Alquiler Seguro Finalises MAB Debut of its Rental Home Socimi Worth €9M

4 July 2018 – Eje Prime

The Alternative Investment Market (MAB) is going to welcome another new Socimi into the fold very soon. Alquiler Seguro, owned by the Enacom group, is going to debut its rental home Socimi, Quid Pro Quo (QPQ). The company has obtained the green light from the MAB’s Coordination and Incorporations Committee, according to a statement issued by the Spanish Stock Exchange and Markets (BME).

The company owns 37 assets, all of which are located in Madrid except for one that is situated in Barcelona, and it is worth €9 million in total. The aim of the manager’s Socimi is to buy homes in “the main provincial capitals and their metropolitan areas”, taking advantage of the high current demand for rental homes in the main areas of the country.

Alquiler Seguro is managing the rentals of QDQ’s homes. Of the homes that it operates, 34 are located in the city of Madrid, two in Torrejón de Ardoz and Alcorcón, and one in Barcelona.

The Socimi has indicated that it has a new asset acquisition plan for the next few years, with the aim of “continuing to grow in an organised fashion”, with a maximum indebtedness ratio equivalent to 50% of the value of its portfolio, and future capital increases to finance its investment needs.

The holding company that owns QDQ is Enacom, which owns other companies in the group such as Ivermax, which specialises in advising and managing residential assets for investors; FIM Ibérica, which manages cases involving tenants in arrears; and the technological firm Anexia.

Original story: Eje Prime

Translation: Carmel Drake

Insur Records Profits Of €3.7M During First 9 Months Of 2017

30 October 2017 – Eje Prime

Grupo Inmobiliaria del Sur (Insur) has seen its results soar thanks to the good times that the residential sector in Spain is enjoying at the moment. The company recorded a profit of €3.7 million during the first nine months of the year, according to a statement filed by the group with Spain’s National Securities and Exchange Commission (CNMV).

The group’s turnover also soared during the first nine months of the year. Insur’s revenue amounted to €59.7 million, which represents an increase of 82.2% compared to the same period last year. The acceleration in Insur’s property developer activity and the rise in pre-sales (up by 43.1%) helped this growth.

By category, property development contributed €32.4 million to Insur’s total turnover during the first nine months of the year, compared to €21 million in the same period last year. Revenues from construction, leases and management contributed €18.3 million, €7.5 million and €1.5 million to the group’s turnover, respectively, during the nine months to September.

One of the group’s milestones in recent months has been its entry into the co-working sector, with the launch of the iSspaces business centre in Sevilla, a building with a surface area of 1,800 m2 comprising 30 offices.

Original story: Eje Prime

Translation: Carmel Drake

WeWork, The Co-Working Giant, Arrives In Spain

13 September 2017 – El Español

The co-working space giant WeWork, which is worth around $22,000 million, has finally arrived in Spain. And it already controls two offices in Barcelona and Madrid. The latter is going to open first, with a hosting service for small companies and independent professionals.

The offices in Madrid are located on Paseo de la Castellana, 43. This 9-storey newly-renovated office building, with a surface area of 6,000 m2, is owned by Colonial and used to house the headquarters of the consultancy firm PwC and also of Abengoa (which moved out in July 2016 to cut costs).

WeWork is not yet offering on its website the space that it has available in Barcelona. According to Ejeprime, it signed an agreement with the Catalan group Castellví in July to occupy a building in the 22@ district, where many of the main technological companies are concentrated.

The strategy that WeWork has adopted for its arrival in Spain is similar to the one that it has implemented in other markets: it does not own any real estate properties outright but rather reaches long-term agreements to lease them. Nevertheless, in May, it signed an alliance with an investment firm with the aim of acquiring real estate assets.

Who is WeWork?

WeWork is a project born in 2010 that offices flexible work spaces for workers. In Madrid, its launch prices start at €250 per month (in the case of individual desks for workers) and range up to €14,500 for private offices with up to 50 desks.

The company, which has a presence in another 17 countries, has raised more than $4,400 million, with investors ranging from fund managers, such as Fidelity and T Rowe Price, to banks such as Goldman Sachs and JP Morgan.

The most recent capital injection was received in August. In total, $4,400 million was contributed by the Japanese technological and telecommunications giant Softbank.

There has been debate over the valuation of the company in recent months. The $20,000 million figure represents 20 times its forecast revenues for 2017. That is much higher than those of its competitors such as Regus. The reason? It is not only a business that is growing quickly (by more than 80% if the forecasts for 2017 are fulfilled, according to CBInsight, with $1,000 million of revenues), but also because of its projection as a expert in how companies work with access to a vast quantity of data, as the magazine Wired pointed out in a recent report.

How does WeWork work?

The company has already created a Spanish company: WeWork Community Workspace SL. It was constituted at the end of June and its administrators include Mike Nolan, the company’s Head of Global Business Planning and Abraham Safdie, Vice-President of the International Business.

Its tax structure is very similar to that of other companies in the sector, such as Uber and Yahoo: the parent company that controls the subsidiary, WeWork Companies International BV, has its centre of operations in the Netherlands, a country with a very favourable tax regime and used by multinationals to reduce their tax bill.

Original story: El Español (by J.M.G)

Translation: Carmel Drake

RE Broker Aguirre Newman Goes Up For Sale

20 February 2017 – El Confidencial

Spain is experiencing a real estate boom once again and brokers want to take advantage of the situation to make money.

Whilst last year, the private equity fund Cinven acquired Tinsa, the largest appraisal company in the country, and in 2015, Apax Partners took control of Idealista, this year, Santiago Aguirre Gil de Biedma, the brother of Esperanza Aguirre, has decided to put Aguirre Newman, the largest real estate broker in the sector, up for sale.

According to financial sources, Santiago Aguirre has engaged Atlas Capital to sell his majority stake in the consultancy firm. The firm will target both individual and institutional investors, as well as public and private corporations. Aguirre Newman caters for all real estate investment-related matters and offers a complete set of services including valuations, feasibility studies, appraisals, attending compensation boards, leases, property management and technical architectural services.

The company generates annual revenue of around €80 million, with an operating profit of EBITDA of almost €12 million. As such, the financial sources consulted consider that Aguirre Newman could be sold for between €80 million and €100 million. Other sources consider that some of the parties that may be interested in purchasing this real estate broker include the private equity funds Cinven and Apax Partners, which could enlarge the businesses of Tinsa and Idealista, respectively, with this acquisition.

However, the same sources also consider that this could be a good opportunity for some of the main domestic competitors, which would result in a certain degree of concentration in what is a very fragmented sector. In addition to Aguirre Newman, the other large consultancy firms include CBRE, Knight Frank, JLL, BNP Paribas Real Estate, Cushman & Wakefield and Savills. These seven firms account for 90% of the sector’s revenues in Spain and employ 2,200 professionals in total. Almost 400 people work for Santiago Aguirre and his minority shareholder partners.

Low interest rates, the collapse in prices following the crash, the enormous volume of liquidity and the recovery of the Gross Domestic Product (GDP) in Spain have created a cocktail that has led to investment figures not seen since the era of the bubble. According to a report from JLL, non-residential real estate investment (offices, retail, logistics and hotels) amounted to €8,707 million in 2016. That figure represents a decrease of 8% compared to 2015, when operations worth €9,407 million were closed. Nevertheless, the figure recorded in 2016 was still higher than the maximum recorded in 2006 (€7,800 million).

Golden years

Last year, the most active market in terms of investment volume was the retail premises and shopping centre segment (retail), with €2,977 million, down by 3% compared to 2015. (…). Moreover, Aguirre Newman highlights that this figure exceeded the €2,000 million threshold for the third year in a row, which is clear proof of the boom in the real estate sector, especially in retail, which accounts for 35% of all tertiary investment.

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

Socimis Turn Their Attention To The Rental Housing Market

26 September 2016 – El Mundo

The real estate market is constantly evolving and adapting to new times and players, such as, for example, Listed Real Estate Market Investment Companies (Socimis). These investment vehicles, which have significant tax advantages and whose structure was created in 2012 to promote the leasing of properties, is now becoming a major player in the residential rental market.

To date, large real estate firms have created most of the Socimis in the market. They have spent billions of euros on investments, with the primary aim of managing tertiary and commercial assets. There have been a handful of purely residential Socimis on the scene, but they have been mostly driven at a family level. But that is now changing, after several high profile firms linked in one way or another to housing have decided to launch new Socimis. This is being perceived as a real declaration of intent that will lead to the professionalization of the rental housing market.

This professional boost will happen through initiatives such as those launched by Quid Pro Quo Alquiler (the Socimi being prepared by Alquiler Seguro) and Domo Activos Socimi (Domo Gestora), amongst others. They are just two of the new companies that are being called upon to define the before and after in the rental housing sector.

Why is this change happening in the real estate sector? “Nothing in particular has happened. We are seeing a normal process in terms of the evolution of the Socimis. At the beginning, it made complete sense to use them to acquire offices and shopping centres, because it was easier to find those products and at good prices. The situation was completely the opposite in the residential sector, where there were few packages of private homes available to buy. Over time, it has made sense for companies to start to group together large residential portfolios and commit to that formula”, explains José Luis Ruiz Bartolomé, real estate consultant and partner at Certus Capital.

Sources at Hispania, one of the leading Socimis in Spain, confirm that housing is less attractive. “The asset is very intense in terms of management and it requires a certain condensed critical mass to be profitable. Portfolios of very diverse homes should be avoided as they make management more difficult and increase costs”, said Cristina García, CEO at Hispania. For this reason, Hispania only investments in whole buildings, “because that means that we are able to renovate entire assets, increase their values significantly and optimise costs”, said García.

In this sense, it is worth highlighting that the new Socimis are backing the rental of diverse homes. The best example is the Socimi owned by Alquiler Seguro – a firm that specialises in brokering leases -, which will settle for properties purchased by qualifying investors from their current clients (it manages more than 50,000 contracts). On the other hand, Domo Activos Socimi will be the first property developer Socimi in Spain; it will focus on acquiring buildable land and constructing apartments for rental.

Alquiler Seguro’s initial plans involve capturing €50 million in funding and for the Socimi to launch with around 500 homes. Within four or five years, it hopes to raise up to €500 million and expand the portfolio to include around 6,000 units. Antonio Carroza, CEO at Alquiler Seguro, confirms that Quid Pro Quo’s goal is “to professionalize leasing and provide the market with a constant, homogenous and continuous supply”. (…).

Original story: El Mundo (by Jorge Salido Cobo)

Translation: Carmel Drake

ECI Puts Logistics Assets Worth c.€300M Up For Sale

10 August 2016 – Expansión

The distribution giant El Corte Inglés has engaged Morgan Stanley to find investors who may be interested in acquiring assets worth between €200 million and €300 million, according to real estate sources.

Specifically, the company chaired by Dimas Gimeno intends to divest 33 assets, which have a surface area spanning more than 500,000 sqm, as well as five plots of land.

The assets on the market include rental contracts guaranteed for five, ten, fifteen and twenty years; and the deadline for submitting non-binding offers will close at the end of September.

Sources consulted indicate that some of the warehouses included in the sale are not sufficiently tall enough to meet with current demands from investors for this type of asset, which has forced them to adjust the duration of their contracts, as well as the rental prices.

The batch for sale, which comprises 38 assets in total, including the plots of land, contains: El Corte Inglés’ logistics centres in Bisbal del Penedès (Tarragona) and on La Peluquera industrial estate in Madrid. It also includes other assets on Las Atalayas industrial estate (in Alicante) and the Goro en Telde estate (in Gran Canaria).

By contrast, El Corte Inglés has not included any assets currently considered to be strategic in the batch. Thus, for example, the jewel in its logistics assets crown will not be included: its mega centre in the south of Madrid.

Reduce debt

The company, which seeks to reduce its debt balance with these divestment operations, may consider selling other types of non-strategic real estate assets in the future, as Expansión revealed in March.

These real estate asset divestments follow others completed by El Corte Inglés in recent years. In this way, in the summer of 2013, the distribution group completed the sale of a building next to Plaza de Cataluña in Barcelona to the fund manager IBA Capital.

Months later, it sold another property to the same investor on Calle Preciados in Madrid.

Other divestments

Last December, the chain sold another building in the iconic Puerta del Sol in Madrid for €65 million to the US fund Thor Equities. At the time, the group agreed to continue to occupy the building, which houses its book store and is located in one of the most important shopping areas of the capital, for another year.

Similarly, in February, the group sold the building that it had acquired ten years ago on Calle Fontanella in Barcelona for €17 million to a Russian investor, which plans to convert the property into a hotel.

By contrast, El Corte Inglés has also completed several important asset purchases in recent years. In this way, the company acquired a plot of land from the railway infrastructure manager Adif, right on Paseo de la Castellana for €136 million in 2014. This plot of land is located next to one of the company’s main shopping centres in the capital, in Nuevos Ministerios.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Q1 2016: Colonial’s Net Profit Rose By 131% To €11M

13 May 2016 – Expansión

Colonial closed the first quarter of the year with an attributable net profit of €11 million, up by 131% compared with the same period in 2015, after increasing its revenues from rental income by 20%. The real estate company generated €66 million from renting out its offices, which are primarily located in the major business districts of Madrid, Barcelona and Paris.

The company highlighted that it leased 40% more office space during the quarter, specifically, 45,000 sqm during the three months to March, which represents half of its objective for 2016 as a whole.

The greatest increase was recorded in Barcelona, where Colonial renewed the lease contract of the building that houses Gas Natural’s headquarters, measuring 22,400 sqm, and where it also leased out almost 3,000 sqm to the audit firm Grant Thornton.

Colonial’s share price increased by 0.32% yesterday to €0.633.

Original story: Expansión (by J.O.)

Translation: Carmel Drake

Barcelona Drives Recovery In Spain’s Logistics Sector

4 February 2016 – Expansión

The logistics market is closely linked to the recovery in overall consumption. Last year, logistics warehouses with a surface area of almost one million m2 were leased, up by 37% compared with the previous year. This increase was primarily driven by the market in Barcelona, where companies anticipate a future supply shortage. There, the historical record for new warehouse leases was broken, with 564,000 m2 leased in total, representing an increase of almost 80% compared with 2014, according to figures from JLL.

In Cataluña, the automotive and fashion sectors have continued to feature in the largest operations, although the increase in ecommerce is also driving the sector, and warehouses leased exclusively for the distribution of products sold by companies online accounted for 10% of the total.

Some of the largest operations of the year in Cataluña included: one involving Decathlon, which leased a 40,000 m2 warehouse; another involving Kellogs, which leased 26,200 m2 of space; plus two warehouses owned by logistics operators, measuring 21,000 m2 and 18,500 m2, respectively, which are going to be used exclusively for the online sales of Inditex and Mango.

Moreover, a pre-agreement for the future logistics centre that Amazon plans to open in Cataluña, which will have a surface area of 210,000 m2, was signed in January, which means it will be accounted for in 2016, a year in which the trend (recovery) that began last year is expected to be maintained.

In Madrid, operations were recorded involving a total surface area of 383,000 m2 last year, up by just 2% compared with the previous year, but expectations there are high for 2016, thanks to the projects that are underway and due to be completed this year, including the one in Cabanillas del Campo and another two large warehouses in the Getafe area. (…).

Despite the shortage of large warehouses and the fact that vacancies are decreasing, rents have not yet started to recover, with the exception of in some of the large cities, where the increase has been minimal. Nevertheless, the consultancy firms predict rises in 2016. (…).

The Director of Logistics and Industry at CBRE  in Spain, Alberto Larrazábal, said that, last year “Barcelona exceeded Madrid because it has a pharmaceutical and textile base that the Spanish capital lacks”. Nevertheless, he expects this trend will be reversed in 2016, because “there is no availability in terms of land or finished warehouses in the Catalan capital’s area of influence”.

Investment market

In terms of investment, 2015 was also a positive year: investors spent €734 million, compared with €586 million in 2014. The main players were the Socimis and overseas funds, and their interest resulted in the compression of yields from 8% two years ago to their current level of 6.5%. (…).

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Colonial Buys An Office Building On c/Génova For €36M

31 July 2015 – Idealista

The real estate company Colonial has announced the acquisition of a prime office building measuring 5,000 m2, located at number 17, Calle Génova for €36 million. The property is leased to several high profile companies and represents the third purchase made by the company in the office segment this year.

The property, located at number 17 of the Madrilenian street of Génova, has a surface area of almost 5,000 m2 and 70 parking spaces. It is currently leased to several leading companies, whose names have not been disclosed. (…).

The real estate company, in which Juan Miguel Villar Mir holds a stake, said that “the prime position of this building, thanks to its central location, is strengthened further by its recent comprehensive renovation, its “very good” BREEAM certifications and its “A Rating” Energy Certificate, which certify that all of the construction components have been reviewed, to ensure the utmost energy efficiency and sustainability”.

The transaction, which was closed during the first half of the year, was advised by BNP Paribas Real Estate and is the third made by the company in the prime office sector this year.

In fact, after spending €36 million on this building, Colonial’s total investment this year amounts to €125 million. The three buildings that it has purchased in Madrid’s business centre have a combined above-ground area of around 26,000 m2.

The appetite for prime office blocks in the capital is high due to the scarcity that exists in the market for this kind of product, which attracts high quality demand and maximum rental prices. (…).

This latest operation fits perfectly into the real estate company’s new strategy, which consists of growing in the office market in the three major cities in which it has a presence: Madrid, Barcelona and Paris.

Original story: Idealista

Translation: Carmel Drake