Tag: IE Business School

Spain’s First Student Hall Socimi Prepares Its MAB Debut

13 September 2017 – El Confidencial

Student Properties Spain Socimi will be the first listed real estate investment company specialising in student halls of residence to debut on the stock market. And it will do so with an asset that could mark a before and after in this market in the Spanish capital.

It acquired the building at the end of 2016 from the insurance company Mapfre for €13 million. The property is located on Calle Don Ramón de la Cruz, in the heart of the Salamanca neighbourhood, just opposite Nuestra Señora del Pilar school, 200m from the Deusto Business School (the Universidad de Deusto’s business and economics school) and 500m from the IE Business School.

With a total surface area of 5,420 m2, spread over eight floors, of which 3,500 m2 are above ground, the asset used to house one of Mapfre’s private clinics. But its new owner is committed to converting it into a hall of residence for wealthy students. In fact, the property is currently being renovated by the construction company Vialterra Infraestructuras, which was awarded the building contract, with a budget of around €3 million (…) plus indirect costs of €1 million (…).

With those figures on the table, all indications are that the building will end up housing a luxury hall of residence for students, in line with The Lofttown project in Barcelona. The price of rooms is likely to reach €1,800/month. Having said that, all kinds of services will be included: an outdoor gym, a solarium, a co-working room, a private kitchen, weekly cleaning, use of a 3D printer, laundry, a Play Station, a chill-out terrace and a parking area for bikes, amongst other services.

“Projects such as The Lofttown in Barcelona are hard to replicate in many cities in Spain, and above all, they are hard to scale up. That does not mean that they cannot be attractive and even very profitable real estate investments than more standard products, but it does mean that they always have to be marketed and managed by very specialist teams. Moreover, institutional capital will always consider them to be niche products”, says Patricio Palomar, Senior Investment Consultant at AIRE Partners.

Name change and upcoming stock market debut

Don Ramón de la Cruz 37 was acquired by Collie Investment, a joint-stock company that was subsequently transformed into a Socimi. A week ago, that entity changed its corporate name to Student Properties Spain Socimi (…).

The managers behind the company are Altamar Capital Partners, whose President and founding partner is Claudio Aguirre (Goldman Sachs España), Amira Real Estate Asset Management and Orienta Capital, which is chaired by Emilio Soroa, former Director at Seguros Bilbao.

Indeed, one of the directors of Altamar, Miguel Zurita, joined the Socimi just two weeks ago to replace Fabrizio Agrimi, CEO of the firm until 28 August (…).

“In markets such as the USA, Australia, the United Kingdom, the Netherlands and Germany, student halls have gone from being considered as alternative real estate assets to being products that have as much demand and liquidity as hotels and logistics platforms. To the extent that our market converges towards that trend and becomes more mature, we are going to see products of a different quality appearing, designed for a different type of consumer, in the same way that three-star hotels exist in cities alongside super-luxury hotels”, says Palomar (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Rents In Azca’s Towers Exceed Those In The Cuatro Torres

12 September 2017 – El Economista

The Cuatro Torres skyscrapers, to the north of Madrid, are no longer casting a shadow over Azca, which is establishing itself as the iconic business district in the city. With views overlooking the Paseo de la Castellana and just a stone’s throw from the Santiago Bernabéu Stadium and the Nuevos Ministerios transport hub, this business centre has managed to renew itself, to avoid being left behind compared with other areas of Madrid. So much so, that the rents for its recently renovated skyscrapers are 16.6% higher per square metre than the most expensive space in the Cuatro Torres, to the north of the city.

Castellana 81, the historical headquarters of BBVA, leads the ranking in terms of rental prices in Madrid, given that its empty space is being marketed for between €27 and €35 per square metre per month. This tower, designed by the prestigious architect Sáenz de Oiza, has been subjected to a comprehensive renovation by its owner, the Socimi GMP, which spent €30 million renovating one of its most iconic properties in Azca and on Madrid’s skyline.

The asset, which became a multi-tenant property when it first came onto the market, has already managed to conquer new companies following the departure of the banking entity, which moved to its own financial city, in Las Tablas, to the north of Madrid. Thus, in the last few months, rental contracts have been signed with Teka and Hays.

At the forefront of design

Castellana 77, which is also owned by the Montoro family’s real estate company and the Singapore sovereign fund, GIC, has been the subject of another of the major renovation projects that has been carried out in Azca and which has positioned the business district at the forefront of design. Its façade is covered with slats that protect it from direct sunlight and which are lit up at night in a diverse range of colours.

The tenant that decides to lease the office space in this building, which spans 16,200 m2 over 18 floors, will be able to choose the colour of the tower, which has more than 200 parking spaces as well as charging points for electric cars. With these features, this property has the second highest rents in Azca, which range between €28 and €33 per square metre per month.

And it is followed closely by Torre Europa, which housed the headquarters of the professional services firm KPMG for many years. Following the move of that consultancy firm to the Cuatro Torres, the tower has been renovated to turn it into the first intelligent and connected office building in Spain. Infinorsa, the majority owner of this skyscraper, which overlooks the Santiago Bernabéu, has invested €20 million on a facelift of the façade, which had not been changed for 30 years, and above all, on the renovation of the interior, which has given a radical about-turn to the essence of this 121m-tall tower (…).

Rents in this tower now range between €27 and €32 per square metre per month. Its renovation has already captivated one of the large international law firms, Freshfields (…). The US firm AOL has also decided to move its Spanish corporate headquarters to Torre Europa, as well as a pharmaceutical company (…).

Torre Picasso, the tallest skyscraper in Azca, at 156m, has not undergone such a comprehensive renovation as its neighbours, but following the departure of the consultancy firm EY to Torre Titania, 15,000 m2 of space there was left vacant. Some of that space in the tower owned by Pontegadea – the investment arm of Amancio Ortega – will be leased to Deloitte, which will thereby become its largest tenant. After several improvements to the property, the highest floors are now being marketed for €31/m2/month (…).

Rents in the Cuatro Torres barely reach €30/m2/month

Nevertheless, in the new financial district located in the north of Madrid and known as Las Cuatro Torres, only one of the towers manages to charge a rent of €30/m2/month, even though the buildings are much younger, given that they were inaugurated between the years 2008 and 2009.

Office space in Torre Espacio ranges between €29 and €30 per square metre per month. The Philippine group Emperador, which owns this skyscraper (…) renewed the image of the tower at the end of last year and launched a new marketing plan with the aim of finding tenants for the 8,800 m2 that were vacant in the building at that time.

Next in the ranking is Torre Cepsa, for which Amancio Ortega (…) paid €490 million last year. It is occupied almost in its entirety by the oil and gas company whose name it bears; the cost of the 15,000 m2 of space that is available ranges between €23 and €28 per square metre per month.

Meanwhile, Torre de Cristal, the tallest skyscraper in Spain, at 210m, is the most affordable of its neighbours, since its available space is being marketed for between €25 and €27 per square metre per month. Last year, KPMG left the Azca area and moved to this property, where it leases around 23,000 m2 (…).

Next door is Torre PwC, leased to the consultancy firm whose name it bears and the five-star hotel Eurostars. Its owner is the Socimi Merlin Properties (…) and PwC reportedly pays €19/m2/month.

The Cuatro Torres complex is now getting ready to receive a fifth tower, Torre Caleido. That property, which is currently being constructed (…), will be leased to IE Business School and Grupo Quirón-Salud (…), who will reportedly pay between €15 and €18 per square metre per month (…).

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Corestate Buys Old Hall Of Residence In Madrid For €14M

16 November 2016 – Expansión

A new investor has made its debut in the Spanish real estate market. The investor is Corestate Capital Holding, a large investment fund headquartered in Luxembourg, which owns a broad portfolio of assets, mainly located in Germany and Austria. Corteste has combined forces with an investment partner to acquire a former halls of residence, located at number 42 on Calle Juan XXIII, in the Moncloa district, the heart of Madrid’s university area.

Corestate arrived in Spain last year when it teamed up with Inmobiliaria Espacio – part of the Villar Mir group – to launch a jointly owned company called Iberian Corestate Capital Advisors. In September 2015, that company announced that it is going to construct a fifth tower in the Cuatro Torres office complex in Madrid, on Paseo de la Castellana.

The owner of OHL was awarded the plot that runs alongside the four Madrilenian skyscrapers back in April, after the city’s Town Hall decided against building a Conference Centre on the site. The company controlled by Juan Miguel Villar Mir was awarded the concession, which gives it the right to operate on the land for 75 years, after it submitted the highest offer. Specifically, OHL agreed to pay an annual fee of €4 million, outbidding the second-best bid, led by Hispania and Ferrovial, who offered around €2.6 million. The Town Hall had asked candidates to submit bids for an annual fee of at least €1.9 million.

In September last year, Corestate announced that it was going to join the project through the company Iberian Corestate.

It is expected that Iberian Corestate will invest €240 million in the fifth tower project, which will involve the construction of a skyscraper that will house an IE Business School campus and a Quiron group medical centre. Corestate declined to comment on the plans for the Castellana project, but did confirm that it has purchased the Madrilenian hall of residence. According to sources in the sector, Corestate paid around €14 million for the property.

Until now, the asset acquired has housed a Spanish-Mexican secondary school – Santiago Galas de Arce. The building, which has been operating for almost half a century (44 years), will undergo a profound transformation with its new owner, given that Corestate is preparing an ambitious plan to restore the property and renovate the 4,022 m2 space, which will house 260 rooms and 302 beds.

Corestate’s idea is to demolish the existing complex and construct a new building that seeks to be one of the best equipped halls of residence in Madrid. The project will include several services such as a reception and concierge, common areas, such as a restaurant, gym and laundry facilities, as well as recreation areas in the form of patios and terraces.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Villar Mir Negotiates Partial Sale Of Fifth Tower To Hispania

29 September 2016 – Expansión

According to the businessman Juan Miguel Villar Mir, the Villar Mir Group has begun negotiations with the Socimi Hispania to join forces for the development of the fifth tower, the new skyscraper in the north of Madrid, next to the Cuatro Torres Business Area complex.

It is one of the most important buildings in the capital in terms of investment, given that the developers will need around €500 million to cover the construction and rental costs – an initial lease has been granted for a period of 75 years.

Sources at the family holding company have confirmed that preliminary conversations have begun, aimed at Hispania’s entry into the project “as a minority shareholder”. Other sources state that the Socimi, managed by the Azora group and in which George Soros holds a stake, may be interested in acquiring 100% of the building, which will be leased in its entirety. Nevertheless, the Villar Mir Group assures that it will maintain the majority stake.

The fifth tower project, which Villar Mir won at the end of 2014 in a tender organised by the Town Hall of Madrid, has already selected its tenants. Earlier this year, the IE Business School agreed to lease 50,000 sqm of the building for its campus. The bottom part of the complex, measuring 12,000 sqm, will house leisure areas, a shopping arcade and a health centre, which will, in theory, be operated by the Quirón Group. The project, promoted by the Villar Mir family, still needs to obtain the definitive permits from the mayoress of Madrid, Manuela Carmena.

Partners

In September 2015, the Swiss investment fund Corestate announced that it had agreed to form a joint venture with the Villar Mir Group to jointly develop the fifth tower. Six months later, in March 2016, Juan Miguel Villar Mir qualified that announcement by stating that the agreement with Corestate had not been signed yet. With or without Corestate, the negotiations with Hispania are happening at a time of peak activity for Spain’s listed Socimis. Hispania reached the final round of the tender to acquire the building, after it partnered up with Ferrovial, but Villar Mir won the 75-year lease by offering to pay an annual fee of €4 million, equivalent to twice the bid price. (…).

Divestments

The search for partners forms part of the strategy being pursued by the Villar Mir’s holding company to finance its multi-million investment commitments through Espacio and OHL, without increasing its debt, which amounts to €14,000 million. The other source of extraordinary income comes from the sale of its assets. (…).

The group needs funds to tackle its three major real estate projects (the fifth tower, the Canalejas Complex and the War Office in London), as well as several toll roads in Latin America.

Original story: Expansión (by C. Morán and R. Ruiz)

Translation: Carmel Drake

Which Hotels Are Most Sought After By The Socimis?

22 June 2016 – Hosteltur.com

Javier Arús, Head of Investments at Hispania, spoke at a conference last week entitled “Spain: Hotspot for international hotel investment”, organised by the Real Estate Alumni Club of Instituto de Empresa at the IE Business School.

There, he highlighted that the number of operations involving asset repositionings are on the rise, such Hispania’s acquisition of the Ibizan hotel chain San Miguel last week for €32 million. That deal involved the purchase of three mid-range hotels in Ibiza, where significant investments will be made to reposition the properties and convert them into premium assets. This type of operation, “with hotels in very attractive destinations and excellent locations, allows us to develop new products, almost from scratch, and obtain very significant resturns on our investments”, said Arús.

The Head of Investments at Hispania also spoke about the contractual relationships that exist between the Socimi and the operators of the hotels it has acquired to date. He stressed his firm’s preference for mixed lease contracts, which guarantee a minimum level of rental income and offer a variable rental income component to complement the fixed revenue stream. (…).

Meliá’s commitment

Meanwhile, Ángel Luis Rodríguez, Vice-President of Portfolio Management at Meliá Hotels International confirmed that the hotel chain is not currently entertaining the possibility of structuring its assets under a Socimi framework. Rather, the firm has committed itself to the creation of a very specialised real estate manager within the existing company structure, without any need to legally separate the hotel manager’s assets. Moreover, it is focusing its efforts on investing in technology and in core assets. 80% of the hotels in its portfolio operate under management frameworks.

Rodríguez agrees with Javier Arús that there are excellent opportunities to be had from “measured” repositioning of vacation hotel assets. By way of example, he described Meliá’s Calviá Beach project and highlighted the increase in value and quality that it has represented for a tourist destination such as Magaluf. There, the chain, which operates 3,200 rooms, has adopted a deliberate strategy that has allowed it to increase RevPar (revenues per available room) in the area by between 70-80% in a short period of time and with a very limited Capex investment.

Its brand-focused strategy is allowing the company to “enjoy a ‘virtuous circle’: brand strategy + investment in repositioning = increase in ARR (average room rate) and RevPar – Greater client satisfaction and loyalty – Increase in asset value – Better segmentation of customers – Higher direct sales – Higher Returns”.

The three speakers (Javier Faus, President of Meridia Capital also spoke), all experts in the hotel sector, agree that Spain may be able to maintain the level of growth in the hotel sector, if its supply is renewed and updated to reflect the expectations of international tourists, who are genuinely very fond of our country. They also highlight the importance of professionalising the operation of assets and investing in technology to deepen client knowledge and loyalty.

Original story: Hosteltur.com

Translation: Carmel Drake

Plans For The 5th Tower Begin To Take Shape

1 April 2016 – Expansión

The skyscraper, located in the heart of the capital’s financial district, will house the new headquarters of the IE University, as well as a clinic and shopping centre.

The plans for the fifth skyscraper in the Cuatro Torres complex – the new financial district in the capital, which currently comprises the Torre de Cristal, Torre Caja Madrid, Torre Sacyr Vallehermoso and Torre Espacio – are taking shape and a date has been set for the inauguration of the tower: the end of 2019, according to the IE University, one of its future tenants.

The business school will expand its facilities and open its new headquarters in the north of Madrid.

Specifically, the fifth tower will house the IE Campus in a building that will be 165 m tall and have a surface area of 50,000 m2 on the Paseo de la Castellana. In addition, this site will also be home to a clinic and a shopping centre.

The plot of land belongs to the Town Hall of Madrid, which has granted its use to Inmobiliaria Espacio. In parallel, the subsidiary of the Villar Mir Group has reached an agreement with the IE University to offer it this space under a 20-year rental agreement, which may be renewed for additional 55 years.

Details of the project

“From now on, the Town Hall of Madrid, Inmobiliaria Espacio and IE University will work together to ensure that the project meets the needs of the city of Madrid in the best possible way”, explain sources at IE. According to these sources, work will be carried out over the next three months to determine the “details” of the project.

OHL Desarrollos will be responsible for the construction of the new infrastructure, which will include auditoriums, sports facilities, green spaces and a 35-storey tower with classrooms and educational areas. Meanwhile, the studios Fenwick Iribarren and Serrano-Suñer Arquitectura will lead the design of the project.

At the new IE Campus, university degree training will be delivered in areas such as Business Administration, Architecture, Technology, International Relations, Law, Communication and Psychology.

In parallel, the IE University, which has been located on María de Molina in Madrid since it was first founded, will continue to perform activities for the business school and other post-graduate programs at its current facilities.

According to the institution, the IE Campus will have a “new, cutting-edge” design for its educational space, offering open areas dedicated to teaching, teamwork and networking between the university and business communities. The Campus will also have a vertical space, which will reproduce the working environment of companies and organisations from all over the world, as well as a horizontal space with sports facilities, large auditoriums and green areas for exclusive use by the institution’s educational community.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Fotocasa: Second-Hand House Prices Increase In 15 CCAA

6 May 2015 – Expansión

The price of second-hand homes increased by 1.1% in April compared to March, after seven months of continuous inter-monthly decreases. The increases were widespread: they were recorded in no less than 43 provinces and 15 autonomous communities, according to statistics from Fotocasa and the IE Business School.

Moreover, house prices increased in April in 460 of the 733 municipalities analysed in this report – 63% of the total, i.e. two thirds. Meanwhile, prices remained stable in 17 municipalities and decreased in 256.

The average cost per square metre of second-hand homes amounted to €1,636 last month. In terms of the quarterly variation, the price of second-hand homes (those aged more than two years old) increased by 0.4% with respect to January 2015.

Second-hand homes got more expensive last month in 15 autonomous communities, i.e. everywhere except for the País Vasco (-0.2%) and Navarra (-0.6%). The greatest increases were recorded in the Canary Islands (up by 3% in just one month) and the Balearic Islands (+2.3%).

This index shows the stabilisation of house prices in Spain. The fact that prices are continuing to increase month after month is an indicator of a trend towards recovery.

The quarterly variation was 0.4%, something not seen since February 2010, a rate that exceeds the variation recorded 12 months ago by 1.8 percentage points.

In terms of the evolution of house prices by province, of the 43 provinces in which price rises were recorded in monthly terms, the highest growth was seen in Toledo (7.4%). Prices decreased in just three provinces: Vizcaya (-0.1%), Navarra (-0.6%) and Palencia (-0.7%). House prices did not vary in four autonomous communities.

Unsellable stock

Meanwhile, BBVA Real Estate’s Research Department said yesterday that the stock of unsold homes is going to decrease significantly, although around 300,000 homes are practically “unsellable”. Despite that, the sector’s contribution to GDP will amount to around 5% in 2015.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake