Primark to Open a Megastore in Barcelona’s Plaza Cataluña

12 July 2018 – Idealista

Primark is finally entering the centre of Barcelona. The low-cost fashion company is going to open a flagship store at number 23 Plaza Cataluña, in a building owned by the fund manager IBA Capital, according to confirmation from real estate sources speaking to Idealista News. Until now, the property has been occupied by the El Corte Inglés department store group, but now the Irish chain is going to take over the 7,393 m2 property.

IBA Capital acquired the building in 2013 for €100 million and, over the last six months, since it has been on the market, the asset has attracted attention from the main fashion groups in Europe, including H&M, Primark, Inditex and the Japanese firm Uniqlo.

The building has a gross leasable area of 7,393 m2 and is located at the junction of Plaza Cataluña and Las Ramblas, one of the new commercial thoroughfares in Barcelona following the opening of establishments by the Galician giant Inditex there, as well as by operators such as Mango, Apple and Urban Outfitters.

The building was leased in its entirety to El Corte Inglés until a few months ago, which operated it through a multi-brand concept with firms such as Gap, Tommy Hilfiger, Guess, Diesel, Maje, Sandro, Stefanel and Desigual.

The property was renovated in 1998 and used to house the former headquarters of Banco Central and one of the only stores that the British firm Marks&Spencer used to have in Spain. Following the purchase by IBA Capital, El Corte Inglés and the fund signed a sale and leaseback contract, which expired in 2018.

IBA Capital in the Spanish market

Founded in 2013, IBA is led by Thierry Julienne and Jesús Valderrama, the founders of the investment vehicle. The fund manager has the capacity to manage all classes of real estate assets and its portfolio is currently worth €1 billion.

The portfolio comprises more than a dozen assets situated in first-rate locations in Madrid and Barcelona. Its properties include number 18 Gran Vía, number 9 Preciados and the ABC Serrano shopping centre, which have been acquired for subsequent renovation.

The other assets are office buildings including the property at number 96 Calle Santiago de Compostela, in Madrid and the Tripark Business Park, in las Rozas. Moreover, the fund owns the Vodafone Building, located at number 115 Avenida de América, and the Manoteras Leisure Park, also in the Spanish capital.

Original story: Idealista (by Custodio Pareja)

Translation: Carmel Drake

Airbnb, HomeAway & Wimdu Outperform Traditional Long-Term Lets

23 February 2017 – El Confidencial

Traditional rental agreements (…), which are governed in Spain by the Urban Rental Act (LAU) and which allow a tenant to live in a home for an extended period of time, are starting to become scarce in some very specific areas of large cities such as Madrid and Barcelona. They are falling victim to the unstoppable progress of so-called tourist apartments or short-stay lets (available on a daily, weekly or monthly basis), which have grown like wildfire in recent years, thanks to the development of platforms such as Airbnb, HomeAway, Wimdu, Niumba, Rentalia and Booking.

Users consider that these assets offer a much more flexible and economic alternative than the product offered by the hotel sector. Meanwhile, homeowners have found a business niche and are generating extra income both from their own homes and from properties acquired as investments. Moreover, their yields are ranging between 4% and 8%, which is well above those offered by other traditional investment products at the moment, including traditional rental properties.

To give us an idea of the volumes being handled by these types of platforms, Airbnb has 13,000 online adverts in the city of Madrid, whilst Idealista has 8,700 adverts for rental homes. In Barcelona, the online platform has 20,000 adverts compared with 6,400 on the real estate portal.

Nevertheless, the problem is limited to very specific locations, such as Malasaña and Chueca in Madrid and Las Ramblas and El L’Eixample in Barcelona. There it is almost impossible to find a long-term rental home. As such, the few products that do come onto the market are leased in a matter of hours and at much higher prices than they were just a couple of years ago. (…).

Rental prices in Malasaña now rarely fall below €800 for a one-bedroom flat measuring just 40m2, but on average, homes there cost between €1,200 and €1,300 per month. On the real estate portal Idealista, there are a few 60m2 flats for rent, for which the owners are asking €2,700/month and even €3,500/month for luxury properties.

Emergence of individual investors

Airbnb defends the “home-sharing” concept, saying that it does not remove available housing from the market because people who live in these homes are still around, they are just sharing their primary residences. Some of these people are using the money to pay for their housing costs”, says the platform. “Studies have been carried out in several cities around the world, showing that the number of homes advertised on Airbnb for exclusively professional use is too low to have any impact on the housing market”.

Nevertheless, the high returns offered by tourist apartments have led many individuals and small-time investors to buy homes in these areas, to subsequently sell them or rent them to tourists. Specifically, individual investors are behind 3 out of every 10 house sales in Madrid, according to data from Tecnocasa. (…).

A very localised phenomenon

What is happening in Malasaña is also being seen on some other very specific streets both in Madrid and Barcelona, where rental prices have really soared. According to Urban Data Analytics, rental prices have risen by more than 20% in neighbourhoods such as Sant Andreu and Sants-Montjuïc, and by 15% in areas such as Gràcia, where prices decreased slightly during the crisis. (…).

According to Bankinter, in its latest report about the Spanish residential sector, these price increases will not last forever. “In our opinion, these double-digit increases, which are driven by a shortage of supply and the boom in tourist rentals, will not last in the long term, nor will they spread to the market as a whole, especially if new legislation is introduced to limit the number of tourist homes a given owner may rent out”.

Sources at Airbnb insist that “The increases in house and rental prices are due to normal factors at play in the real estate market, including: the high demand to live in cities, the appeal of real estate as investment property, the lack of space to build new developments…also, the pressure on house prices is not just being seen in Barcelona, it is happening in all of the large cities around the world (….). House prices were rising before Airbnb ever existed (…)”.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Madrid & Barcelona Renew Their Main Thoroughfares

5 September 2016 – Expansión

Total investment of €900 million / Investment in retail assets at street level doubled to reach record levels in 2015. Pontegadea’s purchase of the building located on Gran Vía, 32 for €400 million accounted for 40% of total investment. Spain is still in the Top 10 target markets for large fashion operators.

The busiest, most touristic and sought-after streets in Madrid and Barcelona, such as Gran Vía and Las Ramblas, have always been an object of desire for the major players in the restaurant and leisure sector; and, for several years now, they have also been attracting the attention of the major fashion chains, which are choosing to showcase their flagship stores on these avenues.

The high footfall rates on these central streets make them the perfect target for housing the flagship stores of major fashion and accessories brands and, in exchange, these historical avenues have renewed their offer and rejuvenated their image.

In parallel, and in line with the rise of the flagship stores, the retail sector has experienced a general increase in the sale and purchase of large premises. Specifically, more than twenty new international brands arrived in Spain in 2015, of which 60% chose Madrid to open their first store and 32% opted for Barcelona, according to a report prepared by CBRE. As such, in 2016, Spain continues to rank in the top ten target markets for major international companies.

The next major brand expected to arrive in Spain is the Japanese fashion chain Uniqlo. It will begin by opening a flagship store in Barcelona, however, the Asian group is also looking for premises in Madrid. Other firms that have expressed an interest in entering the Spanish market include the Italian brands Terranova and OVS.

Overall, investment in the high street (retail assets at street level) broke records last year, with €900 million invested, twice as much as in the previous year, largely fuelled by Pontegadea’s purchase of the building that Primark now occupies on Gran Vía, 32, for €400 million. That operation alone accounted for 40% of total investment.

In Barcelona, the lack of available supply meant that investment in the high street was not as intense and sales mainly involved mix-used buildings, with a retail component, such as Diagonal 490 and the historical Torre Muñoz, in Fontanella.

The strong demand and shortage of availability in terms of prime supply have caused yields to decrease, to around 3.5% for the best products, in both Madrid and Barcelona. Nevertheless, according to CBRE, that figure is above those reported in other European cities such as London and Paris.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Quonia Buys Hotel Internacional In Barcelona For €11.25M

19 July 2016 – La Vanguardia

(…). The Catalan Socimi Quonia, which debuted on the Alternative Investment Market (MAB) on Monday, has acquired Hotel Internacional, located on Las Ramblas, 78-80, in Barcelona, for €11.25 million from the hotel group Husa, owned by the businessman Joan Gaspart.

In a statement, Quonia reported that the price includes the purchase of the property and its operating licence, and that the transaction has been advised by the firm Laborde Marcet. This hotel has a leasable surface area of 1,915 sqm; its upper floors are leased for hotel use, whilst its ground floor houses retail premises. The property was one of Husa’s last real estate assets in Barcelona, which is undergoing a major restructuring after emerging from complex bankruptcy proceedings.

Quonia debuted on the MAB on Monday at a price of €1.65 per share, which represents a market capitalisation for the company of €41.97 million. The Socimi holds a portfolio comprising properties leased for residential and commercial use located in Barcelona, Sevilla and Langreo (Asturias), with a total approximate gross leasable area (GLA) of 12,197 sqm, excluding one ground-level car park with 50 spaces and another underground car park with 93 spaces. (…).

Original story: La Vanguardia

Translation: Carmel Drake