Tag: long-term contract

M&G Invests €80M to Strengthen its RE Portfolio

29 May 2018 – Expansión

The real estate division of the London-based firm M&G Investment has decided to bet significantly on the Iberian market, where its exposure now exceeds €500 million. “We are partners of institutional investors looking for core properties in the best locations across Europe. We opened our office in Spain in 2016, but we completed our first operations there a year earlier”, explains Federico Bros, Director of Asset Management for Spain and Portugal.

Its first operation involved the purchase of the former headquarters of Telefónica located on Calle Ríos Rosas (Madrid) and leased to the advertising giant WPP. “It is an example of what we look for, well-located assets with long-term contracts, 17 years in this case. Between the renovation and purchase we will invest €175 million in that property”, says Bros.

After that acquisition came others, such as an office building in Barcelona’s 22@ district and, recently, five operations with a very diverse profile. On the one hand, M&G purchased three commercial assets: two in Madrid and one in Granada. “The premise in Granada, measuring 2,500 m2, is located on Reyes Católicos, the best shopping street in the city”, explains Bros. In the case of Madrid, M&G acquired two retail premises on Gran Vía 68. “We closed this operation in May but we have been negotiating it for months, given that the building was being renovated. A few months ago, a large Tony Roma’s restaurant opened there and Sabadell is going to open its flagship branch in the other premise in a matter of days”, he said.

Similarly, the firm acquired two industrial assets in Madrid, specifically a logistics platform, leased to Teka, in the Corredor del Henares, and another complex in Getafe. Those two sites span more than 55,000 m2. In total, the firm has invested €80 million on its latest operations, channelled through two funds: MEP and EuroSPIF.

More opportunities

Following these investments, the manager is still looking for opportunities in the Spanish market.

“We are involved in several processes, both official and off-market, in Madrid, Barcelona and prime locations in other cities. Spain is a priority country for us”, says Bros.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

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