Tag: las tablas

Reale Finalises Purchase Of Sabadell’s HQ In Madrid

11 June 2015 – El Confidencial

The building at number 125, Calle Príncipe de Vergara, one of the most important thoroughfares in Madrid, is about to change hands. Sabadell opened a competitive process for the sale, which is about to come to an end, with Reale as the favourite to seal the deal.

The insurance company, which is being advised by Inmospace, has submitted a bid for more than €45 million, compared with the asking price of €40 million that was set at the beginning of the process. This figure virtually makes Realia the sure-fire winner in a deal that has attracted interest from up to eight bidders, according to sources close the deal.

The other interested parties include other insurance companies, such as Plus Ultra, although, unless there is a last minute surprise, Reale will end up signing the definitive agreement with Sabadell within the next two or three weeks.

This timetable matches the one being managed by the Catalan entity for its relocation to a new headquarters in Las Tablas, a process that will begin in July and will be carried out in several stages, in a phased way. Once completed, Reale will establish its new headquarters in Príncipe de Vergara.

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Solvia transaction

Solvia, the real estate subsidiary of the Catalan entity, has led this whole process, which has not required any external advisors. It has culminated in the reorganisation of the properties and headquarters that the bank has carried out recently.

Last year, Sabadell was one of the major players in the real estate office market in Madrid, thanks to the sale of Vodafone’s new headquarters, an office complex measuring 50,000 m2, to the British fund London & Regional for €117 million and with the commitment of the telecommunications operator to continue as the tenant.

In parallel, the entity reached an agreement with Vodafone to acquire its former headquarters, located in the neighbourhood of Las Tablas, an area in which firms such as Telefónica, BBVA and FCC have also chosen to locate their headquarters. This move, which many industry experts viewed very positively, was also orchestrated by Solvia, the real estate company led by Javier García del Río.

With capacity for 1,500 people, all of Sabadell’s central services will move to this new headquarters in the North of Madrid, with exception of its territorial operations, which will remain in Calle Velázquez, and its private banking division, which will continue in Calle Serrano. The Presidency will also remain in Calle Serrano, which accommodates both the Chairman, Josep Oliu, and the CEO, Jaime Guardiola, when they are in the capital.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Funds And Developers Compete To Buy Land In North Madrid

9 June 2015 – El Confidencial

Land is no longer the most toxic asset in the market, rather it has become one of the most sought after by investors. Although, not all plots or all locations are of interest, it is clear that the number of transactions, especially in Madrid, has reached “cruising speed” during the last few months. But, what are investment funds and property developers looking for exactly?

“Land has to be ready to build on (‘suelo finalista’); it is imperative that we can begin to build on it within a period of six months”, says Roberto Roca, Investment Director, Head of Spain at Orion Capital Managers, a fund that has closed two of the largest shopping centre transactions centres in Spain in the last year: the sale of Puerto Venecia (Zaragoza), the largest shopping centre in Europe, for €451 million and the sale of Plenilunio (Madrid), for a record figure of €375 million.

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The market for land in Madrid is in full swing, to the extent that some experts agree that there is “overheating” in certain specific areas.

“Most activity is concentrated within the M-30 and on buildable land. Also, outside of the M-30, to the North of Madrid, from the A-6 to the A-1, i.e. the area comprising the urban developments of Arroyo del Fresno, Sanchinarro, Montecarmelo and Las Tablas”, says Ernesto Tarazona, Director of Residential Property and Land at Knight Frank.

However, in the South of Madrid, “despite the decreases, prices have not dropped enough…to reflect the real demand in the area”, concludes Tarazona.

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One of the most active players in the market is Neinor Homes – the result of Lone Star’s purchase of the real estate arm of Kutxabank – which has €1,000 million to spend on land in Spain, and which regards Madrid as one of its main targets. The company led by Juan Velayos has just bought four plots in Alcobendas and another one in San Sebastián de los Reyes – both towns to the North of Madrid – for almost €65 million. This has been the largest land transaction so far in 2015, both in terms of square metres acquired, as well as surface area purchased. The plots are completely established and ready for construction, with a total surface area of 70,000 m2 and a buildable area for the construction of almost 600 (unsubsidised) homes. The vendor was a private group, i.e. the land did not used to belong to the Public Administration.

This transaction comes after the recent purchase of three other plots of land, one in Madrid and two in País Vasco for €22 million. According to a statement from BNP Paribas Real Estate, which advised on the deal, the first plot – with a buildable area of 6,400 m2 – is in the Legazpi neighbourhood and has been granted a special plan, approved by Madrid’s Local Council, to build a 20-storey tower block. The other two plots are located in Gexto and Urduliz.

Meanwhile, the cooperative manager Ibosa is finalising an agreement with an investment fund, which will allow it to pay €70 million to buy 40,000 m2 of land from the Valdebebas Compensation Board, which will allow the construction of 1,000 homes (of which 100 will be social housing).

Nevertheless, the largest land-related deal in Madrid is undoubtedly the possible future auction – maybe after the summer – of the Ministry of Finance’s plot of land on Calle Padre Damián, which already has 4,000 individuals calling at its door.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

What Does The Future Hold For Azca?

16 March 2015 – El Confidencial

In Madrid, the ‘City’ is called Azca. It is the capital’s financial centre par excellence and, yet, a third of the office space in the area is empty. (According to sector experts), the time for change in upon us.

In Madrid, the ‘City’ is called Azca. It is the capital’s financial centre par excellence, home to iconic buildings such as Torre Picasso and many of the world’s leading companies own the properties, including Pontegadea (the real estate company owned by Amancio Ortega), GMP, Mutua Madrileña, El Corte Inglés, Metrovacesa, Testa and Infinorsa. The prime location, in the heart of the Paseo de la Castellana and next to one of the capital’s major transport hubs, Nuevos Ministerios, meant that until a few years ago, this area accounted for the majority of the capital’s prime office space. However, the opening of the Cuatro Torres, the arrival of the economic crisis, the departure of large companies to peripheral areas (of the city) and the lack of investment, both in the properties themselves as well as in the surrounding area, have dampened Azca’s appeal.

The combination of these elements has also had a significant affect on prices. Between 2008 and 2014, prime rents in the capital fell from €39/m2 to €25/m2 (per month), whilst in Barcelona, rents decreased from €22/m2 to almost €14/m2 (per month), according to a report called “Understanding the Office Market in 2014”, prepared by Deloitte Real Estate. The final nail in the coffin in terms of the pressure on the area came with the departure of KPMG, which (last month) decided to leave its headquarters in Torre Europa to move to the Torre de Cristal, at Real Madrid’s former Sports City (Ciudad Deportiva).

Furthermore, BBVA is set to leave its traditional black skyscraper to relocate to the suburb of Las Tablas, and the tenants of the Torre Saint Gobain and Torre Titania are planning to fully vacate; the latter was built by El Corte Inglés on the foundations of the former Windsor. In total, around 67,000 square metres of the 272,000 square metres of above-ground office space in the area is (currently) available to let, which gives rise to the question: is Azca doomed to reduce its prices further?

The answer is no, according to all of the experts, although they admit that the area is at a turning point. In their view, Azca is living through its own catharsis, which may be summarised by the classic phrase – adapt or die. And the widespread belief is that the former will happen. “Right now, Azca has an opportunity to reinvent itself as the ‘City’ of Madrid once more, but it must know how to seize it. In terms of its location, it has the right ingredients and moreover, the higher the vacancy rate, the easier it will be”, say the experts at Deloitte.

In Madrid, barely 2% of the office space in the high quality buildings inside the M-30 is vacant.

In this sense, a public-private initiative, known as the Azca Master Plan (Plan Director de Azca), is underway, which seeks to open up the area and facilitate access from El Coste Inglés in Nuevos Ministerios to the Bernabeu, through three targeted efforts: construction work to improve (the area in general), environmental initiatives and planning. This would mean, amongst other aspects, modifying some of the uses (of the area); the main challenge is to convert the area that is the capital’s business district during the week, into an area for families, shopping and leisure on the weekends, rather than leaving it half empty when the office lights are turned off (on Friday night), which is what happens at the moment.

“Azca must become a digital icon that adapts to incorporate technological developments, that uses the facades of the buildings (creatively), that puts up digital screens to attract young people (to the area) at the weekend, that organises initiatives for the neighbours (of the area) and the wider city, that becomes an icon of ‘digital Madrid’, in the style of New York’s Times Square”, says Ángel Serrano, Business Director at Aguirre Newman.

His company is managing the last major transaction in the area, the sale of Castellana, 89, in which a great deal of interest is being shown; the price may reach €140 million. The same interest was seen recently in the bid to acquire the Torre Saint Gobain, which GMP ended up purchasing for €90 million (with plans to spend a further €14 million on its refurbishment) and the land that El Corte Inglés purchased from Adif for €136 million, when the starting price was €40 million.

These transactions confirm the conviction that the major landlords in Madrid have that Azca is going to emerge stronger from the current situation, which means it will be able to increase its prices again in the medium term. Nevertheless, for the time being, it will have to endure a couple of years “crossing the desert”, during which time GMP, Infinorsa and whoever ends up winning the bid to acquire Castellana 89 will refurbish their buildings as well as the Torre BBVA (where the bank will continue to occupy the top five floors and display its logo on the outside), Torre Saint Gobain and, most likely, the Torre Europa.

It is expected that all of these construction works will be carried out in parallel to the aforementioned Master Plan to relaunch the area, which means that now is the perfect time (for tenants) to move to Azca before all of these improvements have been completed and prices increase. “We are currently experiencing a historic moment in terms of low prices, which provides the perfect opportunity for many of the companies that moved out of the centre and now want to move back. Moreover, this is supported by the gradual recovery of the economy and the privileged location of Azca, which I think will play an important role in its favour (in the future)”, says José Luis Guillermo, managing partner of Inmospace. Nevertheless, in his opinion, this metamorphism of the area will require support from the Public Administrations, not only in terms of the necessary changes to certain uses (of the area), but also in terms of the adoption of measures to promote the entry of multi-national companies into the capital’s ‘City’.

Experts consider that now is the time to move to Azca, before prices rise.

Madrid has some of the highest forecasts for (rental) income growth over the next five years of any city in Europe. Currently, according to data from Knight Frank, its vacancy rate amounts to 11.9%, although in the central business district, known as in the jargon of the trade as CBD, the figure decreases to 7.3%, and for Grade A buildings (highest quality) within the M-30, the vacancy rate is a low as 2%. This means that there are very few good buildings (available) in prime areas in Madrid.

In this context, a third of the leaseable office area in Azca is currently vacant and, despite that, both the experts and the large investors that are bidding to purchase buildings expect average rental income in the area to return to €30/m2 (per month), i.e. 20% more than now, over the next five to seven years. How come?

Patricio Palomar, Director of Alternative Investments at CBRE provides a good summary of where Azca is going and the price of its rentals: “To analyse the evolution, three points should be taken into account: the Master Plan for the area, which will favour (higher) prices; how Azca is going to change in terms of immediate availability, since various buildings are currently being refurbished, which will work in the area’s favour, but that will also mean there is more supply and therefore, tenants will have greater bargaining power, which may contain the increase to some extent. The third element is that there are few square metres concentrated in one area in Madrid and there are few high quality buildings for tenants looking to rent more than 10,000 m2 of space inside the M-30; a supply that Azca will indeed have (in the not too distant future). Add to that the fact that many tenants of this type, which moved to peripheral areas in the past, now want to return to locations such as this one, make me think that we will see price increases”.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Madrid’s Own Dedicated Financial District

2 February 2015 – Expansión

The Castellana Extension / The plan is to create a new trendy area in Madrid to rival Canary Wharf in London and La Défense in Paris.

A sustainable area, with every kind of facility – a landmark axis for Madrid. These are some of the foundations upon which the new real estate development in Chamartín, in the north of Madrid, have been created.

“It is an ambitious proposal that draws clear parallels with urban regeneration projects in other European capitals, such as the changes brought about by Canary Wharf in London, La Défense in Paris and Potsdamer Platz in Berlin”, explains Flavio Tejado, Director of the Technical Office of the company Distrito Castellana Norte and Head of the engineering firm Arup in Spain.

The company is one of a group of more than 30 entities that have worked on the project, including professional services and real estate firms, lawyers and the architect studio Rogers.

The ambitious Castellana Norte project will be structured in four parts: the first one, called Parque Central, will be closed to Plaza de Castilla, and will include 6,300 homes and a park covering 24 hectares. “It is an area where the (current) housing stock barely amounts to 1%”, say its developers.

The second, called the business area, will boast 878,150 square metres of offices and 87,425 metres of public facilities, two metro stops (with 4.4 km of new track) and one train station, which will complete the Cuatro Torres complex located in the adjoining area. “We want it to be a space that is full of life not only from Monday to Friday, (but also on the weekends) and so there will also be shopping centres and hotels”, said Antonio Béjar, the Chairman of the company Castellana Norte, on Friday.

The new development will also involve the lengthening of the Paseo de la Castellana, with the construction of 10,000 homes and the new public facilities will also provide services to the existing neighbourhoods of Fuencarral and Begoña. In addition, there will be a tram service, which will operate through the middle of the new section of the Castellana. In addition to an office complex, the development with have a technological area, measuring 180,350 square metres, which the developers expect to appeal to number of companies and to generate new economic activities.

The extension of the Castellana will improve access to the city for the area with the regeneration of the North Junction and the M-40, and the integration of the Cuatro Torres area with developments in Las Tablas, where several large companies, such as FCC, Telefónica and BBVA have their head offices. All of this will create a renewed financial district in the Spanish capital to rival those of its European counterparts.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake