Tag: long-term rental

Socimi Lists its €46-Million Portfolio of Homes and Land in Madrid

27 April 2018

The countdown has started for Spain’s stock exchange to become home to a new real estate investment company listing. AP67 has received the approval to start trading on the Mercado Alternativo Bursátil (MAB).

Although the exact date of the listing is still unknown, the socimi will debut at a price of 6.65 euros per share and a market value of about 34 million euros.

The vehicle is specialised in the residential sector and has residential buildings, one residential plot of land, two industrial plots of land and several commercial premises. All the assets are located in the municipality of Leganés (Madrid) and have a market value of €46.5 million, according to calculations by the appraiser Gesvalt.

The two most valuable assets in its portfolio are a residential building and a housing development that is currently under construction: between them, they total 25.8 million euros, more than half of the total.

There are several major shareholders behind the vehicle: the minority interests that the MAB requires for a listing, as well as the architects Álvaro Rubio Garzón and Francisco Escudero López, who control more than 90% of the capital. According to the document published by the MAB, both created a property management company in 2001, based on real estate development for rental in the area of Leganés, “specifically in the main streets of the urban centre, in locations near the Universidad Carlos III and industrial property in the suburbs.”

AP67 will be added to the fifty-one socimis that are already present in the MAB and to the sector’s main players, which are on the Ibex 35 and the continuous market: Merlin Properties, Colonial, Axiare, Hispania and Lar. In its debut, the company will be advised by the registered adviser Armabex. The Renta 4 bank will act as a liquidity provider.

Original Story: Idealista

Photo: Gtres

Translation: Richard Turner

 

Be Mate Teams Up With Fund Q Capital to Grow its Tourist Home Business

23 March 2017 – Expansión

The businessman Enrique Sarasola has found a new formula for accelerating the growth of Be Mate, the rental platform for tourist apartments, through which he is complementing his Room Mate hotel offering. The plan is to team up with the investment fund Q Capital, which will contribute €100 million of funding so that Be Mate can search for, adapt and manage between eight and ten apartment buildings in cities such as Madrid, Barcelona, Málaga and Sevilla.

“The project reinforces the idea that you can’t block progress”, explains Sarasola to Expansión, who also highlighted the importance of the fact that a “team as strong” as the one at Q Capital has decided to back the management of entire apartment buildings. The faces behind that firm include Íñigo Olaguíbel, Borja Oyarzábal and Borja Pérez.

Q Capital, founded in 2016, channels direct investments in Spain from Qualitas Equity Partners. Its objective is to find returns in segments such as SMEs and other niche areas not served by traditional financial operators.

Medium and long stay apartments

This alliance is going to give a boost to the concept already tested by Be Mate in the Plaza de España Skyline building: the management of entire buildings of tourist apartments. This business, inaugurated last year, is proving “a success”, explains Sarasola.

The novelty is not only in the financing, which is going to be provided by Q Capital, but also in the fact that Be Mate is going to go beyond the tourist home service to offer “apartments for medium and long stays, and for corporate use”. According to Sarasola, “it is another change that adapts to our times. We are pioneers in this field, but it is because we listen to our clients and we have identified that the need exists”.

Of the ten or so buildings planned, Be Mate has already identified five. The acquisitions will be undertaken over the next three years, initially in Spain, which is the “priority” market, but not at any price. “We will invest here for as long as the regulations are not prohibitive. If that changes, we will go overseas”, he warns.

Be Mate broke its own revenue record last year, by generating sales of €6 million, 10 times more than during the previous year. It sold 80,000 overnight stays for 30,000 clients, 40% of whom came from international markets. The company offers 10,000 apartments, 600 of which it manages exclusively.

Original story: Expansión (by I. de las Heras)

Translation: Carmel Drake

Sharp Fall in House Purchases by Brits in Alicante due to Brexit

29 December 2017 – El Boletín

A survey of real estate professionals conducted by the College of Real Estate Agents (API) of Alicante reveals that Brexit is having a significant effect on the real estate market in the region. The research indicates that many areas in the province, in particular along the coast, have experienced a notable decrease in the volume of house sales to British buyers in 2017 and that this trend is forecast to intensify in 2018.

The API College of Alicante points out that “traditionally, Brits have represented one of the largest groups of house buyers in Alicante, the province where the most homes and apartments are sold to foreigners in all of Spain”. Some of the Real Estate Agents are certain that 2017 has seen the lowest volume of sales to British citizens in decades”, although the situation is not being replicated with other overseas buyers.

Moreover, API’s research also shows that the decrease in sales to British citizens does not necessarily mean a reduction in the volume of purchases by foreigners, given that the gap being left by the Brits is being covered by foreigners from other countries. The report indicates that Belgians, Dutch, French, Norwegians, Germans and Russians will be the most active house buyers in 2018. People from up to 125 different countries are now buying homes in the province of Alicante.

Moreover, Brexit is not only affecting house purchases, it is also being felt in that more and more British citizens are putting their properties up for sale in the province of Alicante. In summary, more than 90% of the Real Estate Agents that work with foreigners have already felt the effects of Brexit on their operations and are convinced that the trend may yet intensify further during the course of next year.

Prices on the rise

Another conclusion from this study is that “nine out of every ten APIs interviewed are convinced that house prices in the province of Alicante will continue to rise in 2018, with increases that could range between 3% and 10%, depending on the area and type of home”. The average forecast increase in house prices amounts to around 5% in the province of Alicante as a whole.

The Real Estate Agents are also convinced that, after a year marked by the recovery of the sector, 2018 is going to be a year in which house purchases will continue to rise. “The second-hand market is going to continue to perform well, but 2018 will probably be the year in which new builds start to take off again, in towns where there is still land available”, explained Marife Esteso, President of the API College of Alicante.

In 2018, the worrying upward trend in the rental market is also expected to continue, where the gap between high demand and scarce supply, together with the diversion of homes to holiday lets, means that prices are going to keep rising. In this sense, many real estate agents indicate that the rise in holiday rentals is being driven not only by the higher returns on offer but also because holiday lets allow owners to avoid the problems of non-payment and property damage that are typically caused by long-term tenants.

Original story: El Boletín (by E.B.)

Translation: Carmel Drake

Ibercaja Sells 2 Logistics Warehouses In Plaza For €19M

26 October 2017 – Heraldo.es

Ibercaja has sold a logistics complex measuring 27,096 m2 in Plaza (Plataforma Logística de Zaragoza) to the fund manager Savills Investment Management for €19 million. The sale, closed last week, represents the highest price paid per square metre in an individual operation in the history of the logistics platform.

The complex that Ibercaja has divested comprises two large warehouses with long-term leases to Mercadona and the German operator Kuehne Nagel, respectively. Sources familiar with the transaction explain that the objective of the new buyer is to maintain these uses, given that it was precisely the long-term rental agreements over both warehouses that raised their interest in the first place.

The competitive process for the sale, in which more than 25 possible buyers expressed an interest, was coordinated by the portal specialising in real estate auctions addmeet.com, which has now managed several important sales in Zaragoza and Aragón.

The move by Ibercaja sees it deepen its commitment to the divestment of its non-strategic assets, as it seeks to focus all of its efforts and resources on boosting the banking business and the digital transformation, whereby fulfilling the roadmap that the entity set itself for the strategic cycle 2015-2017.

The buyer, the Savills Investment Management group, plans to integrate its new assets into the European Logistic Fund II fund, aimed at acquiring top-quality logistics products around Europe. Savills Investment has 18 offices in Europe and Asia and manages properties around the world worth €16,000 million. “We are very happy with the completion of this operation in a very competitive market. It is a high-quality asset in Plaza, which provides the fund with a solid and defensive distribution platform”, said Michael Reinmuth, Director of Savills in Spain.

Plaza has seen investments worth €140 million so far this year

This new sale, at a price of €701/m2, is the most significant in Plaza’s history in terms of an operation involving real estate assets only. Previously, higher prices per square metre have been paid in other transactions but only when they also included the purchase of companies, according to local sources in the sector.

With this latest deal for €19 million, Plaza has recorded investments from various operations amounting to €140 million so far this year, an amount that helps consolidate the position of the logistics platform in Zaragoza (…).

Original story: Heraldo.es (by V. M.)

Translation: Carmel Drake

ECI Sells 40% Of Torre Serrano To Infinorsa For €50M

14 September 2017 – Expansión

El Corte Inglés has sold 40% of the company Iberiafon, owner of the Torre Serrano building in Madrid, to the real estate company Infinorsa for €50 million, according to sources at the distribution giant.

The firm that has acquired the property, which is owned by several European funds, already owned 60% of Iberiafon’s share capital and also owns other buildings in Madrid, such as Torre Europa.

This operation, which forms part of the distribution group’s divestment plan, effectively assigns a value of €125 million for 100% of the property. The building’s current tenants include the Masaveu Group and the firms GVC Gaesco and Beka Finance, amongst others.

Located at number 47 on one of the most exclusive shopping arteries in Madrid, next to the El Corte Inglés department store on Calle Serrano, the tower has 13 floors, which have a combined surface area of 20,000 m2, including a 5,700 m2 car park.

Half of the total space is used for offices, whilst the shopping area occupies 4,300 m2, which will continue to be leased to the group chaired by Dimas Gimeno, according to the press release.

El Corte Inglés closed its last tax year, from March 2016 to February 2017, with a 2.4% increase in its net profit, to €161.86 million. That saw the group record three consecutive years of growth, whilst the gross operating profit (EBITDA) soared by 7.5%, to reach €981 million, according to the distribution giant.

Specifically, the profit, the highest in the last three years, has been affected by €178 million relating to “disengagement plan”, which has affected 1,341 people.

Original story: Expansión

Translation: Carmel Drake

Airbnb, HomeAway & Wimdu Outperform Traditional Long-Term Lets

23 February 2017 – El Confidencial

Traditional rental agreements (…), which are governed in Spain by the Urban Rental Act (LAU) and which allow a tenant to live in a home for an extended period of time, are starting to become scarce in some very specific areas of large cities such as Madrid and Barcelona. They are falling victim to the unstoppable progress of so-called tourist apartments or short-stay lets (available on a daily, weekly or monthly basis), which have grown like wildfire in recent years, thanks to the development of platforms such as Airbnb, HomeAway, Wimdu, Niumba, Rentalia and Booking.

Users consider that these assets offer a much more flexible and economic alternative than the product offered by the hotel sector. Meanwhile, homeowners have found a business niche and are generating extra income both from their own homes and from properties acquired as investments. Moreover, their yields are ranging between 4% and 8%, which is well above those offered by other traditional investment products at the moment, including traditional rental properties.

To give us an idea of the volumes being handled by these types of platforms, Airbnb has 13,000 online adverts in the city of Madrid, whilst Idealista has 8,700 adverts for rental homes. In Barcelona, the online platform has 20,000 adverts compared with 6,400 on the real estate portal.

Nevertheless, the problem is limited to very specific locations, such as Malasaña and Chueca in Madrid and Las Ramblas and El L’Eixample in Barcelona. There it is almost impossible to find a long-term rental home. As such, the few products that do come onto the market are leased in a matter of hours and at much higher prices than they were just a couple of years ago. (…).

Rental prices in Malasaña now rarely fall below €800 for a one-bedroom flat measuring just 40m2, but on average, homes there cost between €1,200 and €1,300 per month. On the real estate portal Idealista, there are a few 60m2 flats for rent, for which the owners are asking €2,700/month and even €3,500/month for luxury properties.

Emergence of individual investors

Airbnb defends the “home-sharing” concept, saying that it does not remove available housing from the market because people who live in these homes are still around, they are just sharing their primary residences. Some of these people are using the money to pay for their housing costs”, says the platform. “Studies have been carried out in several cities around the world, showing that the number of homes advertised on Airbnb for exclusively professional use is too low to have any impact on the housing market”.

Nevertheless, the high returns offered by tourist apartments have led many individuals and small-time investors to buy homes in these areas, to subsequently sell them or rent them to tourists. Specifically, individual investors are behind 3 out of every 10 house sales in Madrid, according to data from Tecnocasa. (…).

A very localised phenomenon

What is happening in Malasaña is also being seen on some other very specific streets both in Madrid and Barcelona, where rental prices have really soared. According to Urban Data Analytics, rental prices have risen by more than 20% in neighbourhoods such as Sant Andreu and Sants-Montjuïc, and by 15% in areas such as Gràcia, where prices decreased slightly during the crisis. (…).

According to Bankinter, in its latest report about the Spanish residential sector, these price increases will not last forever. “In our opinion, these double-digit increases, which are driven by a shortage of supply and the boom in tourist rentals, will not last in the long term, nor will they spread to the market as a whole, especially if new legislation is introduced to limit the number of tourist homes a given owner may rent out”.

Sources at Airbnb insist that “The increases in house and rental prices are due to normal factors at play in the real estate market, including: the high demand to live in cities, the appeal of real estate as investment property, the lack of space to build new developments…also, the pressure on house prices is not just being seen in Barcelona, it is happening in all of the large cities around the world (….). House prices were rising before Airbnb ever existed (…)”.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

DIA & Blackstone Close Largest Industrial RE Transaction Since 2013

11 March 2015 – ABC

The two companies have signed a contract for the rental of logistics buildings covering 30,000 square metres.

Logicor, the logistics platform owned by Blackstone, has signed a long-term rental agreement with the supermarket chain DIA for 30,000 square metres of space, which makes it the largest lease transaction in the industrial sector since 2013.

The rental contract covers a substantial part of a 37,000 m2 warehouse in the Miralcampo Logistics Park (in Corredor de Henares), a building that was acquired by Logicor at the beginning of 2014, according to JLL, the real estate consultant that has advised this transaction.

Logicor is the largest owner of logistics warehouses in the Iberian Peninsula, with a portfolio of 960,077m2. According to Logicor’s director general for Southern Europe, the positive changes in the real estate investment market in Spain are starting to be reflected in occupancy rates in the logistics sector.

That, combined with the limited availability of large, modern logistics warehouses in Madrid, has meant that tenants are under more pressure to hire the highest quality products, he added.

The CEO and Chairman of Logical, Mo Barzegar, highlighted that this transaction reflects the company’s investment strategy to purchase functional warehouses, close to urban areas, that are attractive to clients. JLL España advised Logicor in this transaction.

Original story: ABC

Translation: Carmel Drake