CBRE: RE Investment Grows By 51% To €5,264M In H1 2015

6 July 2015 – Expansión

Five star hotels, commercial premises on the country’s most iconic streets, large shopping centres and office buildings. All of these assets have changed hands in recent months in the Spanish real estate market, which has been extremely active in recent months.

Between January and June, real estate investment (which includes offices, shopping centres and retail premises, logistics warehouses, hotels and residential assets) amounted to €5,264 million, according to the consultancy CBRE. That figure soars to €8,434 million if we include the purchase of the real estate company Testa by the Socimi Merlin Properties.

The amount represents an increase of 51% compared with the first half of 2014, a figure that itself represented a two-fold increase with respect the previous year. Thus, total investment during the first half of the year increased from €697 million in 2012 to €1,455 million in 2013, to €3,475 million last year and to more than €5,200 million in 2015, according to CBRE. (…).

By quarter, the volume invested in the second quarter (from April to June) was slightly lower than during the first quarter: €2,337 million compared with €2,928 million. “The decrease in the second quarter was due to the fact that some transactions were delayed and also because some very large deals were closed during the first quarter, including Gran Vía 32 and Plenilunio”, explains Paloma Relinque, Investment Director at CBRE.

By asset type, offices and retail assets (both large shopping centres, as well as shops on the main streets of Madrid and Barcelona) have featured in the largest deals. In the case of offices, highlights include the sale of Ahorro Corporación and Sareb’s headquarters on Castellana 89 (Madrid) to the March family for €147 million. In terms of retail premises, in April, the insurance company Axa paid €308 million to the Socimi Uro Property for 400 Banco Santander branches.

There have also been important transactions in the hotel sector, including the sale of the Hotel Ritz, which was transferred for €130 million. (…).

Types of investors

Although the investment growth trend seen in 2014 was repeated during the first half of 2015, there was a change in the mix of investors by nationality. Whilst at the beginning of last year, the more opportunistic US funds accounted for 53% of transactions, compared with British and German funds, which accounted for 5% and 1% of deal respectively; during the first half of 2015, US funds accounted for just 21% of total volumes, whilst investors from the UK accounted for 22% of deals, followed by Canadian funds (9%) and German funds (6%), according to CBRE.

Moreover, the Socimis Lar España, Merlin Properties, Hispania and Axiare are still the major players in the market for real estate investment. “The Socimis are performing very well, which is great for the sector because they purchase office buildings, for example, to refurbish them and add value, which improves the real estate stock”, says Lola Martínez, Director of Analysis and Investment Strategies at CBRE.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Savills: Bumper Crop Of RE Mega-Transactions In 2015

27 May 2015 – Cinco Días

Sales amounted to €1,340 million during the first three months of 2015.

“Lots of investors are interested in Spain” say Savills.

2015 is going to be a bumper crop year for large real estate transactions. Given the lethargy in the market in recent years, due to the economic crisis and lack of financing, the non-residential sector is experiencing the start of a new golden age. Investors do not want to miss out on the emerging recovery in the sector and showing their commitment to Spain.

Mega-transactions in Spain increased fivefold during the first quarter of the year with respect to the same period in the previous year, according to a report from the real estate consultancy Savills. During the first three months, these acquisitions (those over €100 million) amounted to €1,340 million and involved four purchases.

These large transactions accounted for 60% of all transactions. With respect to all types of transactions in the tertiary sector (including small deals as well), Spain is ranked fourth in terms of the increase in investment volume in the European market, which is led by the United Kingdom and Germany. This segment includes office buildings, retail stores, shopping centres, hotels, as well as logistics and industrial warehouses.

The largest transaction at the beginning of the year in Spain was the sale of the Puerto Venecia shopping centre for €451 million, which was purchased by the British company Intu Properties. That was followed by the purchase of the Madrid building at Gran Vía, 32, which houses shops such as H&M and Primark (from Autumn 2015), for €400 million. In that case, the purchaser was Pontegadea, the family office of Amancio Ortega, owner of Inditex, and the vendors were various investors led by the fund Drago Capital.

The third transaction was the sale of the Plenilunio shopping centre, for €375 million, purchased by Klepierre, the French store management company, from Orion Capital. Finally, in fourth place was General Electric’s real estate portfolio, which was sold to the fund Meridia for €120 million.

Better prices than in London and Paris

“Lots of investors are interested in Spain. Change is apace in the country and moreover, in other markets, such as in Paris and London, assets are more expensive. Private equity firms are now focusing on Southern Europe. Spain is the best candidate because a change in the cycle has begun and prices are still attractive”, says Luis Espadas, Director of Capital Markets at Savills.

Spain also benefits from the macroeconomic conditions in the market. The prospects for growth are positive in Europe, given the low oil prices, the injection of liquidity by the European Central Bank and the depreciation in the euro against the dollar, highlights the report. In fact, the volume of investment in commercial assets amounted to €49,700 million during the first three months on the European Continent, i.e. 38% higher than the average of the last five years.

“One of the factors that is making Spain more attractive is the price of assets, which are 40% lower than before the crisis. In other markets, prices are already very high. Moreover, the banks have started financing transactions again”, says Espadas. This report from the consulting firm predates the results of the municipal and regional elections and therefore the effect that the electoral swing to the left will have on institutions is unknown. With an exceptionally good start to 2015, the trend seen last year continues, when the record for this type of sales was broken, with transactions worth more than €7,000 million, a level not reached since 2008. “The arrival of Socimis (Listed real estate investment companies) has been one of the main factors driving this improvement in the market” says the report.

In Europe, the growth of these mega-transactions increased by 18% with respect to the first quarter of 2014. Investors in the UK, USA and Germany accounted for 62% of movements. The largest transaction in the sector was the purchase of a portfolio of student residences (halls) in the UK, for which the Canadian pension fund CPPIB paid €1,500 million. It was followed by the acquisition of Corio’s shopping centres in France following its merger with Klepierre. In Italy, the sovereign fund Qatar Holdings paid €1,000 million to the property developer Hines and the insurance company UnipolSai for 60% of the financial district Porta Nuova in Milan.

“Given the low interest rates and the ECB’s purchase program, real estate demand is going to continue to grow and volumes are expected to reach or exceed the levels seen in recent years, especially in the strongest markets such as Germany and France and those that are recovering, such as Spain, Ireland and Holland, says the report from Savills.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Cushman & Wakefield Secured Market Share Of 54% In 2014

12 February 2015 – Expansión

The property consultants Cushman & Wakefield brokered 59% of the largest transactions in the Spanish market in 2014. The CEO in Spain, Oriol Barrachina, believes that the increasing trend in investments will continue in 2015.

Original story: Expansión

Translation: Carmel Drake