Investments in the Logistics Real Estate Market Skyrocket

31 July 2019

Total investment in the Spanish logistics market rose above 530 million euros in the first semester of 2019, a more than five-fold increase compared to the investment made in the same quarter of last year, according to Knight Frank ‘s latest report ‘Logistics Snapshot.’

Knight Frank’s logistics chief, Alegandro Vega-Penichet, believes that that the logistics investment market will “once again” exceed the €1-billion mark,  largely because yields in Madrid and Barcelona currently stand at 5%, compared to other markets such as London and Frankfurt, with a return of 4%, or Berlin and Paris, with 4.25%.

Original Story: La Vanguardia

Adaptation/Translation: Richard D. K. Turner

Merlin Enters the Top 10 Ranking of the Largest Logistics Owners in Europe

19 June 2019 – Cinco Días

Merlin Properties has been a major player in the European office and shopping centre markets for several years. But now, the Socimi led by Ismael Clemente has entered the Top 10 ranking of the largest logistics owners on the Continent, with its portfolio of 1.6 million m2 under management, according to a report about the logistics market compiled by Deloitte.

The Top 10 ranking is led by the listed US firm Prologis (17 million m2); Logicor, the firm controlled by China Investment Corporation and Blackstone, (13.5 million m2); and the fund manager CBRE GI (7.7 million m2). They are followed by the logistics specialists Segro, P3 Logistics Parks and Goodman.

Merlin owns 1.1 million m2 of logistics space outright and holds a 48% stake in a company that owns another 469,000 m2 of logistics space in the port of Barcelona. It also has 1.254 million m2 of surface area under development.

Investment in logistics assets is currently breaking records across Europe and in Spain, in particular, boosted by attractive returns and the boom in e-commerce. With the rising demand, the availability of high-quality warehouses is decreasing, hence the need to build more. According to Deloitte, investment in warehouse purchases amounted to €1.5 billion last year, the second best year ever after 2017, when the figure reached €1.6 billion.

Merlin is planning to invest €484 million in its Best II and Best III logistics funds between now and 2022. Most will be targeted in Madrid and its surrounding areas (Guadalajara and Toledo) and Cataluña, but investment will also be made in Lisbon, Zaragoza, Sevilla and Vitoria.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation/Summary: Carmel Drake

De Agostini Makes its Debut in Spanish Real Estate through DeA Capital

10 April 2019 – Voz Pópuli

The De Agostini group has announced its decision to make its debut in Spain and Portugal, where it will operate through DeACapital Real Estate Iberia.

The firm has been constituted as a joint venture, owned 72% by the Italian group DeA Capital S.p.A. and 28% by the local management team, led by Koldo Ibarra as the CEO.

The new company will primarily invest in offices and logistics assets across the Iberian peninsula.

DeA Capital S.p.A. is currently the largest Alternative Asset Management platform in Italy with assets under management worth €11.2 billion.

Original story: Voz Pópuli (by Alberto Ortín)

Translation/Summary: Carmel Drake

E&V: Co-working, e-commerce – New Niches Boom in the Spanish RE Market

2 April 2019 – El Confidencial

The Spanish tertiary sector is consolidating its position as one of the most attractive in the world. Investment rose by more than 10% in 2018 to €12.3 billion, boosted by overseas investors, who accounted for 65% of all operations, according to a report published by Engel & Völkers.

Moreover, this interest is set to maintain its momentum over the coming years. In 2019, logistics is expected to continue its upward trend in light of the unstoppable growth of e-commerce. In the office sector, experts forecast on-going diversification, with demand growing for regular offices on the outskirts of cities, as well as for co-working spaces in the centre of large capitals.

In the alternative asset segment, interest is also expected to continue, especially in nursing homes for the elderly and halls of residence for students. In the retail sector, multi-channel offerings are forecast to grow, with the most important brands concentrating their retail businesses into flagship stores in very central locations. Also, in the retail sector, the move by traditional out-of-town operators, such as Ikea and Media Markt, into downtown locations is expected to become more widespread.

In terms of rental prices for commercial premises, in Madrid, in the most sought-after areas of Salamanca, Chamberí, Sol, Chueca- Justicia and Malasaña, maximum prices amount to €90/m2/month, dropping to €55/m2/month in secondary areas and to €45/m2/month elsewhere.

Meanwhile, in Barcelona, prices are highest on the most sought-after streets, located in Ciutat Vella, Tapinería and Eixample. There, average prices range between €30/m2/month and €40/m2/month.

Original story: El Confidencial (by E.C.)

Translation/Summary: Carmel Drake

Grupo Lar & Centerbridge Join Forces to Build Logistics Assets

10 March 2019 – Expansión

The Spanish real estate firm Grupo Lar has joined forces with the US private equity company Centerbridge to promote a portfolio of latest generation logistics warehouses.

The assets in the portfolio will primarily be located in Madrid and Barcelona, but opportunities will also be sought in Valencia, Málaga, Sevilla and the Pais Vasco.

The joint venture between the two firms will compete with another partnership launched in 2017 to invest in the logistics sector between the fund manager CBRE Global Investors and Montepino.

Original story: Expansión

Translation: Carmel Drake

INBISA Delivered 378 Homes in 2018 and Now has 1,500 Homes Under Construction

12 February 2019 – Press Release

INBISA Inmobiliaria closed 2018 with 378 homes delivered in privileged locations and the purchase of nine buildable plots of land. At the same time, it started 2019 with 1,500 homes under construction and it remains firm in its commitment to search for new opportunities and to its objective of developing new projects in accordance with the current market.

Thanks to the experience harvested since its creation in 1995 and its capacity to adapt to the needs of the market and its clients, in 2018, INBISA Inmobiliaria successfully achieved the objectives established at the start of the year and took another step forward in the fulfilment of its Strategic Plan 2017-2020.

In this context, last year, the company delivered three residential developments containing 379 homes in total (70% more than in 2017), located in the Madrilenian neighbourhood of Sanchinarro, Sant Cugat del Vallès (Barcelona) and the Vizcaya town of Etxebarri (…).

In terms of the new plots of land, during 2018, INBISA Inmobiliaria acquired nine plots on which to construct 600 new homes. The portfolio is distributed between Madrid, Barcelona, Málaga and Palma de Mallorca, priority enclaves for the company within its strategy to back locations with high and sustained demand in the real estate market. In the case of the Community of Madrid, INBISA Inmobiliaria backed the northwest of the capital, primarily the neighbourhoods of Valdebebas and Sanchinarro.

In Cataluña, the company continued its expansion across the metropolitan area of Barcelona, specifically, in Ripollet, Teià y Viladecans, whilst in the Balearic Islands, it acquired a plot in Palma de Mallorca. Finally, in light of the booming interest from primarily international clients in the Malagan coast, INBISA Inmobiliaria opted to purchase two plots in Mijas and Estepona (…).

All of this has allowed the company to start 2019 as one of the leading property developers in Spain, with 1,500 homes under construction distributed across different enclaves of the country and with a clear commitment to searching for new developments in residential and logistics areas this year (…).

Moreover, as part of its strategic plan for this year, the company is also planning to develop some new logistics projects in light of the great interest in the sector from domestic and international investment funds (…).

Original story: Press Release

Translation: Carmel Drake

Knight Frank: High Street Investment Soared by 84% to €1.3bn in 2018

31 January 2019 – Eje Prime

The real estate sector has closed another year with a strong performance in the Spanish market. As we approach the end of the real estate cycle in the country, the tertiary sector is continuing to maintain high levels of investment, with growing rents and sustainable yields.

In the retail sector, the investment volume amounted to around €3.7 billion in 2018, according to data from Knight Frank. The main driver of that investment was the high street, where spending soared by 84% to €1.3 billion.

Despite that, the bulk of retail investment in Spain continued to be directed towards shopping centres, which accounted for 54% of the total last year with major operations such as the sale of the Summit portfolio, owned by Sonae Sierra in conjunction with CBRE GI, and of which 87% is now controlled by JT Real Estate.

Moreover, the consultancy firm highlights that interest has increased from investors in shopping centres and isolated retail warehouses in good locations “which allow them to manage last mile delivery points”, said the consultancy firm.

Returns have remained stable across the three segments with yields of 5.25% for retail parks, 4.25% for shopping centres and 3% for high street assets.

Despite the strong performance of the retail sector in 2018, the jewel in the Spanish real estate crown is still the logistics segment. In 2018, investment in logistics assets amounted to €1.255 billion, close to the record set in 2017 of €1.28 billion.

In the last quarter, several large operations were closed, such as Blackstone’s purchase of a portfolio of 55 assets from Neinver for €300 million.

Interest in the segment continues to generate expectations regarding the compression of yields, and so Knight Frank forecasts returns of around 5% this year.

Finally, the office sector has also maintained a robust rate of activity, after the maximums recorded in 2017 thanks to operations undertaken by the Administration. Specifically, Knight Frank estimates that 2018 closed with a gross absorption of 493,000 m2.

Following the trend set in 2017, 52% of the surface area leased was located outside of the M-30, although during the final quarter, it was the secondary centre that accounted for the bulk of the space rented, around 35%.

Prime office rents remained stable at around €30.5/m2/month, and reached maximums of €38.5/m2/month in the most sought-after areas of the business district.

Original story: Eje Prime

Translation: Carmel Drake

Grupo Lar Purchases 36,000 m2 of Logistics Land in Valencia

17 December 2018 – Eje Prime

Grupo Lar is starting to expand in the Spanish logistics sector. The company has completed the purchase of 36,000 m2 of logistics land in the municipality of Quart de Poblet, in Valencia with the aim of constructing two warehouses and an additional block of offices.

The two logistics centres will have surface areas of 5,000 m2 and 17,000 m2, respectively. Meanwhile, the office building will span approximately 1,300 m2. The building work is expected to start during the second quarter of 2019 and finish during the first quarter of 2020.

The land is located close to the Riba-roja logistics hub, 15km from Valencia and 10km from the Manises airport. Moreover, its proximity to the city’s main arteries gives it a privileged position when it comes to moving goods.

Currently, Grupo Lar is working on an expansion plan for its logistics platform with Madrid, Barcelona, Valencia, Málaga, Sevilla and País Vasco all in the spotlight. The company plans to invest €250 million between now and 2021 in the acquisition of 500,000 m2 of industrial land.

Original story: Eje Prime 

Translation: Carmel Drake

Blackstone, Lar, Crown…the Appeal of the Port Feeds Valencia’s Logistics Boom

18 November 2018 – El Confidencial

The growth of cargo traffic at the Port of Valencia and its role as a maritime port of entry for the ‘hinterland’ that runs from the central area of the Mediterranean to Madrid and its metropolitan area, are feeding a boom in logistics operations in the area around the capital of the Community of Valencia. Large funds and multinationals such as Blackstone and the US manufacturer of metal containers for the agro-food sector, Crown Holdings, have pounced on the chance to occupy spaces in well-communicated areas, either to develop projects for third parties or to set up shop themselves ahead of forecast growth in operations towards clients located in the area.

The latest operation has been finalised very recently with the acquisition by Grupo Lar of a plot measuring 40,000 m2 for the construction of a warehouse measuring 25,000 m2 in Quart de Poblet, next to the access point to Valencia along the A-3 motorway, which connects the city with Madrid.

That ring road and the industrial estates located either side have been experiencing important movements for several quarters. Business sites such as those in Loriguilla and Riba-Roja are on the verge of saturation and are still welcoming new projects, such as the logistics platform that MRW inaugurated in July on the El Oliveral site. That same month, Blackstone acquired Lar España’s logistics portfolio for €120 million, which included land for development in Cheste (also on the A-3 axis) and a warehouse in the Juan Carlos I Park in Almussafes, where the Ford factory and an important proportion of its auxiliary industries are located. The speculative bet of the US investment bank is seeking to take advantage of the shortage of land dedicated to storage and transport management operations that is starting to be seen in Valencia.

Last year saw record leasing figures, with more than 220,000 m2 of space leased, up by 69% with respect to the previous year, according to a report compiled about the logistics market in the city by CBRE, one of the most active consultancy firms in this real estate segment in Valencia and its metropolitan area. The increase in leasing in Valencia is running in parallel to the market in Madrid, which rose by 100%, and despite a notable decrease in Barcelona, which saw a sharp drop in the volume of surface area leased (…).

CBRE has identified three major areas for logistics operations. The first is the town centre and the first storage arc focused on serving the city and its surroundings. The second arc is very closely related with companies linked to the port activity. That is where the Riba-roja, Loriguilla and Cheste industrial estates are located, on the motorway that connects Valencia with Madrid. Then, there are the new logistics developments that are being built in the north in Parc Sagunt (…).

The potential demand is high, estimated at 1.7 million m2 across the three rings, according to estimates from CBRE. But the lack of available plots in prime areas is endangering the “major opportunities in the business”. The returns on those well-located plots are the highest (6.75%) of any of the main European centres, above those in Madrid and Barcelona (5.85%). “There is a general need for new at risk developments”, said the consultancy firm rather than for “turnkey” projects, which the local property developers have been focusing on until now.

Original story: El Confidencial (by Víctor Romero)

Translation: Carmel Drake

Patrizia Buys a Logistics Asset in Toledo for €37.5M

28 November 2018 – Eje Prime

Patrizia Immobilien AG is gaining financial muscle in the Spanish market. The German fund manager has purchased a space measuring 66,424 m2, divided into two properties, south of Madrid for €37.5 million. With this operation, the company is strengthening another of its key segments in the Spanish real estate market, after launching its first residential project in the country in July 2017.

The latest complex is located in the municipality of Ontígola in Toledo and is leased in its entirety to two tenants: the transport company DHL and the company specialising in logistics for the textile sector Logisfashion. Both groups are expected to begin their activity in the premises during the first half of 2019.

Patrizia has acquired this logistics unit through its latest fund. In fact, it is the seventh fund that the company has launched in Europe with the aim of buying real estate assets, in particular in the segment for offices, industrial assets and residential properties.

“This operation underlines the company’s commitment to the Spanish logistics sector, which is experiencing one of its best ever moments due to the boost from e-commerce and the shortage of good-quality assets”, said Eduardo Roza, Head of Operations at Patrizia in Spain, in a statement.

Currently, the group manages four logistics properties located in Madrid and Barcelona, spanning more than 200,000 m2 in total. In Spain, Patrizia also has a portfolio of residential rental assets worth €1 billion. The company has its headquarters in Spain in Madrid, where it employs a workforce of fourteen.

The group is headquartered in Augsburg, Germany and was founded in 1984 by its current CEO, Wolfgang Egger. Patrizia Immobilien is one of the largest real estate investment management entities in Europe. The company controls a real estate portfolio worth €19.5 billion with assets located across more than fifteen countries in the Old Continent.

The company operates as a strategic investment advisor, both for large institutional investors (insurance companies, pension funds, sovereign funds, savings banks and credit cooperatives), as well as for domestic and international investors.

Original story: Eje Prime (by Berta Seijo)

Translation: Carmel Drake