Barcelona From The Sky: 123 Cranes At Work In The Catalan Capital

7 November 2017 – Eje Prime

Cranes and new projects are drawing a new real estate business in Spain once again. According to the study Barcelona from the sky, compiled by the real estate consultancy CBRE, the Catalan capital has 187 projects underway, requiring 123 cranes altogether. Of the total number, 75% are dedicated to residential projects and 17% to tertiary projects, whilst 8% of the cranes are being used for other kinds of projects, according to the report.

By sector, the residential market is the most active in Barcelona with 107 new build projects and 34 refurbishment projects currently underway or due to start imminently. In total, the Catalan capital is currently decorated with 77 cranes working on the construction of new residential developments, led by the largest Spanish property developers, such as Neinor and Aedas, as well as some more local players, such as La Llave de Oro and Nuñez I Navarro.

Cuitat Vella and Eixample are the districts where the most refurbishment projects are being carried out, due to the age of the housing stock there. There are eight projects (24% of the total) and eleven projects (32%) underway in those neighbourhoods, respectively. Many of these renovation projects, especially those closest to the city’s nerve centre, such as along Passeig de Gràcia and Plaça Catalunya, are high standing affairs, such as the refurbishment of Casa Burés, located at number 2 Calle Girona.

In terms of new build homes, the districts of Sarria-Sant Gervassi, Horta-Guinardo, Eixample and Sant Andreu are leading the ranking, with 18, 15, 12 and 11 new build projects, respectively (…).

The tertiary sector is also building 

(…). In the office segment, there are twelve projects underway after several years of little construction activity due to the economic crisis, in general, and in the office sector, in particular.

“The greatest number of projects, both new build and renovations, are concentrated in the 22@ area, in the district of Sant Martí, where key projects include the future Parc Glòries and the Luxa Business Park, amongst others”, according to the study (…).

Several projects are also underway in the Sants-Montjüic area, including the construction of the Campus Administratiu, which the Generalitat de Catalunya will occupy and Can Batlló, very close to Plaça Cerdà. In addition, construction work is expected to start at the beginning of 2018 on the construction of the remaining two towers that form part of the Barcelona Fira District project, owned by Iberdrola (…).

In the retail segment, four renovation projects are underway in the Catalan capital, whilst one new space is being constructed, with the development of the Finestrelles shopping centre in Esplugues de Llobregat, which will open its doors at the end of 2018. This project is being executed by the Belgian property developer Equilis and has a gross leasable area of 25,700 m2.

Moreover, renovations are being carried out on several of the city’s main shopping streets, such as Las Ramblas, Fontanella and Paseo de Gracia, as well as in some of the large retail spaces such as the Glòries Shopping Centre.

Hotels and others 

“More than two years have now passed since the implementation of the hotel moratorium, which has negatively affected the number of hotel developments”, says CBRE’s study. Nevertheless, the construction of new hotels has not stopped in Barcelona, given that some players obtained their building permits in time. There are currently fourteen projects underway, with six cranes working on them in total (…).

According to CBRE, a small number of the projects currently being carried out in the city do not form part of the residential or tertiary sectors. Fifteen projects are underway at the moment involving twenty cranes to build or renovate parks, churches, schools, gyms, infrastructure work and nursing homes.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Hines Finalises Purchase Of Popular’s HQ In Barcelona

3 February 2017 – Expansión

Banco Popular’s headquarters on Paseo de Gràcia in Barcelona is about to change hands, in one of the first major operations of the year in the real estate sector in the Catalan capital.

The US company Hines is holding advanced negotiations to acquire the building, in a process that has been well attended by other players in the sector. The contract between the current owner and Hines will be signed within the next few days. The 6-storey property, which has a surface area of 4,000 m2, was constructed at the beginning of the 1960s and is home to Banco Popular’s headquarters in the city, as well as to its regional head office.

According to sources in the sector, the real estate company Hines – which was one of the finalists in the bid for Edificio España in Madrid – will pay around €80 million for Popular’s headquarters in Barcelona.

The building, located at number 11 on Paseo de Gràcia, next to the Barcelona Stock Exchange, came onto the market months ago, during one of the most tumultuous years in the bank’s history, which also coincided with the reactivation of the real estate sector, especially the in the major cities, such as Madrid and Barcelona.

Commercial use

According to various sources, Hines plans to convert the bank’s Barcelona headquarters into a building that can be used for commercial purposes. Its location, on Paseo de Gràcia and very close to Gran Via de les Corts Catalanes, makes it ideal for conversion into a flagship megastore for a major fashion brand. In fact, the Swedish fashion chain H&M will open one of its largest stores in the world in the Generali Building today, which is on the other side of Gran Via, and just opposite, is one of the largest Zara stores in Spain. Moreover, at the intersection of Paseo de Gràcia and Gran Via, the Japanese brand Uniqlo is continuing work to open a huge store, its first in the Spanish market.

The possibility of converting Popular’s headquarters into a hotel has been ruled out following the approval of the tourist accommodation plan by the Town Hall of Barcelona – preceded by a long moratorium -, which prevents the construction of new hotel establishments in the centre of the city.

Some sources indicate that Popular has a year to vacate its current headquarters. The bank could move its main office in Barcelona to another site on the same street, on the corner with Calle Aragón, to the lower floors of the building where Banco Pastor used to house its regional head office in Cataluña.

Original story: Expansión (by R. Ruiz and J. Orihuel)

Translation: Carmel Drake

Merlin Buys Torre Agbar In Barcelona For €142M

13 January 2017 – Cinco Días

The company General Aguas de Barcelona has sold Torre Agbar to Merlin Properties for €142 million. As such, the project announced by Emin Capital in 2013 to convert the property into a luxury hotel has been abandoned, given the difficulties involved. In theory, the plan was for a hotel to be opened there and managed by Hyatt, but the hotel moratorium imposed by the mayoress Ada Colau made that project impossible, according to sources at the fund.

In the end, Merlin pipped the Andorran investor group Emin at the post and purchased the iconic skyscraper, which will be used for office space. As such, the Socimi will not need to request any change in its designated use. Meanwhile, yesterday, Emin asked the Town Hall of Barcelona to cancel the request it had filed to change the designated use of the building to allow it to open a hotel.

Located at number 211 on Avenida Diagonal, the building designed by Jean Nouvel has become a symbol of the city and marks the entrance to Barcelona’s technological district, 22@. The pace of activity in the office market in the district has caused the number of operations to double in the last two years, establishing it as the city’s business hub.

At 142 m, Torre Agbar is the third tallest building in the city and has a gross leasable area of 37,614m2, spread over 34 floors and an auditorium with capacity for more than 350 people. In addition, it has 300 parking spaces on four underground floors and until July 2015, it housed the headquarters of Aguas de Barcelona.

Merlin – listed on the Ibex 35 – is the largest Socimi in Spain. It has a portfolio of assets worth €9,600 million, following its acquisition of Testa from Sacyr and the integration of Metrovacesa’s portfolio of commercial properties. Its main shareholders include Santander and BBVA, as well as international funds.

The company, led by Ismael Clemente, sold 19 hotels to Foncière des Regions for €535 million at the end of December, given that that type of property does not form part of its strategy. It has announced that it will allocate the resources raised to reducing its debt and to possible acquisitions. It also revealed that it wants to grow its presence in Barcelona, which accounts for just 13% of the value of its portfolio. On this occasion, it has been advised by Savills. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz and Laura Salces)

Translation: Carmel Drake

Benson Elliot Buys Hotel Silken In Barcelona For €80M

7 October 2016 – Expansión

A major operation and better gains for Bank of America Merril Lynch in Barcelona. The US entity is finalising the sale of Hotel Silken Diagonal for €80 million to a group of investors led by the British fund Benson Elliot. Bank of America will generate capital gains of €50 million from the property in just one year, given that it took over the hotel in 2015 when it foreclosed the debt relating to the property, amounting to €27 million.

According to sources close to the operation, the sale has not been signed yet, although the vendor has entered into an exclusivity period with the purchaser group.

Bank of America Merril Lynch ended up with the mortgage loan following the crisis of the Urvasco group, the parent company of the Silken hotel chain, after it filed for bankruptcy.

The property has 240 rooms and a four-star rating. It is located in the 22@ district of Barcelona, next to the Torre Agbar, and it has a management contract with Silken. The operation has been advised by JLL, which declined to comment on the operation yesterday.

The amount (€80 million) that Benson Elliot has paid together with another investor group, whose name has not been revealed, has been described as exorbitant by several sources in the real estate sector, who point out that the building is located away from the city centre in Barcelona, in an area that suffered a lot at the beginning of the crisis.

Nevertheless, the same sources also indicate that the hotel moratorium applied in Barcelona last year by the mayoress Ada Colau, together with the strong investor appetite for assets in the Catalan capital and the shortage of buildings on the market, have driven up the price of the few properties that have come onto the market. Bank of America put this asset on the market a few months ago and several international investors submitted bids for it.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

French Chain B&B Opens 4 Hotels In Spain

8 July 2016 – Expansión

The French hotel chain B&B, one of the largest in Europe with a network of 321 establishments and annual revenues of €344 million, has started to expand its business into Spain. A few months ago, it opened its first four hotels here, all of which used to be owned by the Holiday Inn, in Valencia, Madrid, Alicante and Gerona, for a total investment of €14 million. It plans to open at least four hotels a year between now and 2020, with an average investment of around €5 million per property, which represents a total investment of approximately €80 million over the period.

The next hotel opening will be in Vigo, planned for December. B&B, which was acquired by PAI Partners in December, is establishing itself under two systems: the construction of buildings and the acquisition of existing hotels. The four Spanish hotels, which used to house Holiday Inns, were acquired and then transferred to the firm Foncier des Murs, owned by the Crédit Agricole group, which is the company’s financial partner for these types of investments and which itself owns 250 hotels that B&B operates.

The hotel in Vigo will follow the same pattern; meanwhile the company is looking for other opportunities to buy and construct hotels. The Director of B&B in Spain, Dennis Darrien, explained that the company has plans to construct one hotel in Barcelona, in the 22@ district, but that those plans are on hold due to the hotel moratorium established by the Town Hall.

The company is looking for hotels with between 80 and 150 rooms, in good locations.

B&B was created in 1990, as a chain for business travellers in France – where it now has 250 hotels, some of which it owns and others which it leases – with low cost prices. The CEO of the Group, George Sampeur, explained that in Spain they will also target the tourist market, given the nature of the country.

The company has eighty hotels in Germany, twenty-three in Italy, three in Poland, one in the Czech Republic and another in Morocco. It plans to expand to Latin America by opening its first hotel in Brazil, in Sao Paulo, before continuing to Curitiba and other areas in the south of the country.

In total, according to its business plan, B&B plans to open thirty hotels a year between now and 2020.

Original story: Expansión (by J. Brines)

Translation: Carmel Drake

ECI Sells Building On Plaza Catalunya For €17M

9 February 2016 – Expansión

The department store group has ruled out the expansion of its store on Plaza Catalunya because it has been unable to buy the building next door and so it has sold its property on Calle Fontanella, number 9.

El Corte Inglés has abandoned its expansion plans for Plaza Catalunya. The building that the department store group acquired in 2004 on Calle Fontanella, with the aim of extending its store, has been sold for €17 million to a Russian investor who plans to convert it into a hotel.

The property, which has not been used for more than a decade, is located at number 9, Calle Fontanella and is separated from El Corte Inglés store on Plaza Catalunya by another building. The group chaired by Dimas Gimeno acquired it thinking that it would also be able to buy the property located at numbers 5-7 and adjoin the two buildings onto its department store. Nevertheless, following years of negotiations with the owner (then CatalunyaCaixa), the building was eventually acquired by Caboel, the property company of the former owners of Caprabo, who renovated it and converted into a hotel operated by Room Mate.

The location of this El Corte Inglés store, in the heart of Plaza Catalunya, means that it can only be expanded through the purchase of neighbouring properties. The expansion project began to take shape more than ten years ago, thanks to Catalunya’s Commercial Facilities Sector Territorial Plan for the period 2006-2009, which allowed it to increase its net sales area by 5,000 m2.

The building at number 9, Calle Fontanella was acquired from Banco Sabadell for €17 million, which means that, a decade later, and given the impossibility of adjoining it onto its existing store, the department store group has recovered its original spend.

The purchaser of the building is a conglomerate of investors, which, according to real estate sources, are Russian and intend to convert the property into a hotel.

Its surface area (3,200 m2), wide façade and central location make the conversion of the property into a tourist establishment an ideal option, but the operation has been signed in the middle of the hotel moratorium. As such, the investors will have to wait until the mayoress of Barcelona, Ada Colau, establishes the new urban planning rules for tourist accommodation, which will determine the neighbourhoods in which new establishments may be constructed.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

JLL: 3 Large Funds Want To Buy Student Halls In Spain

29 March 2016 – El Economista

Investment funds have been buying real estate in Spain for years and during that time they have acquired the best hotels, skyscrapers and shopping centres in the market. Now that those assets are no longer offering such high returns, investors are starting to look at alternative assets, including student halls of residences.

The US fund Oaktree, through the company Knightsbridge Student Housing, Round Hill Capital and The Student Hotel (TSH) are just some of the players that are currently looking for investment opportunities in this sector, according to Nick Wride, Director of Alternative Investments at JLL.

“For the best assets in operation, yields should be between 6% and 6.5% for the best locations”, says Wride, who recalls that these properties have to generate a higher spread than residential products, because they require more management”. The user is more demanding, there is more rotation and, in many cases, in addition to accommodation, these sites also provide catering services”.

Currently, Knightsbridge Student Housing is the most active firm in Spain. “They saw the opportunity before anyone else and they have led the way for other investors, who are now showing a great deal of interest in these types of assets in the country” explains Wride.

The firm owned by Oaktree currently owns one hall of residence in Madrid with 370 rooms, namely the Galdós hall, located in the Ciudad Universitaria.

At the end of last year, it acquired the Sucesores de Rivadeneira print works, which used to house the former printing press of the Gaceta de Madrid, located on the Cuesta de San Vicente, in the centre of the capital. The project, which will have 350 rooms, has not been started yet but is expected to become operational for the 2018/2019 academic year.

The manager is also preparing to open halls of residences in La Plaza de Cristo Rey (El Faro) and Calle de San Bernardo (Claraval), with 550 rooms, next year and is working on a 500-room project in the historical centre of Alcalá de Henares, which is due to be completed between 2017 and 2018.

The group also has a presence in Barcelona, where it was awarded two concessions by the Administration. Nevertheless, both projects have been suspected due to the hotel moratorium imposed by the mayoress, Ada Colau. (…).

Operation in Barcelona

The Student Hotel, the platform that was acquired by the US fund manager Perella at the end of 2014, is the other firm specialising in the sector that is looking for more projects in Spain. Last year, it participated in an important transaction in Barcelona, where it acquired a portfolio of two halls of residences in the Melon District (Poble-Sec and Marina). Both had belonged to BBVA and contain 597 rooms and 152 parking spaces, as well as around 3,465m2 of adjoining restaurant space in different areas of each building.

According to sources at the time, that operation amounted to almost €45 million. (…).

On the other hand, Nick Wride says that Round Hill Capital is also interested in investing in the country. “They have not made any purchases here yet or developed any projects for students in Spain, but they are looking actively”.

That firm starred in one of the most significant transactions at the European level last year when it sold The Nido Collection to the US firm Greystar Real Estate Partners for €847 million. (…).

Expectation and competition

(…). Nevertheless, halls of residence in Spain often do not comply with the criteria that these investors are looking for. “Funds have to justify movement of capital into a country with large projects, those containing at least 200 rooms. The typical halls found here tend to be smaller and many have double rooms. Now, the trend is increasingly moving towards individual rooms”, says Wride. (…).

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Only 12,000 More Hotel Beds May Be “Opened” In Barcelona

11 March 2016 – Expansión

Yesterday, the government of the mayoress, Ada Colau, approved the Special Urban Plan for Tourist Accommodation (Peuat), which will prohibit the opening of more tourist apartments in Barcelona; will limit the opening of new hotels to areas beyond the centre of the Catalan capital; and will allow the “opening” of just 12,000 more (hotel) beds across the city as a whole.

According to the Town Hall, the objective of this indefinite moratorium (which will be reviewed every six years) is to put an end to the problems caused by tourist congestion in the centre of Barcelona and the difficult coexistence of tourist apartments and conventional homes. The regulations will be implemented by area, and the centre of Barcelona will face the greatest restrictions. The legislation will be more relaxed the further away from the centre you go.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Núñez’s Complaint Against Colau’s Moratorium Deemed Admissible

7 October 2015 – Orbyt

The High Court of Justice in Cataluña has declared admissible a complaint filed by the construction company Núñez y Navarro against the Town Hall of Barcelona. Specifically, the company has denounced the moratorium that the municipal government team, led by the mayoress Ada Colau (pictured), approved at the beginning of the summer. The moratorium has resulted in the suspension of more than 40 hotel projects that were underway in the Catalan capital, for at least one year.

Núñez y Navarro, which has registered the complaint through one of its subsidiaries, is currently building a new hotel on Calle Rec Comtal, in the historical centre of the city. The Town Hall approved the project eight years ago, and given that it had already been granted the necessary permits and licences, the moratorium was not meant to affect it.

Nevertheless, at the beginning of the summer, the district counsellor of Ciutat Vella, Gala Pin, reported that an investigation had been opened to check whether there had been irregularities with the processing of the urban planning application. At that time, the municipal government did not rule out that the opening of this establishment could ultimately be suspended, in the event that it was able to prove that there had been malpractice in the rezoning of the site.

Overall balance

Yesterday, municipal sources refused to comment on the news that Núñez y Navarro’s complaint had been declared admissible. However, they did say was that the period (of two working months) during which companies affected by the moratorium are permitted to file complaints with the courts will come to an end shortly. Only then will the Town Hall provide an overall assessment of the impact of the measure.

The first consequences of Ada Colau’s moratorium have already been felt. At Deutsche Bank’s former headquarters, located on the corner of Avenida Diagonal and Paseo de Gracia, the existing building will no longer be demolished to construct a hotel, instead the property will be renovated and converted into luxury homes. By contrast, another iconic project will go ahead, namely the conversion of Torre Agbar into a luxury hotel to be operated by the US chain Hyatt.

Original story: Orbyt

Translation: Carmel Drake

Colau Convinces KKH To Abandon Luxury Hotel Project In BCN

2 October 2015 – Expansión

The real estate fund KKH, which owns the Deutsche Bank building in Barcelona, has agreed not to expand the property and convert it into a luxury hotel, as it had planned, after running into strong opposition from the new mayoress of Barcelona, Ada Colau.

The project has been affected not only by the moratorium imposed by Barcelona en Comú, but also by the fact that its suspension was one of Colau’s election promises.

KKH required permission from the Town Hall to demolish the building and construct a larger one, measuring 5,000 m2 more. In exchange, it has agreed to purchase the ‘Taller Masriera’ for €10 million and cede it to the Town Hall for public use, as well as to acquire the construction rights from Los Lluïsos de Gracia, who were willing to transfer the building rights in exchange for financial compensation.

The fund led by Josep Maria Farré has thrown in the towel and announced that it will renovate the existing building to convert it into luxury housing. In this way, the city bids farewell to a project that would have involved the entry of the hotel chain Four Seasons into Barcelona and the creation of 380 direct jobs.

Yesterday, the deputy mayoress for town planning, ecology and mobility, Janet Sanz, said she was pleased that the developers “had understood the extent of the fatigue that is affecting the city and its residents, regarding the cost and impact that certain operations may have in specific areas”.

Original story: Expansión (by M.A.)

Translation: Carmel Drake