Telefónica To Lease Out 1 Building At Its Las Tablas HQ In Madrid

30 April 2017 – El Confidencial

A year after taking over the Presidency at Telefónica, José María Álvarez-Pallete (pictured above) now has the telecoms operator’s first major real estate operation on his desk: the rental of one of the 13 buildings at the entity’s Madrid headquarters, specifically, the complex known as District C.

The company has launched a tender process with the country’s main real estate consultancy firms, with the aim of selecting one of them to find a new tenant for the North 3 Building. All interested parties should submit their bids within the next few days, given that the operator has asked for them to submit their projects after Easter. (…).

With this tender, Telefónica confirmed the rumours that have been circling for a while, which were further fuelled when the operator’s employees vacated the North 2 and 3 Buildings. The properties are located in one of the corners of the main face of the complex. Almost 10,000 people work at the headquarters on a daily basis.

In the end, after considering various options – ranging from organising a kind of small Silicon Valley for startups to selling the building – the team led by Álvarez-Pallete has opted to rent out at least one of its properties. And this option promises to receive interest in the market, given that in the past, commentators have speculated about the possibility of companies such as L’Oreal and Huawei being interested in moving their headquarters there, and which moves the group away from the possibility of selling the entire complex.

The option of Telefónica selling District C has been on the cards for several years – the idea was that it would remain as the tenant with a long-term contract, in order to obtain a sizeable cheque with which to reduce its significant debt balance. In fact, many funds have called at its door, but with offers that have always fallen well below the company’s €3,000 million asking price.

In addition, the new accounting legislation that, from 1 January 2019 onwards, will oblige firms to account for rental commitments as debt, means that any kind of “sale & leaseback” operations that the firm may have been considering under the prism of reducing its financial commitments would be significantly less attractive.

Located in the Madrilenian neighbourhood of Las Tablas, District C opened its doors a decade ago, after Telefónica took the decision to bring together all of its employees in Madrid in a single headquarters. Previously, they had been distributed across around thirty buildings.

Although the option of building a skyscraper was initially proposed, in the end, a horizontal design was chosen by the architect Rafael de la Hoz, with independent, but perfectly connected buildings within a single district. From there emerged what is popularly known as District C – the Communications District – although its official name has been the Telefónica District for over six years.

The complex has a total constructed surface area of 370,000 m2 and more than half, 180,000 m2, corresponds to the 13 existing office buildings: four of those, located at the corners have ten storeys each; another four have four storeys; four more have three storeys, whilst the main building, in the centre, has a surface area of 16,480 m2.

In addition, District C has 20,000 m2 of space dedicated to all types of auxiliary services, from a children’s nursery to shops; 130,000 m2 of space comprising open areas and gardens; and 5,000 parking spaces.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Ebrosa Buys Ministry Of Defence’s Last Auctioned Plot In Madrid

9 February 2017 – Expansión

The Ministry of Defence is continuing with its real estate divestment plan. Its last major sale was completed yesterday with the sale of an urban use plot that has a surface area of 3,569 m2 and a buildable surface area of 9,865 m2. The plot is located in the former central park of the engineers in Villaverde, in the neighbourhood of Los Angeles, in the south east of Madrid.

Like in the case of the Administration’s other assets, the sale has been conducted through a public auction, which was publicised through the real estate portfolio addmeet. Specifically, the Ministry of Defence had planned to carry out two simultaneous auctions, for an initial asking price of €4.7 million (in the first round of bidding) and a second asking price of €4.28 million (in the second round). In the end, the second round was not necessary as the initial bids exceeded the initial asking price, and the plot was awarded to the real estate company Ebrosa, which bid €5.04 million.

This Zaragoza-based property developer will use the land, for which planning permission has already been granted, to build a block of flats similar to those projects that it is already developing in other areas of Madrid, such as in Las Tablas and Sanchinarro, in the north east of the city, as well as in Ensanche de Vallecas.

Ebrosa’s new development will be located next to “residential developments that are being sold at a good rate”, according to information included in the addmeet advert. Specifically, one hundred homes that Inmoglacial is promoting together with the investment fund Aquila Capital, in the same central park of the engineers in Vallaverde, after it was awarded nine plots of land from Sepes in July 2015, covering a buildable surface area of 120,000 m2. That project, which is being completed in nine phases, involves a total investment of almost €200 million to construct more than 1,200 homes, whose first phase is due to be completed in the spring of 2017.

