Laborde-Marcet: Inv’t in Tertiary Assets Amounted to €8.5bn to September

12 November 2018 – Eje Prime

Non-residential assets are proving themselves to be another driver of the Spanish real estate sector. The retail, hotel, logistics and office segments received investment of €8.5 billion between January and September, according to the latest report published by Laborde-Marcet. If that pace is maintained, the tertiary real estate sector will achieve an investment figure of almost €11.3 billion by the end of 2018.

The third quarter has been the most significant of the year in terms of registered investments, with €3.8 billion in total. By segment, between July and September, retail accounted for 34% of total investment (€1.3 billion), ahead of offices, which accounted for 29% (€1.1 billion). Meanwhile, the hotel segment accounted for 24% of the market (€912 million) and logistics the remaining 13% (€494 million).

According to the study, the market is dominated by a large variety of players: private equity funds, Socimis, companies and local family offices. Despite the large presence of domestic and international capital, the investment recorded between January and September 2018 was 11.5% lower than during the same period in the previous year, a record year when real estate investment amounted to €9.6 billion.

If this trend continues until the end of the year, the Spanish tertiary real estate sector will reach a total real estate investment figure of around €11.3 billion, which would represent a decrease of 6.6% with respect to 2017 (€12.1 billion), but an increase of 1.5% with respect to 2016 (€11.1 billion).

For Gerard Marcet, the founding partner of Laborde-Marcet, “the fact that these kinds of real estate projects are happening in our country is very good news for the economy in general and for the real estate sector in particular”.

Original story: Eje Prime 

Translation: Carmel Drake

A Family Office Buys a Mixed-Use Building in Centre of Barcelona for €7M

19 April 2018 – Mis Locales

The real estate consultancy firm Laborde Marcet has brokered the sale of a building for more than €7 million in the heart of the El Raval neighbourhood, in the district of Ciutat Vella. The property, located at number 18 Carrer Sant Rafael, has been purchased by a local family office.

Completely renovated, the building comprises five commercial premises and homes spanning around 70 m2 each, most of which are furnished. The average price per square metre exceeds €3,300/m2 and the yield amounts to 3.5%.

Gerard Marcet, founding partner at Laborde Marcet, says that “these types of buildings enjoy the locations, yields and prices that fit perfectly with the objectives of many investors. They are safe assets and so they are not associated with property speculation or very high returns and risk, but rather they are suited to investors who want good stable properties that will generate fixed returns and protect their wealth against future inflation rises, given that the rents are linked to variations in CPI”.

Ciutat Vella, a district that forms part of El Raval, attracts many operations for both the purchase of buildings and the purchase and rental of commercial premises. In fact, a vast proportion of the operations brokered by the Retail team at Laborde Marcet are located in that area of the city. In this way, over the last year, the consultancy firm has advised large brands from the beauty, fashion and restaurant sectors, such as Primor, Visionario, Toni Pons, Aragaza, Celeste, Change Group, ARTEspañol and The Ranch SmokeHouse for the rental of premises in strategic areas of Ciutat Vella.

Original story: Mis Locales

Translation: Carmel Drake

Laborde Marcet: Tertiary RE Inv’t Leaps By 48% To €9,600M

13 November 2017 – Expansión

Between January and September, tertiary real estate investment amounted to €9,600 million, of which 33% corresponded to commercial properties.

Non-residential real estate investment grew by 47.7% YoY during the period, according to data from the real estate consultancy Laborde Marcet. This increase was observed across all types of assets, with growth of 36% in the case of commercial properties, which accounted for 35% of the total volume. The purchase of offices amounted to €2,688 million during the 9 months to September, up by 65.4%, whilst investment in hotels rose by 75.8% to reach €2,400 million and investment in logistics increased by 10.8% to €1,152 million.

In the specific case of the third quarter, real estate companies and investors spent €3,370 million on non-residential real estate operations, 24.4% more than in the second quarter (€2,710 million), although 4.2% less than in the first quarter, when investment exceeded €3,500 million.

If the strong performance of the first three quarters continues and as we wait to see the final impact of the sovereign challenge in Cataluña, the experts at Laborde predict that the investment volume for the full year will amount to €12,800 million, up by 15% compared to 2016.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Laborde Marcet: RE Inv’t Amounted To €6,230M In H1 2017

3 August 2017 – El Mundo

Investment in real estate amounted to €6,230 million during the first half of 2017, in terms of non-residential property, according to data published by the real estate and wealth manager Laborde Marcet.

By sector, retail accounted for 42% of the total (€2,619 million), ahead of the office sector, which represented 25.5% (€1,588 million). Meanwhile, the hotel sector accounted for 23% (€1,433 million) and logistics assets the remaining 9.5% (€590 million).

The founding partner of Laborde Marcet, Miquel Laborde, said that the real estate sector is reaching “maximum levels” in terms of the final prices of operations given that the “the difference between demand and supply causes prices to rise, although that pushes down the yield on those assets”.

During the second quarter of 2017, the figures show a QoQ decrease. In the period from April to June 2017, €2,710 million was invested in non-residential real estate operations, down by 23% compared to the first quarter of 2017, when €3,520 million was invested.

By sector, during the second quarter of 2017, retail accounted for 41.5% of the total investment (€1,124 million), followed by the office sector, which represented 26.6% (€720 million). Meanwhile, the hotel sector accounted for 24% of the total (€650 million) and the logistics sector the remaining 7.9% (€216 million). All of the sectors saw their investment figures decrease with respect to the first quarter 2017, with the exception of offices, which increased their market share by 1.9 percentage points.

If this trend continues during the second half of 2017, the tertiary real estate sector would see total investment in real estate for the year reach almost €13,000 million, which would represent an increase of 16.75% with respect to the data recorded in 2016, when investment for the year amounted to €11,134 million.

Original story: El Mundo

Translation: Carmel Drake

Rental Prices Soar & Are Now Equivalent To The Minimum Wage

2 August 2017 – El Economista

Renting a holiday home for short periods of time has become fashionable. According to data from Exceltur, the association that represents 23 of the largest companies in the tourist sector, the stock of homes available for tourist use amounted to 1.7 million at the end of last year. In other words, there is currently one tourist home for every two regulated beds. This new business, which has always existed – but which is now experiencing a boom – is being criticised in the market at the moment, since holiday homes are being blamed for the rise in residential rental prices.

According to the real estate portal Idealista, “the rise in rental prices has nothing to do with the supply of accommodation for tourists given that that is static and there is a lot of rotation in the traditional rental market”. Moreover, Idealista adds another reason to distinguish the rise in traditional rental prices from the supply of holiday homes, since “the greatest increases in rents have been registered in those neighbourhoods that are least attractive to tourists”.

Therefore, for Fernando Encinar, the co-founder and Head of Research at Idealista, “the rise in rental prices is being driven, exclusively, by the improvement in employment”. Joseba Cortázar, PR Manager Iberia at HomeAway, shares this view: “There is really no evidence to suggest that tourist homes are driving up rental prices. Prices are rising in line with the evolution of the economy”.

Regulation

On the other hand, Gerard Marcet, founding partner at Laborde Marcet, says that “it is inevitable that tourist housing will have an inflationary effect on the rental sector in Spain if it is not properly regulated. If we do not take effective measures, it is almost impossible to control what each individual does in his or her home and whether or not he or she pays tax on the accommodation services he or she offers outside of the regulatory framework.

For this reason, rental prices are rising at double-digit rates in Spain’s major cities. In Barcelona, Madrid and San Sebastián, it is no longer possible to rent a property for less than €650-€700, which is basically the minimum wage”.

Solutions

Which solutions can be introduced to regulate this market? Joseba Cortázar says that “we need public-private collaboration between the platforms and associations in the sector to better understand the phenomenon and arrive at a consensus in terms of legal regulation, but we should not demonise the sector. We have to establish an ethical code of conduct for the various platforms to adopt”.

In this sense, Gerard Marcet thinks that “on the one hand, we need to approve unique, ambitious and effective regulation to put an end to this irregular practice and that the only thing that it does is to encourage a price war and the rise of the underground economy. On the other hand, we need to grow the stock of public housing to increase the supply of homes available for rent and, whereby, deflate prices in the market, allowing people access to homes at reasonable prices, given the salaries in Spain. Finally, in cities such as Barcelona, the government should unblock the situation that the hotel sector has been immersed in since the hotel moratorium was approved”.

Original story: El Economista (by Luzmelia Torres)

Translation: Carmel Drake

The Sun Shines On Spain’s RE Estate Sector Once Again

4 May 2017 – Expansión

The Spanish real estate sector is smiling again. After years of crisis and an on-going cleanup, the main listed companies in the property sector have reported more positive figures: the earnings of these firms tripled in 2016 with respect to the previous year and their operating profit rose by 64%, driven by an increase in the number of sales and an appreciation in asset values.

Two factors are converging to generate the improvement in the real estate sector: an acceleration in the number of sales – both in the residential sector, as well as in the office and retail segments – and an increase in transaction prices and in rental costs. In 2016, 404,421 operations were registered in the housing sector, up by 13.7% compared to the previous year, but nevertheless, just over half as many as in 2007. In the same way, average house prices rose by 11% from the minimums registered in 2014, but they are still 30% cheaper than in the year prior to the burst of the real estate bubble. (…).

The combined profit of all of the companies in the RE sector – Socimis and traditional real estate companies alike – reached €1,395 million last year, compared with €407 million in 2015. In other words, their earnings tripled in just twelve months and came close to the combined profit recorded in 2007 of €1,592 million, albeit generated by very different players.

Only 29.6% (€414 million) of the total amount was generated by traditional property companies, in other words, those that managed to emerge intact from the worst years of the crisis: Colonial, Realia, Inmobiliaria del Sur, Quabit, Renta Corporación, Grupo Urbas and Montebalito. If we take into account Reyal Urbis – which filed for creditor bankruptcy in 2013 – and Neinor Homes, the latest property developer to debut on the stock market, that percentage decreases to 18.98%, in other words, €264.8 million.

Therefore, most of the profits (70.4%) were generated by activity carried out by the Socimis, which multiplied their earnings almost five-fold in one year, from €244.6 million in 2015 to €1,131 million in 2016. (…).

The tax benefits that the Socimis enjoy, their obligation to distribute dividends annually and the attractive returns they generate compared to other investment options, have boosted their number and weight in the market.

In Spain, shares in four Socimis are traded on the main stock market and together they generated a gross operating profit of €388.5 million in 2016, up by 85.4% compared to twelve months earlier (…), with the largest, Merlin, accounting for the lion’s share of that figure (€260 million).

Large family fortunes are increasingly choosing this investment vehicle in recent times. In total, 17 Socimis debuted on the stock market in 2016 and there are currently 32 companies on the Socimi-specific segment of the MAB. (…).

The future strategy for all of these entities involves rotating their non-strategic assets and specialising in non-residential segments, specifically in: offices, retail and logistics. According to a recent report form the real estate management company Laborde Marcet, Spain closed Q1 2017 with investment in non-residential real estate assets amounting to €3,520 million.

The retail sector accounted for 42.5% of that figure and whereby recovered the high profile that it had previously ceded to the office segment; hotels accounted for 22.2% and logistics assets for 10.6%. Given these proportions, the plan that Merlin has just presented (to invest €200 million over five years on the renovation of its office and shopping centre portfolio) makes sense. Hispania is also planning to sell off its offices to concentrate on its hotel business.

Original story: Expansión (by María Hernández and Víctor Martínez)

Translation: Carmel Drake

Laborde Marcet: RE Inv’t Amounted To €3,520M In Q1

19 April 2017 – Eje Prime

The retail and office segments are driving investment in the real estate sector in Spain. Real estate investment amounted to €3,520 million during the first quarter of the year, in terms of non-residential real estate assets, of which more than half were located in Madrid and Barcelona, according to the real estate consultancy firm Laborde Marcet.

By sector, retail accounted for 42.5% of investments, amounting to €1,495 million, whereby recovering the starring role that it had ceded to the office segment in recent months. Offices accounted for 24.7% of total investment (€868 million). Meanwhile, the hotel sector accounted for 22.2% of the market (€783 million) and logistics the remaining 10.6% (€374 million).

“The real estate sector is reaching exorbitant levels in terms of the final prices of operations because there is a clear mismatch between the demand that exists and the available supply” – said Miquel Laborde, Managing Partner at Laborde Marcet -; “cities such as Barcelona and Madrid have very attractive real estate assets for both real estate investment purposes, as well as for commercial objectives, but there are only a handful of assets available for the large number of domestic and overseas investors interested in acquiring them, which means that rental and purchase prices are rising and asset yields are reducing”.

In this sense, domestic investors closed four out of every ten transactions completed during the first three months of the year, which represented an increase in Spain’s weight in the non-residential real estate market with respect to 2016.

By nationality, British, US, French and German investors were the main representatives from overseas, and they were particularly active in large operations in the offices and shopping centre segments.

If investment continues in this vein for the rest of the year, the tertiary real estate sector will register a record real estate investment figure of €14,000 million, which would represent an increase of 21.7% with respect to the data obtained in 2015 and of 25.8% with respect to 2016.

Original story: Eje Prime

Translation: Carmel Drake

Quonia Buys Mixed-Use Property In La Barceloneta For €7M

31 March 2017 – Eje Prime

The Socimi party in Spain is still raging. As the undisputed stars of the real estate sector over the last two years, these companies are still fattening up their asset portfolios and valuations through acquisitions. Such is the case of the Catalan firm Quonia, which after acquiring a property in one of the best area of La Barceloneta in the Catalan capital, has increased its valuation by 12% to €72 million, according to the annual accounts filed by the company.

The most recent asset acquired by Quonia, a vehicle managed externally by Rusiton XXI, a specialist real estate fund manager with extensive financial experience, is a property at number 60 on Passeig Joan de Borbó, in La Barceloneta, one of the most touristic areas in the Catalan capital, for €7 million.

The property comprises three commercial premises on the ground floor, which are currently occupied by the classic restaurant Can Manel, which has now closed its doors and which is going to be occupied by the Degus group, in an operation brokered by the real estate consultancy firm Laborde Marcet, according to sources in the sector.

The building also contains six homes on the first and second floors, and a terrace on the third floor. The gross leasable area amounts to approximately 1,658 m2, split into tertiary use (815 m2) and residential use (843 m2) which, according to sources close to the operation, will soon be subjected to a comprehensive renovation.

Following this acquisition, Quonia’s portfolio now comprises six assets, located in Barcelona, Asturias and Sevilla. The Socimi debuted on the Alternative Investment Market (MAB) in July 2016 (…).

In terms of Quonia’s management team, the role of CEO is held by Enric Pérez Más, an executive who is closely linked to the investment business in Spain. The director has held senior management positions in groups such as AMCI, Habitat and Investmex, amongst others. The Socimi’s Board of Directors also comprises Alicia Solares, Ana Marías Saucedo, José Luis Llamas, Mayra Hernández and José Luis Rodríguez.

Original story: Eje Prime

Translation: Carmel Drake

British Investors Buy Up Entire Residential Buildings In Barcelona

7 December 2016 – La Vanguardia

They used to own a flat in a good location in the centre of London. They sold it and with the profits they bought an entire four-storey building in Barcelona. That is the story of a British family, which has become the new owner of number 68 on Calle Hospital in the heart of the Raval neighbourhood. The property, constructed more than a century ago, needs to be completely renovated. Once that has been done, the four floors will be put on the market for rent, whereby benefitting from the current market of rising prices and within a few years, the owners will sell the property.

That is how British families with investment potential are managing to generate guaranteed returns from real estate assets. A property like the one on Calle Hospital costs around €1 million. After the renovation, the rental income is unlikely to fall below €1,000/month. Such properties can be sold subsequently for more than €1.5 million, at least.

This real estate “play” is not a unique case. The consultancy firm Aguirre Newman has closed the sale of two buildings in Eixample to a British investor group within the last few weeks. “The property is in a bad condition, but they will take care of the renovation, and then put it up for sale straight away”, explained Anna Gener, Director General of the firm in Barcelona.

Over the last year, Brits have realised that Barcelona offers them high returns, regardless of whether they buy or rent. “Brexit has meant that there are increasingly more investors who are interested in buying assets here”, said Albert Sarrias, Commercial Director at Engel&Völkers in Barcelona, although he recognised that “we will only see the real effects in the long term, for the moment, they are browsing more than they are buying”.

By contrast, for Miquel Laborde, owner of the real estate management company Laborde Marcet, the divorce between the UK and the EU is not the driver behind the latest phenomenon. “It is a simple matter of returns. British investors can earn more money here from investing and selling than they can in London”. The reason, beyond any fluctuations in the euro-sterling exchange rate, is that prices in the residential sector in the British capital are at historical highs and they seem to be peaking. The price per square metre of a new home in the centre of the British capital ranges between €10,000/m2 and €15,000/m2. (…).

17.66% of house sales to foreigners in Spain are made to Brits, according to data from the College of Registrars. They are followed, at a considerable distance, by wealthy French, German, Swedish and Belgian investors.

These types of operations in the residential sector are mainly concentrated in the centre of Barcelona Raval, Born and Eixample are the preferred locations although the real estate agents lament the limited supply of products on the market. (…).

Small investors prefer to put their money in the residential sector. Offices and buildings, measuring more than 5,000 m2, generate more rental income but only Socimis and large investment funds can afford them. (…).

Original story: La Vanguardia

Translation: Carmel Drake

24 New Shopping Centres Will Open In Spain By 2020

15 September 2016 – Inmodiario

The shopping centre sector grew by 2% during the first 6 months of 2016 in Spain, which can expect to see 24 new centres opening over the next 3 years. In this sense, the shopping centre market will gain 100,000 sqm in additional space in 2017 alone. Moreover, Spain was the second placed country in Europe in terms of visitor number growth to shopping centres during the second quarter of the year, with an increase of 1.1%, behind only Switzerland, with a rise of 1.8%.

“Shopping centres are the main benchmark in the retail sector in Spain, which means that it is crucial that they follow a gradual increasing trend, and that that is in line with the rest of the sector”, said Gerard Marcet, the founding partner of Laborde Marcet, a company that manages real estate investments.

The shopping centre sector comprises up to 549 facilities and 84% of premises have a surface area of less than 300 sqm. The sector generated 330,000 new jobs in 2015, when it managed to increase sales by 6.3% compared to 2014, and reach the €41,000 million threshold. In fact, shopping centres account for 18% of the retail sector (by market share) in Spain.

Investment in the shopping centre sector in Spain amounted to €1,900 million in 2015, meanwhile investment in non-residential retail real estate assets amounted to €3,050 million, compared to €1,848 million in 2014. During the first half of this year, the figure amounted to €1,120 million, i.e. 32% of the total.

In this sense, it is worth noting that US private equity funds accounted for 22% of the transactions involving shopping centres in Spain.

Original story: Inmodiario

Translation: Carmel Drake