KF: Inv’t in Offices Amounted to €1.3bn & €0.8bn in Madrid & Barcelona, Respectively, in 2017

13 June 2018 – ABC

The performance of the office sector in Madrid at the end of 2017 bodes well for a “historical” 2018. That is according to all of the investment indicators managed by the real estate experts. Some very positive data for the region, which consolidates the Spanish capital’s position as the most attractive place for companies to locate their headquarters. In fact, it continues to be the greatest magnet for securing capital in the office market with a business volume of €1,324 million – 61% of the aggregated total – compared with €835 million in the Catalan capital. In terms of rented office space, 570,000 m2 was leased in Madrid, compared with 300,000 m2 in Barcelona.

Those are the findings of a recent report about the sector compiled by the consultancy firm Knight Frank, which forecasts greater activity in the sector in Madrid this year due to the rotation of assets by the Socimis and funds to fulfil their business plans. In Madrid, more than 40% of the total investment in 2017 involved funds, which, together with the Socimis outperformed other real estate players during the second half of last year.

The notable differences between the two regional capitals have increased as a result of the effects of the political instability caused by the independence drive and the decrease in tourism that has hit Cataluña. The experts consulted highlight that the rate of company creation has decreased in Cataluña since last summer, whilst in the Community of Madrid, the numbers have increased, with more than 185,000 companies registered with the Social Security at the beginning of 2018.

“The Spanish capital continues to be the key location due to its wide range of opportunities. Net absorption has been increasing for several years and rental prices are still very competitive in comparison with the main European centres”, explains Raúl Vicente, Director of Offices at Knight Frank. Nevertheless, the experts indicate the path that the city should take to become a “super city”. “In terms of the major challenges that it will have to overcome, they include mobility, adaptation to the technological revolution that we are living applied to the service of the city, efficiency, access to housing and an office supply that is commensurate with international demand, amongst others”, highlights the report.

The average price of offices in Madrid’s CBD has been rising in recent years. Prices in the capital now exceed €8,000/m2 on average, whilst in Barcelona, they amount to €6,900/m2. The highest price paid last year was for the former Barclays headquarters in Plaza de Colón, which was purchased from Barclays by CBRE Global Investors for €14,000/m2.

Other notable operations stand out including the purchase of Torre Serrano by Infinorsa and the sale of the Isla Chamartín Business Park to Tristan Capital and Zaphir Asset Management for €103 million. Also, the acquisition of the Palacio de Miraflores on the Carrera de San Jerónimo for €60 million by Remer Investment and of the Los Cubos building by Henderson Park and Therus Invest for €52 million (…).

Original story: ABC (by Adrián Delgado)

Translation: Carmel Drake

Lone Star Puts Isla Chamartín Business Park Up For Sale

2 February 2017 – El Economista

In just a few days time, Lone Star will hang the For Sale sign up on one of the most attractive office asset in its Madrid portfolio. The asset in question is the Isla Chamartín business park, located in the north of the capital, opposite the studios owned by the production company Zeppelin Televisión.

The complex, which comprises four office buildings with a surface area of more than 9,000 m2 each, is located on Avenida de Manoteras 20 and, according to comments from sources in the sector, will be put on the market for more than €110 million.

The US fund generated revenues of €380 million at the end of last year from the sale of the Adequa business park, which neighbours Isla Chamartín. That is a mixed use complex, covering more than 100,000 m2, which is now owned by the Socimi Merlin and which includes land on which two more buildings are going to be constructed.

The two complexes entered Lone Star’s portfolio in 2015, when the fund foreclosed a debt package amounting to more than €600 million from Bami Newco, the real estate company owned by the late Joaquín Rivero, which filed for liquidation that same year.

The Isla Chamartín complex was finished just a few months before the real estate bubble burst – its four buildings were inaugurated between February 2007 and June 2008.

In total, the properties that comprise the park have a combined surface area of 38,134 m2, plus 930 parking spaces. Their tenants include Iberdrola Ingeniería y Construcción, BBVA Consultoría and Aernnova Engineering Solutions Iberica.

Over the last few weeks, Lone Star has been organising the sales process to select the agents that will take care of the marketing side. In the end, the fund has engaged the consultancy firms Knight Frank and CBRE, which are expected to launch the official sales process at the beginning of February.

Experts believe that this asset, located just seven minutes by car from Madrid Barajas Adolfo Suárez airport, with two Metro stops and easy access to the M-11 and A-1, will be well received by investors. (…).

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake