Aena Mobilises Mega-Investments in Barajas & El Prat Amounting to €4.2bn

29 November 2018 – El Confidencial

The largest property developer in Spain is not a real estate company, it is AENA, a company that does not depend on the real estate sector for its business, on the contrary. It has started a race, together with external partners, to mobilise investments worth more than €4.2 billion focused on two projects: the urban development of Barajas and El Prat, annexes of the airports in Madrid and Barcelona. Together they represent the largest real estate project in Spain, and they are very focused on logistics due to the proximity to both airport centres, but also on offices. In office space, alone, the firm wants to promote almost 1 million m2 across the two urban areas.

This contradiction that the largest property developer is not an agent of the real estate sector is due to the fact that AENA is a very large landowner. For years, all of its plots have aged as if they were wine. The airport city in Barcelona, for example, was projected more than 14 years ago. But only now has Deloitte been engaged to look for international funds to mobilise that investment and Garrigues been contracted for legal advice about the monumental project.

And it is a long-term project. In the case of Barcelona, the most advanced of the two, it plans go out 20 years. In Barajas, the proposal is twice as long, 40 years. Moreover, according to sources in the sector, of the 622 hectares of net plots in Barajas, 396 hectares are awaiting development.

Given that the blocks of land are so close to the airports of the two capitals, logistics is the fundamental basis of the proposals. According to the latest report from Jones Lang Lasalle, logistics assets are generating yields of between 6% and 7%, a high rate when interest rates are so low. In the case of Barajas, for example, the planned logistics development represents the bulk of the project, 1.2 million m2 of constructed space, which will be the largest logistics centre in Spain, with the added synergy of connecting the current airport cargo area with the so-called Corredor del Henares.

In terms of office space, the plans also involve enormous dimensions. At El Prat, 362,000 m2 of constructed space is planned, almost as much as in the whole of the 22@ district promoted to date (…). And in the case of Madrid, it is even larger. At Barajas, the volume of planned offices is triple that figure, although it will have to be constructed over four decades.

In addition, there will be hangars, commercial areas, hotels and cargo services for aeroplanes. In practice, it will be like building two new cities, one in Barajas and the other in El Prat.

The immediate plans

The closest projects are the phases that have been planned for the next five to eight years. At the airport in Barcelona, the phase that AENA has called “catalysing” spans the first five years, during which time €387 million will be invested in total to promote almost 400,000 m2 in different types of urban planning projects.

These investments will run in parallel to the airport projects that have already been approved. In this way, AENA has already committed investments amounting to €690 million in El Prat, which include a new satellite terminal (…), to be carried out over the next four years.

This phase is longer at Barajas. It will last for eight years and will involve a forecast investment of €953 million, according to the Adolfo Suárez Madrid-Barajas Real Estate Plan. During this phase, more than 500,000 m2 will be constructed (…).

Original story: El Confidencial (by Marcos Lamelas)

Translation: Carmel Drake

Meliá Sells Hotel In Mallorca For €24M

21 October 2015 – Expansión

Meliá Hotels International has closed an agreement to sell the 875-room Calas de Mallorca complex, in Palma de Mallorca, for €23.6 million, according to a report filed by the chain with Spain’s National Securities Market Commission (CNMV).

The complex will continue to be operated by Meliá following the sale, under a lease agreement with a variable rental. The identity of the buyer has not been revealed.

The complex is located in an area bordered by cliffs, between the beaches of Cala Domingos and Cala Antena and comprises five buildings (Mastines, Chihuaguas, Balmoral and two blocks of family rooms in the Balmoral gardens).

The hotel chain, owned by the Escarrer family, said that the operation, signed yesterday, represents a “significant milestone” in the achievement of the company’s strategic plan to focus on the reduction of debt through the rotation of assets.

As at 30 June 2015, the hotels and real estate assets included on Meliá Hotels International’s balance sheet were worth €3,555 million, according to the most recent appraisal of the assets, performed by Jones Lang Lasalle.

Meliá Hotels International generated a net profit of €20.3 million during the first half of the year, which represented a three-fold increase compared with 2014.

Original story: Expansión

Translation: Carmel Drake

Britons Buy Homes In Spain, Driven By Strong Pound

5 March 2015 – El Economista

The strength of the British pound makes (house) purchases in Spain more affordable.

Low returns on deposits (at home) encourages Britons to seek alternative investments.

Sun, financial repression and low prices. This perfect cocktail is converting Britons into the main buyers of homes in Spain, especially in areas near the beach. That is because, in addition to the traditional appeal of the coast, Britons are now facing poor returns on their savings at home, due to measures taken by the Bank of England, and because they expect to see a recovery in the real estate sector in Spain. The appreciation of the pound against the euro makes the investment even more affordable for the average Brit, who is also seeing prices in his own country year on year.

An example is Londoner Barry Leverington, who thinks that his money is better off in a Spanish home than it would be earning next to nothing in a British savings account. The bank employee, aged 33 years old, is looking at properties in the Mazarrón Country Club, in Murcia, where two-bedroom villas cost as little as €75,000.

“Anyone who has some capital can buy in Spain, with almost no mortgage, and there is potential for prices to rise”, explains Mr Leverington in a telephone interview. “I grouped together some savings, and with the current low interest rates, I realised they were dormant, not doing anything”.

Foreigners return to Spain

Mr Leverington is not the only one. Foreigner buyers are returning to the Spanish real estate market, attracted by economic growth that exceeds the rates in most of the rest of Europe and by the signs that prices are bottoming out after years of decreases. In fact, sales of homes to foreigners accounted for 13.9% of total sales in the fourth quarter of 2014, a new record.

Britons are the biggest foreign investors, because the zero interest rates on savings accounts (at home) and the prospects for rising house prices in Spain mean that keeping their money in their own country is a much less attractive option.

In total, foreigners invested €6,050 million in Spanish properties during the first nine months of last year, 30% more than during the same period in 2013, according to data from the Ministry of Development. The 40,338 homes purchased represented an increase of 27% with respect to the same period a year before, with Valencia, Andalucía and Cataluña topping the list as the favourite destinations for foreign purchasers.

Interest from overseas investors is increasing after many left scarred, following the collapse of the Spanish real estate market with the onset of the global financial crisis and the burst of the local property bubble. The legacy from this collapse is a stock of more than 1 million homes, many of them in the South and East of the country, in areas very popular with Britons and Europeans.

House prices have also suffered a corresponding crash, having fallen by 42% since their peak in 2007, although in coastal areas, some properties have lost up to 50% of their value, according to estimates from the property appraiser, Tinsa. Nevertheless, it seems that the trend has changed, as the rate of decrease slowed from 9% in 2013 to 3% last year.

Deposits with no returns

The Bank of England has maintained interest rates at a historical low of 0.5% since 2009, which has impacted the interest rates offered by banks on British savings. A financial repression, which is making Britons look for alternatives for their savings, and from there Spanish property looks like a good option.

In addition, it is becoming increasingly expensive to invest in homes in the United Kingdom, where prices increased by 25% between December 2007 and December 2014, according to the Office for National Statistics, led by London, where prices increased by 18% last year alone.

Moreover, the recent increase in the value of the pound against the euro, which has appreciated by 13.5% in the last 12 months, means that homes in Spain are even cheaper for the Brits. This is an important effect to consider, according to the real estate expert José Luis Ruiz Bartolomé, “when something is gifted, it is even more attractive than when you purchase it with a strong currency”.

“People like me want to achieve some kind of return on their savings and they won’t get very far in the real estate market in the UK at the moment”, says Mr Leverington. “Properties in Spain are currently under-valued. It is a win-win situation for everyone”.

Spaniards are also returning to the market, although at a slower rate. The purchase of homes by Spaniards increased slightly by 2.2% in 2014 to reach 319,389 properties, the first increase since 2010, according to date from INE. A ray of light for the sector, although it is still a long way from the highs of 2006, when 955,186 homes changed hands.

Marbella, at its peak

Another symptom of the improvement is that despite the (housing) stock, cranes have reappeared in some areas of major cities and on the coast. Darío Fernández, from the consultancy Jones Lang LaSalle, explains that “we are seeing demand for primary residences from Spaniards in Madrid and Barcelona, and demand for second homes from foreigners in coastal regions. People are confident that the economic risks have disappeared, and see that prices are still very low”.

In fact, in some areas, such as Marbella, demand is so high that international funds are partnering up with local players to buy land and build new homes, adds Fernández. Currently, there are 400 homes under construction in the Malagan town, the highest number in the last six years.

Mr Leverington, the London bank employee, is going to travel to Murcia in June to get to know the area, and if he finds a property he likes, he will buy it. “I have already spoken to some estate agents, I don’t want to wait much longer, because as soon as there is any good news, the market will recover and I don’t want to miss out”.

Original story: El Economista

Translation: Carmel Drake

Gecina Sells BMW Offices In Madrid For €41m

26 January 2015 – Invertia

The French real estate company Gecina has finalized the sale of an office building in Madrid (Avenida de Burgos) to a SOCIMI managed by IBA Capital Partners.

Gecina was advised by Resource Capital Partners, Jones Lang Lasalle, CBRE and law firm Almagro.

Original story: Invertia

Edited by: Carmel Drake

JLL to Provide RE Services to BBVA

17/12/2014 – El Mundo

JLL, financial and professional services firm specialized in commercial real estate, has been selected by Spanish bank BBVA for overall management of the entity’s properties.

In the virtue of the multiannual agreement, JLL shall provide data and lease management (for branches in Mexico, Portugal and Spain), as well as transaction administration services (for the regions of EMEA and Asia-Pacific) in regard to the asset portfolio.

Financial institutions seek innovative real estate strategies while reinforcing to guarantee their operative presence on the market in line with their clients’ needs, said Andres Escarpenter, CEO of JLL Spain. We are convinced that our cooperation with BBVA will create an excellent atmosphere for the bank to offer A1 quality financial solutions to its clients, the executive added.


Original story: El Mundo

Translation: AURA REE

Madrid Office Space Demanded by Law Firms

25/11/2014 – ExpansionPro

Economical and real estate improvement soaks in the law office market. The latest report by Jones Lang LaSalle (JLL), titled Law Firm Perspective Global 2014 states that the city of Madrid had left the ‘slump stage’ and entered in the ‘growth phase’ – just where it was before the boom.

Thus, as the study explains, rapidly shrinking supply of office space in Madrid makes many lawyers look for another location before the prices rise.

Further on, JLL points out that the most-desired Castellana street (aerial picture) may at most see refurbishment and redecoration, unless any new office project comes up. When it comes to the law firms, the company says they still show a traditionalist approach to picking a representative location, selecting compartmentalized, highest-quality buildings.

Speaking of the global market, the report informs the rental prices are expected to rise in 77% of markets of the Northern America, in 56% of the European ones, and in 43% of markets in Asia. Only 15% of all forecast some advance in tenant conditions or fall in prices.

Madrid Primary Area

The capital-based lawyers offices focus their search on the aforementioned Castellana avenue and areas nearby: the Salamanca neighbourhood in the east, and the Almargo and Zurbano zones in the west.

The smallest firms choose mixed-use and residential buildings. In turn, 96% of the 25 largest are found in one of the areas specified above.

To give a few examples of recent relocations, Hogan Lovells has occupied a 4.608 square meter office at numbers 36-38 Paseo de la Castellana, and White & Case a 1.142 square meter one at number 7 on the same street. Next to change premises was Dentons (number 53), as well as Amat & Vidal-Quadras (21 Ortega y Gasset street) and Martínez-Echevarría (33 Principe de Vergara street). Second Spanish branch of Arochi & Lindner opened at 28 Serrano. Also, Herbert Smith will move its team to a 4.000-square meter old office of Cuatrecasas, Gonçalvez Pereira situated at 43 Velazquez street. Finally, CMS Albiñana & Suárez de Lezo and Bird & Bird are currently eyeing the market in search of new premises.


Original article: ExpansiónPro (by Mercedes Serraller)

Translation: AURA REE

RE Investment in Barcelona to Cross €700 Mn & Double 2013 Volume

13/06/2014 – Finanzas

It is expected that this year´s property investment in Barcelona will exceed €700 million, over a double than the €303 volume registered in 2013, as Jones Lang LaSalle (JLL) said. In the first quarter of 2014 solely, the amount post €119 million.

At yesterday´s property forum by the advisory firm, director of equity markets at JLL Xavier Cotet pointed out that “those who are not present in the Spanish property market are not investing in real estate”.

“Barcelona witnesses record low levels in terms of product sales: cranes are halted, there is no construction, there is nothing”, Elena Torres responsible for office market sadly stated. Moreover, she told the majority of “supposedly sufficient” office spaces is unfortunately “obsolete”.

She also vowed for acceleration in financing, construction, developement and renovation for Barcelona offices, as she put it “to give impetus and rock the market”.

The advisory firm forecasts that the office segment, especially the logistics part, will struggle until recovery of the sector, in case of the logistics additionally fuelled by increase in electronics trading.

Besides, CEO of Magic Real Estate Ismael Clemente portends great success for Socimis (Spanish versions of REIT firms) in the nearest future as “a wave of assets” will be absorbed by them.

In turn, Miguel Pereda, CEO of Grupo Lar assured that “not all properties in Spain are low-cost, for example shopping malls are not at all”.


Original article: Finanzas (after EFE)

Translation: AURA REE

Jones Lang LaSalle: First Signs of Reversal on Industrial & Logistics Market in Spain

3/03/2014 – Jones Lang LaSalle

The Report on Industry and Logistics (El Informe de Industrial y Logística) by Jones Lang LaSalle analyzes movements within the sector underlining the lack of significant purchase transactions due to the fact that the cut-off in financing undermined the sector. Nonetheless, according to the report, the year 2014 casts positive outlook inasmuch as on the one side the country risk faded away, we think that the yield hit the bottom, therefrom recovery shall be imminent and finally, the returning international investors who start to demand new industrial plants that implies creation of new spaces.

Madrid´s industrial area and land

The demand from the part of small and medium-size businesses is scarce due to serious insolvency and financing problems. However, the ones that are powerful enough to buy the industrial plants come across considerable opportunities.

When it comes to supply, the price of finished product shows the impact of continuous decrease, let alone the interesting assets proceeding from arrangements with creditors.

Land purchase presents poor numbers, basically due to lack of demand. At present, we find a wide offer of outstanding land at an attractive price in all rings.

On the other hand, some developer companies are willing to buy and develop land for tender finalists, however the terms and conditions offered by the lattest in agreements make accomplishment of the projects impossible.

Logistics in Madrid

The demand in Madrid has not got back on its feet as companies still cannot afford vacant spaces. In the primary areas availability is scarce (7.5%) and that pushes investors to surrounding areas. The demand aims at the second and the third ring, where availability rate demonstrates 9% and 42% respectively.

Jones Lang LaSalle´s report also analyzes supply and assures that the availability rate remains stable in the second quarter of the year, however shrinking number of large industrial buildings is noteworthy. In the second and third ring there are lots of obsolete property in need of low-cost trading.

In the primary zones, we observe an improvement in rental fees (4,80€/m2), whereas in the second and the third ring the prices reach 3,10€/m2 and 2,15€/m2 respectively. (…)

Talking about transactions, high-quality and well-situated demand turns towards 2.000-3.000 m2 in all facilities areas. The logistic space absorbtion in Madrid during 2013 showed 355.190 m2. (…)

Industrial product and land in Barcelona

Demand analysis in 2013 presents prectically no significant operations within this area, although the demand in Barcelona´s surroundings is high and supply low. (…). Still, financing is scarce, so most of the transactions are paid from own resources. The land prices ranged between  150€/m² and 400€/m².

Demand for industrial buildings is also poor, not in primary zones, though, where prices vary from 3,50€/m²/month and 5,25€/m²/month.

Logistics Barcelona

In the last quarter of the year, the absorbtion of logistic space was equal to 106.200 m² that added to the 205.000 m² from the previous quarters give 311.200 m² throughtout 2013.

The supply of industrial buildings in Barcelona is currently set at 672.300 m², about 6% less than a quarter before and the availability rate is 10.7%. Within primary zones, the rate shows 10%, whereas in the second and the thrid ring represent 7.2% and 15% respectively.

Maximum rental rates in the last months of 2013 showed 6,25 €/m²/month in the primary zones and 5 €/m²/month and 3 €/m²/month in the 2nd and 3rd ring, respectively.

The greatest transactions of the year are the following: Docout´s renting an industrial building of 22.848 m² from Prolongis and the rent of old buildings of Ochoa in L’Hospitalet del Llobregat, Cornellà del Llobregat, El Prat del Llobregat and La Bisbal del Penedès, at a tender sale.

 Investment market: Industrial and Logistic

The year 2013 was a turning point for the sector. The most active, opportunistic investors are continously looking for great volume and bargains.

Primary yields in Madrid showed 8.25% (expected to fall sharply during 2014 due to strong investment and long-term contract signing), while in Barcelona they settled at 8%.

The report by Jones Lang LaSalle highlights that the year 2013 ended up with €100 million investment and throughout 2014 the number might even triple. (…). Since the beginning of 2014, we observe improvement in activity within the sector and we expect better contract signing rates this year.

Original article: Jones Lang LaSalle

Translation: AURA REE

Office Rentals in Barcelona Hit the Bottom

International real estate consultant Jones Lang LaSalle published today the report on rent and investment in offices within Barcelona during the fourth quarter of 2013.

Office Market in Barcelona

The prime rentals on the office market in Barcelona seem to reach the rock bottom level with the price of 17 €/m2/month. After five years of continuous fall, one can speak of adjustment completion assuming the dip down by 40% comparing to rental prices´golden age of the areas of Paseo de Gracia and Diagonal.

The report informs that the short- and medium-term tendency in the office rents will result in price stabilization and future benefit as there might be little supply of this kind of units in Barcelona. The office stock will continue to witness rehabilitation which started 2 years ago.

Jones Lang LaSalle highlights that the availability rate at the end of 2013 was 14.7%. The appearance of the Cornerstone in 22@ project for a short moment increased slightly the availability. However, the indicator will start to go down from the second quarter of 2014 on due to lack of new offices on the market and a rebound in the contracting in the friendlier economic environment.

In the part about transactions, the report emphasizes that in 2013 Barcelona registered the lowest number of the office rent contracts in last 16 years. In the last quarter of the year the contracts involved mere 55.000 square meters which added to the accumulated 122.000 m2 from the previous three quarters equals to 177.000 m2.

According to Jordi Toboso, the CEO of Jones Lang LaSalle in Catalonia “(…) The last quarter of 2013 has been the most vivid over the whole year and the first quarter of 2014 already looks promising”.

Public Administration will play important role in the sector due to its relocation and space rationalization plan for 2014.

Investment Market in Barcelona

As the consultant company claims, the last quarter of 2013 marked rising interest in the real estate investments in Barcelona. Both national and foreign investors turn their eyes to the property in the city center. Precisely, the talk is about all types of investors: opportunistic, value-added and core. If it comes to the individual assets, the demand focuses on portfolios, debts, management companies, etc.

The demand for the office buildings in profitability has not changed and 2013 showed relevant consolidation on the part of the hotel investors about the office property, both empty and with short-term tenant contracts. Conversions became an important part of the market (in 2013 20% of total investment) (…).

In turn, the supply lacks property in profitability that would meet the investors´expectations. The property put on sale by the Regional Government of Catalonia (Generalitat) allowed to test the interest and prices (…).

The major investment demand also provokes conduction of off market transactions (…) however in 2013 they were scarce.

(…) During the last quarter of 2013, only two transactions have taken place: the sale of the building Córcega 289 destined for a hotel by the insurance company Zurich and the sale of the trade premises of Cahispa at 16-18 Roger de Lluria Street to Princess hotel group.

The report informs that the total investment amount in 2013 was 290 million Euros, 8% more than in 2012. If it comes to the profitability, it has slightly gone down in the area of Paseo de Gracia/Diagonal by 6.5%, in hope for the tendency to continue in 2014 in the city center.

Source: Inmodiario

Jones Lang LaSalle: Property Prices Will Touch Bottom in 2014

Housing prices will touch the bottom as soon as in 2014 and since then they will stabilize and push higher the real estate property prices, basically among the general public, a construction company Jones Land LaSalle predicts.

Nonetheless, the director of the Residential, Banking and Saving Bank of the company, Carlos Ferrer-Bonsoms says that even though the prices reach their minimum level, “there will be no joy” due to the lack of financing, high unemployment rate and the loss of buying power within the company resulting from the crisis.

Additionally, he assures that in some areas the prices are already going up, like in the center of Madrid, districts of Chamberí and Salamanca or PAU in the north of the capital, where there are no new houses offers found.

An upward tendency has been also observed in San Sebastian and some other places in the north of the country.

Source: El Economista