retail space for sale, which has a gross leasable area of more than 20,200 m2, contains around 80 stores distributed over three floors, as well as an underground car park with 1,600 spaces.

Tenants

The shopping centre, inaugurated in November 1998 and renovated in 2012, received almost 5.3 million visitors last year and has an occupancy rate of 95% of its gross leasable area.

The shopping centre’s main tenants include brands such as Primark, H&M, Lefties, Massimo Dutti, Pull & Bear, Juguettos, Calzedonia, Natura and Fosters Hollywood, amongst others.

Gran Vía de Alicante, located on Calle José García Sellés, competes with Plaza Mar 2, the largest shopping centre in the town, spanning 43,600 m2.

In addition, other nearby shopping centres include Parque Vistahermosa, measuring 34,000 m2, San Vicente Outlet Park, measuring 36,500 m2 and Puerta de Alicante, measuring 34,500 m2.

Investment

Shopping centres are one of the real estate assets that have sparked the most interest amongst investors in recent years.

In 2016 alone, more than €3,700 million was invested in this segment, which constituted the second largest market in the real estate sector after the office segment.

The main operations closed last year included the sale of Diagonal Mar (Barcelona), which was acquired by Deutsche Bank from Northwood in August for €495 million, and the sale of Gran Vía de Vigo, which the Socimi Lar España acquired from Oaktree for €145 million.

So far in 2017, another mega-operation has been closed with the British fund Intu’s acquiring the Xanadú shopping centre (Arroyomolinos, Madrid) for €530 million from Ivanhoé Cambridge.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

JLL: RE Inv’t Amounted To €8,757M In 2016

13 January 2017 – Expansión

Between January and December, investors spent €8,757 million buying tertiary assets, according to data from the real estate consultancy JLL. This figure is the second highest in the last decade, and is €650 million below the volume of sales and purchases recorded in 2015. That was the year when the invasion of international funds into Spain and the consolidation of the Socimis took the real estate market to figures never seen before, with a volume of investment upwards of €9,400 million.

But, unlike the previous year, 2016 saw the rise of commercial assets (primarily, shopping centres and high street premises) to lead the ranking in terms of real estate investment by segment, accounting for almost €3,000 million (€2,977 million, according to JLL) compared to €2,806 million spent on offices.

Two operations, the purchase of Torre Foster by Amancio Ortega, for €490 million and Merlin’s acquisition of Parque Adequa for €380 million, boosted the investment figure in the office segment, which, although hasn’t completely lost its appeal for buyers, has been relegated to second place due to a shortage of available prime space. (…).

Funds are selling off assets

The opposite is happening in the case of large commercial establishments. International funds’ interest in selling the properties that they bought during the crisis led to a boom in major operations last year, including the sale of the Diagonal Mar shopping centre by Northwood, which was acquired by one of Deutsche Bank’s real estate funds for €493 million; and the sale of Gran Vía de Vigo, for which the Socimi Lar España paid the fund Oaktree €145 million. (…).

In the case of hotels, despite significant one-off sales, such as the operation involving Hotel Villamagna, which was acquired by the Turkish group Dogus for €180 million, overall the investment volume fell from €2,739 million in 2015 to €2,155 million last year. Even so, the figure for 2016 exceeds the investment volume recorded in 2006, which previously held the record, when hotel sales amounted to €1,600 million (out of a total non-residential investment volume of €8,482 million).

Although commercial properties led the ranking as the preferred asset for investors, logistics assets also performed very well. Between January and December, €819 million was invested in logistics warehouses, platforms and centres, according to JLL. This figure practically doubles the purchases completed in 2015, when investors disbursed €434 million on these types of properties, according to the consultancy.

The key behind this success is due to the fact that logistics assets still offer high returns, compared with other properties, such as offices and shopping centres, which have lost some of their investment appeal, due to the high degree of interest in these assets in Spain.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Deloitte: 29 Shopping Centres Worth €1,531M Are Up For Sale

13 December 2016 – Expansión

Between January and October, investors spent €3,028 million buying shopping centres in Spain. That is a historical figure, which pulverises the volume registered in previous years. For example: in 2015, a record year in terms of real estate investment, investors spent 60% less on shopping centres than they did during the first ten months of 2016.

And this strong performance in the retail investment market looks set to continue, given that 29 more properties, with a combined value of €1,531 million, are expected to be sold during the final stretch of the year, according to Deloitte. (…) Of those, four have already changed hands, specifically, the outlet centres located in San Sebastián de los Reyes, Las Rozas and Getafe, which the joint venture owned by Nienver and Tiaa purchased on 23 November, as part of a wider European portfolio that also included three other centres in Italy and Poland, worth €700 million in total. Moreover, the same partnership completed the acquisition of the Nassica shopping centre in Getafe on the same day.

And these are not the only shopping centres that will be changing hands over the next few months, given that other new assets are expected to come onto the market next year, including the Madrid Xanadú shopping centre in Arroyomolinos.

In total, forecasts indicate that transactions amounting to almost €2,000 million (specifically, €1,932 million) will be closed in 2017, with another €604 million worth of shopping centres expected to be sold in 2018, according to sources at the professional services firm.

Gains

Most of the shopping centres that will have new owners over the next 18 months belong to overseas funds that bought these assets before the recovery of the sector, and which now have the opportunity to unwind their investments with significant gains just a few years after they bought them. “The decrease in the risk premium and the recovery in consumption are some of the reasons behind the 16% appreciation in this type of asset over the last 12 months”, said Javier García-Mateo, Financial Advisory Partner at Deloitte.

In fact, we have already seen operations of this kind in 2016, such as the sale of the Gran Vía de Vigo shopping centre, which the fund Oaktree sold in the summer to the Socimi Lar España for €145 million. The US fund had acquired the centre two years earlier for €115 million. (…). Meanwhile, Northwood sold Diagonal Mar for €495 million after buying it two years ago for around €150 million.

“Above all, the buyers of the shopping centres that will come up for sale in the short term will be core and core plus funds, which will take over from the more opportunist (distress) investors, which made their purchases during the previous period”, said García-Mateo. In this way, transactions amounting to €4,067 million are expected to be closed over the next two years; more than €1,200 million will be invested by institutional funds, insurance companies, and more risk-averse investors, followed by core plus investors, which will account for almost 40% of the total investment volume, compared with €108 million that opportunist funds are expected to invest in shopping centres, according to Deloitte.

Financing

Along with the improvement in the Spanish economy, another question that will help this investment volume will be the better access to financing for this kind of operation.

In this sense, more than 55% of the €4,067 million that is expected to be invested in shopping centres between now and 2018 will benefit from financing, for more than 50% of the total asset value, compared with 16% that will not be financed by any kind of loan.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

C&W: RE Inv’t Amounts To €5,500M During YTD Sept 16

30 November 2016 – Expansión

Change in the trend / Investment fell by 25% during the first nine months of the year, excluding Merlin’s purchase of Metrovacesa’s assets.

During the first nine months of 2016, real estate investment in Spain (excluding the purchase of residential and corporate assets) amounted to €5,500 million, down by 25% compared to the same period last year, but in line with the first three quarters of 2014.

If we include Merlin’s integration of Metrovacesa’s assets, this figure increases by €1,000 million, explain sources at the consultancy firm Cushman & Wakefield (C&W) in their latest report.

By type of buyer, international funds lead the investor ranking, accounting for 57% of all investment, however, Spanish firms, led by the Socimis and in some cases privately owned firms such as Pontegadea, are starting to bring domestic capital into line with overseas capital as we head into the final month of the year. In 2015, domestic buyers accounted for 57% of all operations.

The decrease in investment volumes in 2016 is explained by a reduction in purchases during the first six months of the year, given that, during the third quarter, several large operations have been signed, including the acquisition of the Diagonal Mar shopping centre in Barcelona, by Deutsche Bank’s real estate fund, which paid €495 million for the property; and Torre Foster, which was acquired by Amancio Ortega’s real estate company (Pontegadea) for €490 million.

Excluding these operations, the average volume per acquisition has decreased this year, from €55 million to €40 million, say sources at Cushman & Wakefield (C&W). The average over the last decade stands at €50 million.

Shopping centres

By type of asset, the large shopping establishments (centres, retail parks and flagship stores) have been the stars of the investment market so far in 2016, accounting for 44% of the total, according to the report. In this way, in addition to Diagonal Mar, the following establishments have changed hands: the ABC Serrano in Madrid and the Gran Vía in Vigo. “Investment in retail in Spain is much more oriented towards foreign capital, above all, in the case of shopping centres”, say sources at the consultancy firm.

Meanwhile, offices have accounted for 25% of the total investment volume, compared with 30% on average over the last ten years.

Purchases of logistics assets are recovering well, thanks to the high returns that they now offer compared to other types of properties, whose returns have started to decrease due to high demand. One of the most important operations of the year saw the fund CBRE Global Investors purchase 16 logistics centres from Metrovacesa.

By location, Madrid maintained its position as the leading destination for real estate investment in Spain, accounting for 30% of the total.

After a strong third quarter, the forecast for the end of the year is positive, but lower than the figure recorded in 2015. “We estimate a total spend of around €8,000 million for the full year (excluding Metrovacesa’s office portfolio, worth €1,000 million), compared with €8,600 million last year”, say C&W.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Deloitte Is The Leading Advisor Of Shopping Centre Deals

20 October 2016 – Expansión

The Big Four are positioning themselves as major players in the market to advise real estate operations and are gaining ground in a segment that has been dominated by other players until now. The professional services firms are looking for new business niches in order to generate returns and strengthen their audit businesses, which generate significant recurring income for their balance sheets, but which are now mature markets, with limited margin for growth.

This effort has led the Big Four to dominate the transaction advisory sector and, in the case of Deloitte, it has managed to gain a foothold in the market that has been particularly dominated by real estate consultancy firms until now: the shopping centre segment.

Specifically, the company chaired by Fernando Ruiz now leads the ranking after participating in almost half of the major operations closed in 2016 to date. So far this year, transactions amounting to almost €2,000 million have been signed in the shopping centre segment, which has become one of the star products of the real state market, boosted by the economic recovery and improvement in consumption.

In this growing market, which still has further potential for growth, Deloitte has earned its place as an advisor of choice. Specifically, the professional services firm achieved a market share of more than 50% of the transaction volume, outperforming CBRE, with 32%, PwC, with 7% and JLL and Savills, with 4% each.

Deloitte participated alongside CBRE in the largest operation of the year so far in the shopping centre segment: Diagonal Mar (Barcelona). The asset was acquired by Deustche Bank from Northwood over the summer for almost €500 million. Deloitte advised the buyer whilst CBRE advised the seller.

The professional services firm has also advised Carrefour on its purchase of 36 supermarkets from Eroski for €205 million and TPG’s acquisition of the L’Aljub shopping centre in Elche (Alicante) for €100 million. Another major operation closed this year in this segment involved the Gran Via de Vigo shopping centre, which was acquired by Lar España in a deal advised by another Big Four firm, PwC.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Lar España Plans To Invest At Least €240M In 2017

7 October 2016 – Expansión

Lar España has the capacity to invest at least €240 million in 2017, according to comments made by the Socimi in a presentation to analysts.

The company will also have a further €300 million available from the possible sale of its non-commercial assets between 2017 and 2018, meaning that it will not have to resort to the market or to a capital increase to raise funding. Lar, like all of the other Socimis, is obliged to rent out its assets for at least three years. After that period, the firm may divest its properties to release cash to make new purchases.

Lar explained to the market that the luxury housing development Lagasca 99, located in the heart of the Salamanca neighbourhood in Madrid, will be ready for sale during the first quarter of 2018. Similarly, the firm owns several non-commercial assets, specifically offices in Madrid (Egeo, Arturo Soria, Torre Spínola and Eloy Gonzalo) and Barcelona.

In July, the Socimi completed a capital increase amounting to €147 million. A month and a half later, it signed the purchase of the Gran Vía de Vigo shopping centre for €141 million. At the time, the company reported that, including that asset, it had identified opportunities in the market amounting to €838.5 million.

The value of the almost 25 real estate assets in the group’s portfolio amounts to €1,191 million, according to the latest available valuations. Of that figure, 76% relates to retail and commercial development assets, 13% are offices, 6% are logistics assets and 5% are residential properties.

Lar España, which is managed exclusively by the Lar Group, has indicated that it plans to reduce its management fees by adopting a new policy. The group also said that it plans to launch value adding initiatives aimed at increasing the appeal of its assets and improving their occupancy rates and rents.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

CBRE: RE Inv’t Amounted To €6,191M In YTD Sept 2016

3 October 2016 – Expansión

After two years of record breaking figures, the Spanish real estate sector is heading into the final stretch of the year with more modest forecasts. According to a report prepared by the real estate consultancy CBRE, investors spent €6,191 million buying real estate assets during the first nine months of 2016. That figure represents a 21% decrease compared to last year and is 11% lower than the level recorded during the same period in 2014.

Nevertheless, the amount has been very well received in the sector, given that the last two years have been regarded as “exceptional”. “The trend is still very strong, investors are still putting their faith in the Spanish real estate sector, given the lack of other types of alternative investment options and because real estate in the rest of Europe is very expensive”, said Lola Martínez, Director of Research at CBRE.

This optimism is reflected in the forecasts for the year end close, which are expected to amount to between €8,500 million and €9,000 million. “If we exclude the value of Metrovacesa’s assets to be included in the upcoming merger with Merlin, the year will close in line with the forecasts, thanks to several large-scale operations that are expected to be signed during the last quarter”, said sources at the consultancy firm.

Operations in the pipeline

In this sense, they highlighted Amancio Ortega’s purchase of Torre Cepsa on Friday for €490 million; the sale of the Adequa business park in Las Tablas (Madrid), which the Socimi Merlin will acquire in December for €380 million; and the sale of Edificio España, which the Murcian group Baraka, led by Trinitario Casanova, is due to sign on 15 October, for around €272 million.

Alongside them, experts expect El Corte Inglés to close the sale of its logistics portfolio for between €250 million and €300 million and for Gas Natural to sell several corporate buildings and remain as the tenant (in an operation known as sale & leaseback) for another €200 million.

These five operations alone amount to more than €1,500 million. “If we add up only the transactions that have already been announced, then we reach the forecast figure; and other deals may come up – there is always activity during the final quarter of the year”, said Martínez.

By type of property, commercial assets have taken over the number 1 spot from offices, which traditionally accounted for most of the investment in Spain. “The sales of Adequa and Torre Cepsa mean that the office market is going to make a come back. Nevertheless, we have just had two years of madness, with the Socimis proving themselves to be particularly active in 2015; now, there are fewer products, and prices are not as attractive for the experts”.

In the case of shopping centres, forecast indicate a slightly lower volume than recorded in 2015, despite the signing of major operations such as the purchase of Diagonal Mar in Barcelona, for around €500 million by Deutsche Bank and the acquisition by the Socimi Lar of Gran Vía de Vigo for €141 million.

In the case of the logistics business, “until the first half of the year, it was the best performing segment compared with 2015, but, it lost strength to the commercial segment during the third quarter. Nevertheless, operations such as the sale by El Corte Inglés will help it recover”.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Lar Buys Gran Vía de Vigo Shopping Centre For €141M

8 July 2016 – Expansión

The Socimi Lar España is strengthening its position in the shopping centre market. The company has reached an agreement with the investment firm Oaktree to acquire the Gran Vía de Vigo shopping centre for €141 million. The deal is expected to be signed in Q4 2016.

Gran Vía de Vigo was acquired by Oaktree in 2014 for €115 million. This is the second purchase that Lar has made from the US fund in less than a year, after the Socimi bought the Megapark Barakaldo shopping centre in Vizcaya last October for €170 million.

The shopping centre – one of the largest in Galicia, along with Marineda City, in A Coruña – has a retail area of 41,246 sqm. The centre, opened in June 2006, spans three floors dedicated to retail space and another three for parking, with capacity for more than 1,700 cars.

Capital increase

In order to raise finance, the company has launched a capital increase amounting to €47 million through the issue of 30 million new shares with a subscription value of €4.92.

The company will use these funds to expand its current portfolio of assets. Specifically, Lar has identified investment opportunities in the market amounting to €838.5 million in total, including this shopping centre. 81% of those assets under analysis are shopping centres, 14% are offices and the remaining 5% are other types of properties.

The capital increase will be performed with subscription rights. The company indicates that, just like happened a year ago in its previous capital increase, a “solid base” of the existing shareholders have expressed their intention to execute those rights. The company’s main shareholders include the Spanish (fund) manager Bestinver, controlled by the Entrecanales family, as well as international funds, such as Pimco, BlackRock and Franklin Templeton.

JP Morgan and Morgan Stanley are acting as coordinating entities and they have underwritten the capital increase, together with Fidentiis.

The Chairman of Lar España, José Luis del Valle, indicated that this increase reflects “the strength and attractiveness” of the Socimi and adds value to its capacity to go to the capital markets with guarantees of success.

Lar España owns assets worth €1,003 million in total. Of those, €728 million corresponds to the acquisition of 13 retail spaces (shopping centres) in Madrid, Valencia, Sevilla, Alicante, Cantabria, Lugo, León, Vizcaya, Navarra, Guipúzcoa, Palencia, Albacete and Barcelona; €150 million relates to four office buildings in Madrid and one in Barcelona; €70 million corresponds to four logistics assets in Guadalajara and one in Valencia; and €55 million relates to a residential property on Calle Lagasca, 99 (Madrid).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake