Tag: london

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

Derby Hotels’ Assets Are Worth €800M

23 June 2016 – Expansión

Family owned chain / The Group chaired by Jordi Clos owns 12 hotels and 10 apartment buildings, and has a gearing ratio of 11.2%.

The Catalan businessman Jordi Clos, owner of Derby Hotels and the Egyptian Museum of Barcelona, and the Chairman of the Barcelona Hotel Association, has created a real estate empire from scratch that is now worth €800 million. Few hotel chains in Spain are so asset rich, given that the group owns all twelve of its hotels and all ten of the tourist apartment buildings that it operates. Its gearing ratio is also unusually low: 11.2% of the total asset value, at around €90 million.

In addition to the properties for tourist use, which are located in London, Paris, Madrid and Barcelona, the group also owns several office buildings, homes and car parks, which it holds purely for real estate investment purposes.

Derby Hotels, which moved its headquarters from Barcelona to Madrid a few months ago, recorded revenues of €74.3 million in 2015, up by 6.4% compared with the previous year. Of that amount, €67 million was generated by the hotel business and the remainder, from the operation of the tourist apartments.

The only building in this family-owned chain that precedes Jordi Clos is the Hotel Derby, which his father-in-law opened in Barcelona in 1968. The businessman has opened all of the other properties, over a thirty year period from 1983 until 2013.

In some cases, Clos acquired his properties with investment partners, before going on to buy out their stakes years later. Such is the case of the Caesar Hotel in London, which he purchased together with the Metropolis real estate fund in 2004 for €30 million (each party acquired a 50% stake). In 2009, he joined forces with that fund again to acquire the Hotel Banke in Paris for €75 million. In 2013, Clos purchased the shares that Metropolis held in those two hotels in an operation that valued the assets at €120 million in total.

A similar case was that of Hotel Bagués in Barcelona, which he opened in 2010 with the Bagués Masriera family, owners of the building that the jewellers of the same name had occupied for decades. Last year, Close purchased the remaining 40% stake that the jewellers still held for €3.8 million.

Searching for new properties

Now, having digested the purchase of the 50% stakes of the hotels in London and Paris, Derby wants to continue to expand its empire in Europe. “Barcelona has been ruled out due to the hotel moratorium there and, we already have two five-star hotels in Madrid”, explained Clos. “Instead, we want to continue to diversify our risk by opening hotels in other cities, such as Amsterdam and Munich, although we are also looking at Copenhagen and Stockholm”.

The terrorist attacks in Paris in 2015 directly affected the Group’s hotels in the French capital. Clos estimates that the occupancy rate there fell by 15% and average prices decreased by 20%. “If we weren’t a diversified chain with a low gearing ratio, it would have been hard for us to survive the winter in Paris”, he added.

Indeed, Hotel Banke had just increased its rating from four to five-stars following the remodelling of its 91 rooms. Now, the group is planning to raise the category of its hotel in London too, to a superior four-star property. To this end, it plans to increase the size of its rooms and reduce the total number from 140 to 120.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Prices of Luxury Homes To Rise In Madrid And Barcelona

14 May 2015 – Expansión

Recovery / The prices of high-end homes will increase by 5% in Spain’s largest cities in 2015, but they still fall well below those seen in Monaco, London and Paris.

Madrid and Barcelona are two of the large European cities in which luxury housing is least expensive. Nevertheless, it is clear that high quality properties are going to become more expensive in 2015. Specifically, by 5% in the “most prestigious areas” of Barcelona and by between 2% and 3% in Madrid.

Those are the findings of a study by Coldwell Banker – one of the largest networks of real estate brokers in the world – which compares prices per square metre for new, used and luxury housing in prime areas of the continent’s main real estate cities: Monaco, Prague, Rome, Milan, Paris, Valeta (Malta), Berlin and London, as well as in the Madrilenian and Cataluñan capitals. The comparison is linear; it does not take into account the (respective) income of citizens.

In the urban centre of Madrid, the average price per square metre of new housing developments is €5,610, i.e. €110 more than in the centre of Barcelona (€5,500). Those figures are light years away from the (prices seen in) London (€11,500/m2) and Paris (€10,000/m2) and from the stratospheric prices of €80,000 per square metre in the principality of Monaco.

Thus, whilst a 100 m2 apartment in a well-located area of the Spanish capital costs €561,000 on average; in the centre of Monte Carlo, the price of the same property would soar to €8 million. In other words, the same price as 14 such properties in Madrid and 14.5 in Barcelona. We should bear in mind that Monaco has a surface area of just 2 square kilometres, in which almost every centimetre contributes exclusivity and luxury.

Other European cities have less prohibitive prices. The price per usable square metre of a new residential property in Milan amounts to €10,500 and in Rome, to €8,500.

Of the 10 individual real estate markets covered in the report, only three are cheaper than Madrid and Barcelona: Berlin (€4,800 per m2, on average), Valeta (Malta, €3,650/m2) and Prague (€2,770/m2).

The price of luxury housing is increasing with respect to central areas in all of the cities, except for Monaco, which is an extremely “limited” market, says the report. The price per m2 of a new luxury apartment – not necessarily in the centre – is €60,000 in the state of Monaco.

Far below the prices seen in the Principality, the most exclusive capital in Europe is Paris, where the average price per square metre of luxury homes amounts to €25,000. In third place and still in a bubble is London, where residential properties of the highest quality have an average price of €18,000 per square metre.

Prices in London are double those in Madrid (€9,033). Luxury homes in Madrid are 20% more expensive than in Barcelona (€7,500 per square metre).

Limited supply

In Barcelona, “prices will start to recover slowly in the main areas. In the areas of highest demand and prestige, we expect to see an increase of between 3% and 5%”, says the report. In Madrid the increases will amount to between 2% and 3%.

According to Coldwell Banker, the “high quality” residential market in Madrid “is still very limited” and in Barcelona “supply is limited, since there are few new buildings in the centre of the city”. In Madrid, there are approximately 200 developments of this kind in the centre and around 400 in the wider metropolitan area.

That is not the case in other capitals. The supply of new homes in Berlin is “extremely strong”. Investors mostly seek “small furnished, high-end luxury apartments”. Penthouses can cost as much as €20,000 per square metre.

The other goldmine is still London: “In Mayfair and Marylebone, there is a large supply of new projects that are just coming to an end now”, says the report.

Original story: Expansión (by Juanma Lamet)

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