Tag: investment volumes

CBRE: 76,000 m2 of Office Space was Leased in Barcelona in Q1

10 April 2018 – El Periódico

During the first three months of the year, 76,000 m2 of office space was leased in Barcelona. That volume, which represents an increase of 4% with respect to previous quarters, is the highest seen in the last nine months, which means that, despite the political tensions, activity in the city’s office market is performing well. According to a report from CBRE, “companies are moving for very specific reasons and the appeal of Barcelona means that activity remains high. Currently, several large companies are evaluating new locations for their offices, which means that the forecast in the short and medium term for leasing remains good”, said Lindy Garber, Head of the Office Area at the real estate consultancy firm.

The most notable operations recorded during the first quarter include the rental of 6,500 m2 of office space by the Property Registrars in the BCN Fira District complex on Paseo de la Zona Franca; the move by the company Norwegian Air to Nike’s former offices on the Mas Blau industrial estate, where it is going to occupy 5,400 m2; as well as Pepsico Iberia’s move to its new offices spanning 4,900 m2 in the WTC Almeda Park complex. Like in most large cities, Barcelona is seeing an increase in demand from companies offering co-working space.

The volume of surface area available in the market continues to be low for another quarter. In the last year, the availability rate has decreased from 12.5% to 10.3%, and there is a shortage of large, high-quality spaces. Although several projects have been handed over in recent quarters, they have not been added to the new supply, since they were pre-leased before they even came onto the market. This practice is gaining ground due to the lack of available product in the market. On the other hand, the entry onto the market of Torre Glòries added around 27,000 m2 of available space in one of the most sought-after areas of the city, the 22@ district. Prime rents, which have risen by 35% since 2014, are continuing their upward trajectory, and now amount to €24/m2/month. Although that figure is still well below the peak of €28/m2/month reached in 2008, the rising trend is expected to continue in the medium term.

Investment market

During the first three months of the year, the office market recorded an investment volume of €121 million thanks, above all, to the purchase of Axiare by Colonial. This represents an increase with respect to the previous quarter when the investment volume amounted to €66.5 million. Nevertheless, despite the improvement in the investment figure with respect to the previous quarter thanks to the aforementioned operation, the political uncertainty is undoubtedly having an impact on the investment market.

Xavier Güell, Director of this area in Barcelona for CBRE, said that “during the last quarter of last year, investors suspended operations that they had underway because of that uncertainty; many returned to their purchase processes at the beginning of this year, but they remain cautious. Given that these processes require a certain amount of consolidation time, the operations will not be reflected in investment volumes until the second or third quarters”. Prime yields remain stable at around 4.25%.

Original story: El Periódico (by Max Jiménez Botías)

Translation: Carmel Drake

Iberdrola Puts Hilton Diagonal Mar Hotel Up For Sale

21 March 2017 – Expansión

Iberdrola has hung the “for sale” sign up over the jewel in the crown of its real estate subsidiary: the building that houses the Hotel Hilton Diagonal Mar, a four-star property located at the intersection of Calles García Faria and Taulet, in the Barcelona neighbourhood of Diagonal Mar.

The company has contracted the real estate consultancy firm Irea to sell the asset, which has an asking price of more than €150 million, according to market sources.

These sources also indicate that the process will be restricted and that they will look to attract four or five candidates interested in acquiring the asset.

The building that houses the Hilton Diagonal Mar is the largest asset in the real estate subsidiary’s current portfolio, behind Torre Iberdrola in Bilbao, which is the corporate headquarters of the multinational company and is therefore strategic for the energy group and not susceptible to being sold.

Iberdrola’s real estate subsidiary has different types of assets in its portfolio, ranging from primary homes and tourist apartments, to offices, industrial warehouses and shopping centres. Currently, Iberdrola Inmobiliaria has a portfolio of real estate assets under management with a combined gross leasable area of more than 200,000 m2.

In Barcelona, the company owns the office buildings Torre Auditori and Torre Marina (in the final phases of construction).

The hotel now up for sale, work of the architect Oscar Tusquets and opened in 2005, was developed by the real estate subsidiary of Iberdrola.

Agreement with Hilton

Just before the construction work was completed, the company reached an agreement with Hilton whereby the hotel chain would take charge of the operation of the establishment for 20 years.

The Hilton Diagonal Mar has almost 420 rooms and around 20 suites, as well as multi-functional meeting rooms and a ballroom with capacity for 1,000 people. The building, which is oriented towards corporate events and conferences, is located opposite the Diagonal Mar shopping centre, a stone’s throw away from Barcelona’s International Convention Centre (CCIB) and 18 km from the airport.

Real estate investment in hotel assets returned to record figures in 2016. In this way, almost a quarter of all investment in commercial assets was linked to hotel assets.

Specifically, last year saw investment volumes of €2,200 million, the second highest amount ever recorded, thanks to a boost from some significant transactions, such as the sale of Merlin’s hotel portfolio – comprising 19 hotels and 3,645 rooms – to Foncière des Murs for €535 million. Likewise, last year, the Hotel Villa Magna was sold to the Turkish group Dogus for €180 million, in what is still the highest grossing operation to date in terms of price per room (€1.2 million), ahead of the almost €800,000 per room that was paid for the Hotel Ritz in 2015. (…).

Original story: Expansión (by R. Arroyo and M. Á. Patiño)

Translation: Carmel Drake

Interview With Rupert Lea, Partner & Retail Director At C&W

3 February 2017 – Eje Prime

Rupert Lea, Partner and Retail Director at Cushman & Wakefield, analyses the evolution of the retail sector over the last year. “There has been an increase in high street operations, but the deals involving shopping centres have really taken the lead and are positioning themselves as a trend for the next two years”, he said, in an interview with Eje Prime.

Question: Now that 2016 is over, what assessment would you make of last year in terms of retail operations?

Answer: In terms of the volume of transactions, it was somewhat better than 2015. But now, the great trend that we are seeing are shopping centres. We have seen more operations involving shopping centres and retail parks: between 2009 and 2013, there was minimal rotation; investment volumes decreased until 2012. (…). Now, investment is growing at a rate of 50%, driven primarily by the capital markets.

Q: What will 2017 be like?

A: The retail market is a wave: it rises and it falls. Demand will continue to be constant and will have the same strength for the next two years. What sets the tone is the availability of supply, something which fluctuates a lot more in the case of shopping centres and centres that are not prime. (…).

Q: In 2017, several important operations that were closed years ago will bear fruit, for example, Uniqlo, H&M…Is the pace of operations still active?

A: Yes. We negotiate with operators from all sectors who are interested in Spain, including those who want to continue to grow brands that already operate in the country. There is still scope for more flagships to be opened in Spain in very profitable locations for operators, but they have to be experienced stores. That is another trend that is growing strongly. (…).

Q: Can we say that the sector has recovered its pre-crisis rhythm?

A: Any references to pre-crisis are complicated, because periods cannot be compared. What we can say is that some values have now reached higher figures (than pre-crisis), and some other values have not. Monetary policy and investor spirit have changed.

Q: What is the thing that interests operators the most in Spain?

A: Appropriate area of influence, robust consumption, suitable locations and suitable store sizes. The latter is the most difficult to achieve, because there are stores on prime streets that do not fulfil the requirements. Spain has a culture that involves a lot of socialising on the street and that generates a lot of opportunities for retail businesses. The success of tourism is also important for operators to take into account; millions of people visit the country each year and that is like the icing on the cake for retailers. (…).

Q: Do you think that the boom in e-commerce will put an end to the development of retail?

A: E-commerce is a complement. We see e-commerce as an ally: it was born as a challenge for high street traders, but we are seeing successful cross-market formulae. We have online operators who are looking for locations so that users on the street can observe their presence. We also have inverse cross-market formulae: customers want to return in store goods that they purchase online. This is the era of omnichannels, and e-commerce is clearly a complement. (…).

Original story: Eje Prime

Translation: Carmel Drake

Ibercaja Completes Sale Of Caja 3’s Industrial Portfolio

13 September 2016 – Expansión

Ibercaja is still putting the shine on its balance sheet ahead of its IPO, which is expected to take place at the end of next year or the beginning of 2018. Having transferred the administration and sale of 14,000 real estate assets to the platform Aktua in February, it is now on the verge of getting rid of all of its non-strategic holdings.

According to sources at the group, the bank has divested more than 200 business projects since 2012, which has allowed it to reduce its volume of portfolio investments by approximately €285 million. But the most important achievement is that it has now managed to finalise the investment plan inherited from Caja 3, as defined by Brussels, when that entity received public aid in 2012. 129 companies from the former savings banks were identified with an investment volume of €153 million, which means that Ibercaja is fulfilling all the requirements.

Nevertheless, it still needs to return that aid. Caja 3 received €386 million in contingent convertible bonds (CoCos) signed by the FROB, of which Ibercaja returned €20 million in March. The remaining balance has to be repaid between March and December 2017.

These divestments represent one of the pillars of Ibercaja’s strategic plan for 2015-17, together with the repayment of the aid; the issue of €500 million in subordinated debt from last year; the sale of problem debt to property developers; the transfer of its real estate assets to Aktua; and this year, its growth plan in Madrid; and its digitalisation plan, for which it has signed a strategic agreement with Microsoft.

In fact, within its specific divestment plan for 2015-2017, approximately 100 companies were identified as possible divestment targets, whereby reducing the volume of its investment portfolio by approximately €180 million. Currently, according to sources at the group, it has divested 53 companies, including total and partial sales. In total, it has decreased its investment in corporate projects by €68 million, with a positive contribution to the group’s consolidated result of €10 million. Its profits amount to €23 million since 2012. Meanwhile, sources at the group added that capital amounting to €27 million has also been freed up. In total, own funds have increased by €50 million.

The companies

In addition to the sale of Gestión de Inmuebles Salduvia, which was included in the agreement reached with Aktua in February this year, Ibercaja’s other major divestments include, by order of importance: the divestment of the Naturiber Group (specialising in the meat sector), Portobelio and Ahorro Corporación Infraestructuras (private equity funds), Ahorro Corporación Gestión (the fund manager), Titulización de Activos, Imaginarium (the toy retailer) and ATCA (a technology development company).

Over the next few years, Ibercaja plans to continue executing its divestment plan, which involves more than 50 additional sales, which will allow it to reduce its portfolio by approximately €112 million more, with the resulting positive impact on the income statement and an efficient allocation of capital.

Ibercaja reported profits of €72.3 million during the first six months of 2016, up by 3.7% compared to a year earlier, thanks to the sale of its real estate arm, as well as sales of debt.

Original story: Expansión (by D. Badía)

Translation: Carmel Drake

BNP: RE Inv’t Amounted To €11,700M In 2015

13 January 2016 – Cinco Días

Real estate investment soared by 67% in 2015 to reach €11,700 million, a record figure that exceeds the total level of investment seen even in the years before the crisis by 25%, according to the consultancy BNP Paribas Real Estate.

After a record year, the firm considers that it is more than likely that the volume of investment will stop growing and will instead stabilise at around €8,500 million (compared with €9,000 million in 2007), due to, amongst other reasons, the scarcity of appropriate investment opportunities and a forecast rise in the cost of money.

This recovery in the real estate sector has also manifested itself in terms of the number of transactions completed, which reached figures never seen before in the historic series, with a total of 271 operations in 2015 compared with 169 in 2014.

The retail and office segments were the most popular in 2015, with investment of almost €4,000 million in each, whilst residential assets accounted for just 5% of total investment.

The consultancy explains that this increase is due to, amongst other factors, the price of properties, many of which still have upwards potential, which would generate profits, as well as the expectations of an improved performance in terms of rental income and occupancy rates.

Madrid and Cataluña continued to be the busiest areas, with investment volumes of €6,000 million and €2,000 million, respectively. By type of asset, shopping centres were the most sought-after properties during the first half of the year, whilst operations involving office buildings were in most demand during the second half of the year.

The most active players in the market were international investors, which made acquisitions both directly, as well as through their shareholdings in Socimis.

In terms of direct investment, players from France, the USA and UK were the most active, but there were also significant capital inflows from Asian countries, such as China and the Phillipines, as well as from countries in the Middle East and Latin American, although the latter was more symbolic than anything.

In September, the company revealed that the total annual investment volume may amount to almost €12,000 million, or to €10,000 million excluding merger deals.

The real estate investment data provided by BNP Paribas Real Estate is based on certain economic indicators that forecast GDP growth of 0.8% in Q3 with respect to the previous quarter, which would mean GDP growth of 3.2% for the year as a whole. In addition, GDP is expected to grow by 2.5% in 2016.

Original story: Cinco Días

Translation: Carmel Drake

Swedish Firm Catella Launches Investment Platform In Spain

1 July 2015 – Expansión

The consultancy firm has hired Javier Hortelano to lead the new investment platform for Spain and Portugal.

Real estate consultancies are focusing their attention on Spain once more. Such is the case of Catella. The Swedish consultancy has decided to expand its commitment to the Iberian market with the creation of an investment platform through which it will channel requests from clients interested in investing in Spain and Portugal. “We are constantly evaluating expansion into new countries and the Spanish market is in recovery – turnover and investment volumes are increasing, and there is a strong inflow of foreign capital”, says Timo Nurminen, Director of Investment and Real Estate Management at Catella.

Catella has appointed Javier Hortelano (pictured above) to lead the new investment management arm. Until now Mr. Hortelano was the partner responsible for Real Estate Transactions at PwC and Chairman of the Spanish Council of Shopping Centres and Retail Parks. “This platform already exists in Finland, Denmark, Germany and for the past year, in France. It is a very attractive project, since Catella currently has €3,500 million in assets under management and Spain is known for being a key market”, says Hortelano, who will be responsible for the investment platform in Spain and Portugal. “We estimate that we will reach investment volumes of between €500 million and €1,000 million within a couple of years”, says the executive.

The majority of this investment will come from international funds, which Catella may add to, by contributing an amount to each operation. “The objective is to work with all kinds of investors: from those looking for longer-term opportunities to those seeking out short-term options, from funds that want to co-invest to those that do not.

In the first quarter of 2015, the Swedish group Catella generated revenues of around 419 million krona (€45.4 million) compared with 267 million krona last year, and made a profit after tax of 43 million krona (€4.6 million) compared with 15 million krona in 2014.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Savills: Spain’s Commercial Property Market Outlook Is Improving

11 March 2015 – Property Wire

There are already signs that Spain’s residential property market is recovering and now a new report shows that its commercial markets are also growing.

International real estate advisor Savills is predicting CBD office yields in Madrid will move from 5% to 4% and 4.5% for super prime properties, as a lack of good quality stock puts pressure on pricing.

This follows strong investment volumes in Spain’s office market during 2014 in which €2.8 billion was transacted, triple the €990 million total in 2013.

The firm states that in terms of location, 60% of investment was made in Madrid, 30% in Barcelona and the remaining 10% in other locations throughout the country.

Savills reports that the growing amount of demand and the lack of supply continues to push achievable yields down in the CBD and the main business areas. Prime yields at the end of the year moved by 100 basis points, secondary areas by 75 basis points and out of town locations saw a change of 50 basis points.

‘Investors preference for Spain’s more mature market of Madrid is undeniable, accounting for a total of €1.65 billion. But the lack of good quality stock is putting pressure on yields,’ said Luis Espadas, director of investment at Savills Spain.

‘The yield in the CBD stands at 5%, and for super prime properties could achieve between 4% and 4.5%,’ he added.

The firm finds that SOCIMIs, the Spanish equivalent of REIT’s, were very active in the office market, with 27% of their total capital being invested in commercial property and 76% of that total in offices.

‘Whilst the SOCIMI and domestic investors were very active in 2014 this year we predict we will see large Latin American investors capitalizing on opportunities in the Spanish office market,’ said Pablo Pavia, director of investment at Savills Spain.

The Savills report also states that take up in the office market at the end of 2014 was 382,000 square meters, some 2.5% less than the previous year. However, 2013 take up was heavily distorted by the Vodafone letting of 50,000 square meters, and discounting that letting take-up grew 12% on the previous year.

Additionally, it points out that there are a number of large space requirements currently in the market, several of which are seeking space exceeding 5,000 square meters.

‘Thanks to signs of a recovery in Spain some occupiers are more willing to sign pre-lease agreements on speculative space in the CBD which in term is prompting major market players to carry out speculative developments. The increase in take up activity will cause rents in the best properties to continue to rise through 2015,’ said Ana Zavala, director of office agency at Savills.

According to Savills rents in the CBD are currently in excess of €25.50 per square meter and could reach €28 per square meter in 2015 given continued strong take up. The firm also predicts landlord will continue to undertake refurbishment projects in 2015, with three quarters of new space in the pipeline for the upcoming year related to refurbishment projects.

Original story: Property Wire

Edited by: Carmel Drake