According to the most recent annual accounts, corresponding to 2015, Ebrosa generated a profit of €31.38 million, compared with €4 million the year before, from a turnover of €16.68 million.

Divestment plan

The sale of the plot in the neighbourhood of Los Angeles was included in the real estate asset sales plan that the Ministry of Defence launched in 2013, with the aim of divesting some of its land, premises, rural estates and homes.

The most high profile sales in this plan include the sale of the former Precisión Workshop, located on Calle Raimundo Fernández Villaverde, next to Paseo de la Castellana and Nuevos Ministerios. In November 2014, the Ministry of Defence awarded those unused plots to the housing manager Domo for €111 million, which acquired them with the aim of constructing a 320-home development on the site, with an average price of €325,000.

Currently, the Ministry of Defence has two other plots of land up for sale, in Alcalá de Henares and in the Campamento area. The latter, whose sales price has not been revealed, is one of the most attractive sites for construction in the capital, given its location, between the Somosaguas area and the former land of Campamento, whose sale is also being considered by the Ministry.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Axiare Buys Office Building In Madrid For €41.5M

24 January 2017 – Idealista

Axiare Patrimonio has completed its first purchase of the year: an office building, which is leased out to the Peugeot Citroën Group in Madrid, for €41.5 million. The automobile firm will continue as the tenant of the building until 2026. Axiare’s portfolio of properties is valued at more than €1,300 million.

This office building, which was completed in 2011, is located in Las Tablas, Madrid, close to properties such as the headquarters of BBVA, Telefónica, Philips and Renault. The building has a gross leasable area (GLA) of 9,280 m2 and 306 internal and 64 external parking spaces. It also has access to the A-1 motorway and links to the M-30 and M-40 ring roads.

For the operation, Axiare Patrimonio received legal advice from EY, technical advice from CBRE, and commercial advice from Cushman & Wakefield and CBRE.

Original story: Idealista

Translation: Carmel Drake

Merlin Buys Adequa Business Park From Lone Star For €380M

3 October 2016 – Real Estate Press

On Friday, Merlin Properties confirmed its purchase of the Adequa business park, located in the Las Tablas area in the north east of Madrid. The operation has been advised by Knight Frank and JLL.

The complex has belonged to Lone Star since 2015 which purchased it by foreclosing a debt with Bami amounting to €630 million.

Adequa, opened in 2007, is a complex covering more than 107,000 sqm spread across several buildings. The complex houses the headquarters of the group Técnicas Reunidas and the automobile company Renault. In addition, there is a plot of land for the development of two other buildings, including a 24-storey tower with a surface area of 29,000 sqm.

Through this acquisition, Merlin Properties has increased its presence in the area, where it already owns five office buildings, purchased in October 2014, for €130 million, which house the headquarters of Vesta, Neoris and Philips, amongst others. Similarly, Merlin acquired a plot of land measuring 16,000 sqm, where it is currently constructing an office block.

As at 30 June 2016, Merlin’s office portfolio comprised 584,969 sqm of space, worth €2,337.7 million. This portfolio has multiplied following the Socimi’s merger with Metrovacesa, approved on 15 September 2016. Thus, the new Merlin has an office portfolio that contains 84 properties with a surface area covering more than 1 million sqm and is worth €4,172 million.

In the north of Madrid, Metrovacesa owns the Las Tablas business park, which contains more than 27,000 sqm of office space and another complex, Vía Norte, covering 38,000 sqm.

Original story: Real Estate Press

Translation: Carmel Drake

Oncisa Sells A Plot Of Land In Madrid To Ibosa For €30M

19 September 2016 – Real Estate Press

The land, which is located in the triangle between the M-11, the A-1 and Avenida de Manoteras, has a surface area of 7,000 sqm and a buildable area of 17,000 sqm. Ibosa is willing to pay €30 million for the plot.

Ibosa plans to construct a 75m tall 20-storey tower on this land, as well as two blocks of flats that will contain more than 130 homes.

In this way, Oncisa has liquidated all of its land on Isla Chamartín, where, in 2011, it sold another plot to Levitt for €27.5 million. That was subsequently acquired by Merlin Properties, which has recently started to construct an office block on the site, due to be completed during the first half of 2018.

The land is attractive due to its proximity to the city’s financial district as well as to the services in some very established neighbourhoods, such as Pinar del Rey and the PAUs of Sanchinarro and Las Tablas, where the supply of new homes and land is practically non-existent.

The operation, which according to market sources has been brokered by CBRE, is proof once more of the renewed investor and property developer appetite for well-appointed plots of land in areas where demand for housing is strong. In fact, it is one of the most important land transactions in the market in recent months and the most significant so far this year.

This project will represent a boost for the area, which is in the middle of a recovery in terms of both sales and prices. It is an area where there is a shortage of product and which is free from the urban planning and legal problems that are burdening its neighbour Valdebebas.

Original story: Real Estate Press

Translation: Carmel Drake

GMP Socimi Finalises Its Debut On The Stock Exchange

17 May 2016 – El Confidencial

One of Spain’s largest real estate groups is about to list on the stock exchange. GMP Socimi, the company jointly owned by the Montoro family (70%) and the Government of Singapore (30%), now has all the pieces in place for its stock market debut.

To this end, the company has engaged the entity Renta 4 as registered advisor and has commissioned CBRE to value its assets, according to sources familiar with the company.

The debut on the stock market is a mandatory requirement for GMP, which was constituted as a Socimi in October 2014. The rules for this type of company grants a maximum period of two years to become a listed company. In fact, this rule has been behind all of the recent debuts of such companies on the MAB.

In parallel with its stock market listing, the real estate company has been negotiating with its creditor entities to secure the refinancing of its financial commitments, which exceed €750 million, according to its accounts for 2014, the most recent year for which figures are available, and the majority of its debt is due to mature in 2017.

Although the gross value of the company’s assets amount to €1,300 million, the company was valued at just over €600 million two years ago, when the Singapore sovereign fund, GIC, acquired its 30% stake for €200 million.

Nevertheless, it was precisely the involvement of the Asian giant that allowed the Montoro family to adjust its financial situation and secure the necessary financing to sign operations such as the purchase of Castellana 77. All of this, combined with the recovery of the real estate market means that the group’s next valuation is expected to be much higher than the amount assigned by GIC at the time of its investment.

The Montoro family’s Socimi has been one of the great survivors of the crisis and its buildings include the iconic Torre BBVA on Paseo de la Castellana, as well as the property on Calle Génova, 27.

Since GIC became a shareholder, the company has handled operations such as the aforementioned purchase of Castellana 77 for €90 million; the former headquarters of Altadis, on the Madrilenian Calle Eloy Gonzalo, for €30 million; the office building located on Condesa de Venadito 1; the headquarters of Cortefiel and SGS in Madrid; and the development of a corporate building in Las Tablas.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Lone Star Puts Adequa Business Park Up For Sale

6 May 2016 – Cinco Días

The US fund Lone Star is going to put the Adequa business park up for sale, which it acquired after taking on the debt of the inactive real estate company Bami Newco. Adequa will be put on the market within the next few weeks and will be marketed by the brokers Knight Frank and JLL.

These consultancy firms received the exclusive joint-mandate to handle the sales process, which will be presented to a small group of investors only.

Adequa is one of the largest business parks in Spain. It has a total surface area of 120,813 sqm and contains six office buildings, as well as a service centre with commercial space measuring 5,013 sqm, including a gym, restaurants, a pharmacy, a nursery and three padel courts. The park is located next to the A-1 highway, in the new neighbourhood of Las Tablas.

This business park is home to the headquarters of Renault in Spain, for xample. Moreover, construction is on-going at the site, to build a new space, measuring 44,885 sqm, which will be divided into two buildings, one of which will be a central tower with office space covering 29,095 sqm.

Bami Newco, the real estate company controlled by Joaquín Rivero following his departure from Metrovacesa, filed for liquidation last year, at the company’s own request under the Bankruptcy Law, with debts amounting to €652 million. At that time, the assets, basically the business park itself, were worth €726 million.

Original story: Cinco Días (by A.S.)

Translation: Carmel Drake

Cogesa Paid c. €2,200/m2 For The Final Plots In Montecarmelo

25 September 2015 – El Confidencial

Some people regard it as an Urban Planning Action Plan (‘Programa de Actuación Urbanística’ or Pau) for “rich people” only. But, Montecarmelo, the smallest of the three new neighbourhoods in the north of Madrid – together with Sanchinarro and Las Tablas – has become the talk of the sector. And it is no wonder. The neighbourhood has starred in the most expensive land operation to be closed since the burst of the real estate bubble, and although it did not trigger alarm bells per se, it did raise concern amongst the main players in the market, for whom the memories of the worst excesses undertaken during the boom are still fresh and vivid.

Less than three months ago, at the beginning of July, the company Cogesa, which forms part of Grupo Dragados and is led by Enrique Pérez, the brother of Florentino Pérez (the President of Real Madrid Football Club), paid an “exorbitant” amount for the final few residential plots in Montecarmelo. Specifically, Cogesa paid just under €2,200/m2 for the land, i.e. significantly more than the figure (€1,400/m2 – €1,500/m2) the experts consulted by this newspaper consider should have been paid for the launch of a profitable development, unless, of course, it is developed as a cooperative.

Montecarmelo, which is located next to Monte del Pardo, the Colmenar motorway and the M-40 ring-road, was conceived at the beginning of the 1990s. With more than half a million square metres of land allocated for residential use – 8,500 homes, both unsubsidised and subsidised – it became the destination of choice for hundreds of young couples who saw the neighbourhood as a good place to live that allowed them to travel into the city centre each day to work. It was born as a commuter town (neighbourhood), just like Sanchinarro and Las Tablas, but is now witnessing the “overheating”  of land prices that seems to be happening once again. (…).

Knight Frank…estimates that there is only around 50,000 m2 of buildable space left in the development, i.e. 5% of the total, since the remaining 95% is under construction or has already been built. (…).

Cogesa’s bid took the other participants in the tender completely by surprise: Construcciones Amenabar and Grupo CP, two companies that have been involved in previous projects, as well as Momentum and the cooperative DMS have said as much…none of the other offers even came close to the figure that was put on the table by the Grupo Dragados’ company, to acquire the last large plot for sale in Montecarmelo. The company already has a presence in the neighbourhood, with around one thousand homes in several developments. At one of them, Las Terrazas de Montecarmela, the company has been selling homes for just under €3,000/m2.

“Cogesa already has interests there. It owns several plots, which means that by paying the amount it has done for this plot, it has also increased the value of its own portfolio there” says an expert consulted by this newspaper. (…).

However, the most recent land operations are raising concerns that the segment is “overheating”. In fact, the numbers do not add up for some developers. “A those prices, they would have to sell the homes for more than €3,500/m2, and not only is it going to be difficult to find buyers willing to pay that much, the figure also leaves minimal scope for profit. A logical price would have been €1,400/m2-€1,500/m2, because even if the cost of the land attributable to the final price of the homes was 50%, they could be sold at €3,000/m2 and not lose money”, explains a source at one developer, who prefers to remain anonymous.

“At these prices, the only thing that would make sense is a development on a cooperative basis, a formula that this company has adopted in the past. The developers need to make a profit of between 15% and 20%, however, in a cooperative, the manager does not earn any more than 10% and the risk is diluted amongst the cooperative”, says Ernesto Tarazona, Partner and Director of Residential Property and Land at Knight Frank, who believes that the lack of supply in the area benefits any project that is undertaken in Montecarmelo. (…).

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

Azca & Diagonal: The Most Sought-After Office Space In Spain

17 July 2015 – Expansión

According to the consultancy firm JLL, the scarce supply and improving economy will cause office rental prices in Madrid and Barcelona to rise by more than anywhere else in the EMEA region over the next five years.

Specifically, the consultancy expects that office rents will rise in Madrid by 6.2% each year on average, from €25/m2/month in 2014 to €34.5/m2/ month in 2019. Meanwhile, rents in Barcelona will increase by 5.3% per year, to €23/m2/ month by the end of 2019. The highest rents will be seen in the prime areas, i.e. in the central business districts: Azca in Madrid and Avenida Diagonal (between Francesc Macia and Maria Cristina) in Barcelona.

In fact (…) prices in Barcelona will not only rise on Diagonal, they will also increase on Paseo de Gracia. Overall, rents increased by 6% in Q2 2015 in Barcelona, to reach €19/m2/month on average in those two areas.

According to JLL, only 15,000 m2 of office space is currently available on the best section of Diagonal, out of a stock of around 275,000 m2 in that area, which represents an availability rate of around 5%, a figure not seen since 2008.

In fact, between 2010 and 2011, large companies such as Axa, Unilever and KPMG decided to leave the business district and move to more peripheral areas. Axa left ‘La Illa’ to move to WTC Almeda Park in Cornella, where it rents 9,000 m2; KPMG was the pioneer in moving to the new Plaza Europa business district in 2010, where it rents 6,000 m2 in Torre Realia BCN. And in 2011, Unilever moved to the Viladecans Business Park, where it rents 7,000 m2. (…).

More office space is available in Madrid: up to 46,458 m2. Moreover, that figure is expected to increase to almost 108,000 m2 in the next two years, as almost 23% of the total surface area of 475,784 m2 in the area becomes available. (…). This is partly due to BBVA’s upcoming move to its new headquarters in the neighbourhood of Las Tablas – the bank currently occupies the building at Castellana, 81, where it will leave a space measuring 24,000 m2, which is expected to become available in Spring 2016. Furthermore, KPMG is going to move from Torre Europa (pictured above) to Torre Cristal (in the Cuatro Torres complex) and will free up around 21,000 m2 of space at Castellana 89 from next year. Finally, space will become available in Torre Ederra (Castellana, 77), recently acquired by GMP, which is going to undertake a complete renovation of the property, to be completed at the beginning of 2017.

Until then, 9.9% of the total office space in Madrid is immediately available. Most is located in Torre Titania (on Calle Raimundo Fernández Villaverde, 65), which accounts for 34% of the available space. The remainder is spread across other office buildings in the area, including the Masters I and II buildings (Calle General Perón, 38), the Mapfre building (Calle General Perón, 40) and the Alfredo Mahou building (Plaza Manuel Gómez Moreno, 2). (…).

Original story: Expansión

Translation: Carmel Drake

Strong Recovery In Madrid’s Market For New Homes

14 July 2015 – Cinco Días

The lack of new housing developments in Madrid in recent years means that the few blocks that have been built are being sold quickly, as the economic environment improves. So much so that the marketing company Foro Consultores has conducted the first comprehensive study of the new build segment, which not only estimates the size of the stock of new homes in the capital, it also calculates when that stock may be depleted if the current strong rate of sales continues.

The study, based on visits to all of the developments currently for sale and simulations of purchases or direct surveys at the sites, has focused on analysing the existing supply in new urban developments (Arroyo del Fresno, Montecarmelo, Las Tablas, Sanchinarro, Valdebebas, El Cañaveral, El Ensanche de Vallecas and Carabanchel), since those are the areas where the new builds are concentrated. Whole new buildings are the exception rather than the rule in the city centre and in the city’s more established neighbourhoods.

Foro Consultores begins its report by highlighting the number of new homes: currently the stock of new homes available for sale in Madrid amounts to 1,770, of which 781 are “free” and 989 are social housing (VPO) homes. That figure represents just 20% of the total number of buildings that have started to be built since 2010. Moreover, we are talking about very small numbers if we take into account that the study has analysed 102 developments in total, containing 4,001 “free” homes and 3,861 social housing homes, almost 8,000 homes, which came onto the market in recent years as turnkey properties or homes sold off-plan.

4.1 homes sold per development per month

The uptake of homes by region is not uniform. More than half of the new homes built in El Cañaveral, in the south of the city – the last development to get underway – have not yet been sold. Meanwhile, in other new neighbourhoods, such as Montecarmelo, less than 5% of the new homes or those under construction remain unsold. Furthermore, in Ensanche de Vallecas in 2007, there were almost 3,000 unsubsidised new homes for sale, but now there are just 166 left.

As well as the scarcity of supply due to the construction paralysis in recent years, one of the keys that explains the fast absorption of the stock is the acceleration in the rate of sales in recent months. Foro Consultores estimates that if no new developments come onto the market, then the excess would be depleted in just six months, at the current sales rate of 4.1 homes per development per month.

The study highlights that these 4.1 homes sold (per development per month) represents the sale of 5.3% of developments every 30 days, an average rhythm that has not been seen since 2003, and for unsubsidised housing, that figure is almost 5 homes per development per month, whereas during the crisis, it never exceeded one unit per month.

The study also shows that 79% of the developments on the market were started between 2010 and 2015, and of those 77% have already been sold.

In terms of prices, the report also highlights that in certain developments in El Cañaveral, the price of unsubsidised homes is lower than the price of VPO homes, which is not very typical in Madrid. “This shows that the social housing pricing model is out of synch with the market and that the promoters of unsubsidised homes have adapted better to the changes in conditions”, explained Foro Consultores.

In the areas analysed, the absolute prices of unsubsidised homes ranges between €77,000 and €657,000, with an average price of €273,021. Meanwhile, the prices of VPO homes range between €38,474 and €382,652, with an average price of €150,721.

Finally, the study concludes that by type of home, three-bedroom houses are in most demand. Meanwhile, the construction of studios and small flats, which were so fashionable during the boom, is now reducing.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake