Zambal Buys 2 More Office Buildings in Madrid for €38M

20 December 2017 – Eje Prime

Zambal is fattening up its portfolio with more new assets. The company, which is managed externally by IBA Capital Partner, an independent private equity firm specialising in real estate investments, has added two more office buildings to its portfolio, according to sources at the group. The investment on the acquisition of the two properties by the Socimi has amounted to €38 million.

The Socimi has completed the acquisition of two buildings, located at number 25 Calle Albarracín, in the Julián Camarillo area, which form part of a large office complex, with a total leasable area of 13,283 m2 and 166 parking spaces.

The complex is leased in its entirety to the French multi-national Atos, specialising in digital transformation and which is listed on the Paris stock market. “A single long-term lease contract has been formalised with the current tenant with a compulsory occupancy period of 12 years”, explain sources at the group.

The acquisition price amounts to approximately €38 million, of which €28 million has been paid at the time of the purchase and the remaining €10 million will be paid within the next six months. The sale will be undertaken in its entirety using own funds and financing from the firm’s main shareholder. In addition, Zambal will remodel the building to bring it in line with market standards

The Socimi has formalised a loan with Altaya, its largest shareholder, amounting to €40 million (comprising two tranches, one for €25 million for the payment in December, and another for €15 million, for the delayed payment), with the aim of partially financing the acquisition of the properties, formalised by public deed today.

With these purchases, the Socimi has further increased its asset portfolio, which is now worth more than €730 million. These two office buildings represent the second set of assets that Zambal has acquired in 2017. As Eje Prime revealed, at the end of last month, the company purchased two more office buildings in Madrid for €70 million (…).

Zambal started to acquire assets in June 2013, when it bought a retail property located at number 23 Plaza Catalunya, in Barcelona, which is leased by El Corte Inglés and which has a gross leasable area of 7,400 m2.

Also in 2013, Zambal added more assets to its portfolio: it purchased an office building located at number 25 Avenida San Luis in Madrid and another property located at number 25 Calle Serrano Galvache. In the following years, the Socimi added a building on Paseo de los Olmos in Madrid and another office block on Avenida de Manoteras. In December 2015, Zambal made its debut on the MAB with a market capitalisation of almost €600 million, making it the tenth Socimi to list on the market.

In addition, in recent years, Zambal has undertaken the divestment of assets that it has not considered strategic for its activity. They include the building at number 9 Calle Preciados, which it purchased in October 2013 and which it sold in February 2016, as well as the retail property located at number 61 Calle Serrano, which it also sold in February last year.

Original story: Eje Prime (by C. Pareja & J. Izquierdo)

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