Commercial Premises on Calle Serrano & Paseo de Gracia are More Expensive Than Ever

28 March 2019 – Expansión

The “golden miles” of Madrid and Barcelona seem to be immune to the consumer crisis and the boom in e-commerce that is negatively affecting other high streets across the country, for the time being at least. In fact, business is booming on Calle Serrano and Paseo de Gracia, driven by demand from large international luxury brands, which are only willing to open their flagship stores on those two streets.

Recent arrivals on Calle Serrano include Salvatore Ferragamo, Bottega Veneta, Saint Laurent and Bang & Olufsen. Meanwhile, the newest tenants on Paseo de Gracia include Moncler, Loro Piana (LVWH), Isabel Marant, Antropologie and Christian Louboutin.

Moreover, demand is driving up rents on those streets. In Barcelona, prices on the golden mile rose by between 5% and 6% in 2018, to €275/m2/month, according to Ascana. In Madrid, the price increase was less marked, up by just 1%, but nevertheless, the average price amounted to €284/m2/month, a new historical record.

Original story: Expansión (by Marisa Anglés)

Translation/Summary: Carmel Drake

Investors Unleash a Buying Frenzy on Madrid & Barcelona’s High Streets

28 August 2018 – Cinco Días

E-commerce is having an unexpected effect in that it is boosting the main high streets of Madrid and Barcelona. A number of operators are opening flagship stores to compete with online sales, whilst at the same time, there is a great deal of interest from investors wanting to acquire these types of properties since they represent assets with high returns.

During the first six months of the year, the main high streets of Madrid and Barcelona sparked a buying frenzy amongst real estate investors. They spent €700 million on the purchase of stores during H1 – that figure was 44% higher than they spent during the whole of 2017, according to the High Street report published by the consultancy firm Savills Aguirre Newman.

In an environment of low returns on other investment alternatives, given the context of low interest rates and enormous liquidity in the market, significant capital flows are being channelled towards property. Within the sector, the high street segment (stores on the most commercial streets) of Madrid and Barcelona are attracting investors.

The yield or return in the best commercial neighbourhoods of Madrid and Barcelona amounts to 3.25%, and in secondary areas, that figure rises to between 4.5% and 4.75% (the better the area, the higher the cost of operations and so the lower the returns). In large towns, the yield on prime stores reaches 4%.

Institutional investors (large real estate and pension funds) have been the most active players, accounting for 76% of all operations, according to Savills Aguirre Newman, with the remaining 24% involving insurance companies, private firms, family offices and Socimis (…).

“Institutional investors continue to focus on the best commercial thoroughfares of the large cities, where the purchase tickets typically exceed €20 million”, says the study. Meanwhile, private investors are more active in opportunities in the cities in which they reside, where they are local experts.

Madrid has accounted for a large number of the operations seen in recent months, with the acquisition by the fund Hines of Preciados 13 (..) and Redevco’s purchase of the Mercado de San Miguel. Meanwhile, AEW bought the Mercado de Fuencarral; Generali acquired Preciados 9; Thor Equities snapped up Gran Vía 30, and M&G Real Estate purchased 68 on the same street. Nevertheless, a lot of the investment this year has been due to one transaction involving a portfolio of Inditex stores, which were acquired by the German fund Deka for €400 million.

For investors, another attractive feature of the Spanish market is the improvement in the rents that tenants are paying, which have clearly risen in recent years since the crisis. Prices on Calle Preciados, for example, have risen from €270/sqm/month two years ago to €277/sqm/month in 2018. Gran Vía has also seen a €10/sqm/month increase to €240/sqm/month, according to data from the consultancy firm.

In Barcelona, prices on the most expensive street in Spain, Portal de L’Angel, have grown by 5.5% during the same period to €285/sqm/month. Nevertheless, prices on Paseo de Gracia are rising the fastest, by 15%, to reach €260/sqm/month (…).

One of the major changes that is being seen is the concentration and opening of large flagship stores in the centre of the two cities through which the operators are seeking to counter the strength of online shopping, by offering what they call a shopping experience (…).

In this vein, as Cinco Días revealed last week, the Chinese technology firm Huawei is going to open a flagship store on Gran Vía 48 in Madrid, in the former C&A store. On the other hand, the Sfera brand, owned by El Corte Inglés, is leaving Gran Vía 30, given that it has recently reorganised its business in the centre of the city to focus on its larger and recently renovated megastore on Calle Preciados.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Bankinter’s Socimi Buys 4 Retail Premises from Inditex for €12.5M

15 June 2018 – Eje Prime

The Galician giant Inditex is continuing to divest some of its real estate assets and the main players in the sector are taking advantage to acquire retail premises on some of the country’s main high streets. Ores, the Socimi owned by Bankinter and the Portuguese firm Sonae, has purchased a package of four assets from the owner of Zara for €12.5 million. The establishments, which together span more than 1,930 m2 are currently leased to the female fashion chain Stradivarius.

Ores Socimi has acquired one store measuring 700 m2 at number 28 Rúa de Urzaiz, in Vigo; another measuring 450 m2 at number 23 on Calle de los Fueros, in Vitoria; a third measuring 430 m2 at number 2 Calle Emilio Arriesta, in Pamplona; and a fourth measuring 350 m2 on the corner of Plaza del Olivar and Calle San Miquel, in Mallorca.

“With this acquisition, financed by available cash held by Ores Socimi, the company is continuing to fulfil the investment objectives set out in its business plan and in accordance with the financial parameters committed to the shareholders”, explain sources at the group.

The purchase of these stores, located on the main high streets of the respective cities, follows another acquisition carried out at the beginning of this month in Madrid. That deal involved an establishment located at number 157 Calle Alcalá, with a surface area of 374 m2, as revealed by Eje Prime. Those premises are currently rented out to the restaurant group Tim Hortons (…).

Ores is aimed at private banking clients. Although its asset portfolio is, for the time being, limited, the Socimi made its debut on the stock market with the aim of investing €400 million in commercial premises on the high street, as well as in supermarkets, retail parks (measuring up to 20,000 m2), bank branches and single assets with long-term rental contracts and solvent tenants.

Bankinter and Sonae Sierra launched this new venture in the real estate sector in record time. The two groups constituted the company on 15 December last year and, in just two months, completed the vehicle creation process, raised sufficient capital to get it moving and made the leap onto the stock market.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Catella Advises Sale Of 2 Retail Premises In Burgos & Cádiz

28 July 2016 – Press Release

The international real estate consultancy Catella has advised a Spanish investment vehicle on the sale of two retail premises, located in Burgos and Cádiz, and leased to Massimo Dutti, Lefties and Desigual.

The premises in Burgos are located on Calle Vitoria, 17, but are also accessible from Calle de la Puebla, 24-26. The asset is located on the best shopping street in the city, home to high profile tenants such as Zara and El Corte Inglés. It has a total surface area of 1,929 sqm, distributed over the ground floor, mezzanine level and basement. And it is leased to the Inditex Group for use by its commercial brands Massimo Dutti and Lefties.

The premises in Cádiz are located on Calle Columela, 23 (pictured above), the main shopping street in the city, alongside brands such as Mango, Zara and Massimo Dutti. The property has a total surface area of 225 sqm distributed over the ground and first floor. It is leased to the fashion chain Desigual, which is going to introduce its new concept soon.

According to Pablo Carvajal, Director of Capital Markets at Catella, “given the absence of products with attractive returns in the prime markets of Madrid and Barcelona, investors are now showing more interest in the best shopping streets in other cities, where they are finding high yields and first-rate tenants”.

About Catella

Catella is a listed international real estate consultancy and a leader in the Europen market. Catella adds value by combining its extensive knowledge of local markets with its own investment bank approach and its great capacity to generate investment opportunities.

Original story: Press Release

Translation: Carmel Drake