Tag: Madrid

Metrovacesa To Build Homes & Hotels In Clesa Factory

28 May 2015 – Expansión

The real estate company and the College of Architects are holding a competition for ideas to renovate the main building of the complex in Madrid and develop homes, hotels and retail spaces.

Recover an industrial area that was abandoned years ago, and integrate it into the new urban plan for Madrid. That is the ambitious project that the real estate company Metrovacesa finds itself immersed in.

The company has decided to convert the Clesa factory – the former dairy brand of the Ruiz Mateos group – in Madrid, into a residential area with all sorts of amenities, as well as hotels and retail spaces. The project includes the demolition of 16 industrial warehouses that make up the complex, but one building, created by the architect Alejandro de la Sota, will be maintained. “The disused building was neglected by the former tenants, which constructed adjoining properties. We have been working on (this project) for months and in the end, last Friday, we got the green light from the Town Hall of Madrid for the classification (of the property) as a protected building”, explained Carlos García León yesterday, Director General at Metrovacesa.

The area, located on Avenida Cardenal Herrara Oria in Madrid, next to the Ramón y Cajal hospital and with 90,000 square metres of buildable area, has been empty for the last six years, when the business conglomerate owned by the Ruiz Mateos families ran into financial difficulties. Metrovacesa has been the joint owner of the factory since 2006 and in 2013, it became the sole owner of the property.

Now, and with an investment of more than €30 million, Metrovacesa will reduce the buildable surface area to 70,000 square metres, of which 9,000 m2 relate to De La Sota’s protected building; the remainder will be split as follows: 60% for homes, both unsubsidised (free homes) and subsidised social housing; and 40% for tertiary properties.

“We have listened to the requests made by people in the area, such as the families of patients at the hospital, who do not have retail areas or hotel rooms to stay in”, explains José Antonio Granero, Dean of Madrid’s Official College of Architects (el Colegio Oficial de Arquitectos de Madrid or COAM).

Competition for ideas

The first phase of this new urban development will feature the protected building. To this end, Metrovacesa has teamed up with COAM to hold a competition for ideas to renovate the property, designed in 1959 and completed in 1961, to find a new use for it. “The competition will be announced next week once the Town Hall’s approval of the change to the general plan has been published in the BOE”, explain sources at COAM. The decision to award the project will evaluate both the proposals for the provision of services in the area, as well as their technical and economic feasibility. Interested architects may submit their proposals to a panel comprising directors from Metrovacesa, architects from COAM and members of Madrid’s Town Hall.

For the renovation of this space alone, the real estate company will invest between €15 million and €20 million.

Furthermore, Metrovacesa has signed an agreement with Adif for the transfer of 1,000 square metres of space, which the railway manager will use to improve the station that is currently closest to the site. “Adif is going to build a footbridge to link the area with the Ramón y Cajal hospital, which is currently separated from the complex by the train tracks.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Madrid to Revive the Heart of Its Financial District

25 May 2015 – Expansión

PROJECT / Large realtors as GMP, companies historically present in the area such as El Corte Inglés and the Madrid City Hall come together to renovate Azca, the capital’s business district.

On May 8, Corporación Financiera Alba, the investment arm of the March family, officially announced the purchase of Ahorro Corporación’s headquarters, a building located on Paseo de la Castellana, 89, in Madrid for 147 million euros.

Months earlier, in January, the GMP real estate company bought another property, located at number 77, for a total of approximately 90 million.

In December, El Corte Inglés acquired a plot located next to Gmp’s new building, for which it shelled out 136 million.

In total, these operations represent nearly 400 million euros of investment within a radius of barely 300 meters and a new stage for Azca – the area that is being revamped so it can maintain its position as the capital’s financial district, which it has held for decades. “The purchase of the building on Castellana 89 is a financial investment within our aim to boost buying in ‘prime’ areas, and that is a fully operational property in an unbeatable area,” explained managers at Corporación Financiera Alba.

The new owner of Castellana 89 rules out renovating the building, since its seller, Ahorro Corporación, and the other tenants will remain in the building. “It has been recently renovated and has very acceptable conditions,” they added.

“We believe in Azca. That’s why we have two buildings in the area, but there are some improvements to be made in the area, not only in the property,” says Xabier Barrondo, CEO of GMP. The real estate company owns office buildings: Torre Ederra, newly acquired and located on Castellana 77; and Torre BBVA, which the company bought in a pool of properties eight years ago and that is also situated along the Castellana.

In both properties, the company is working on renovation plans. “We bought 77 in January. It had been vacant for four years and our goal is to renovate it entirely; give more space in the interior and height to the floors, and the facade will have a new look to turn it into a representative building,” explains Barrondo. Meanwhile, construction works in the famous Torre Ederra, former headquarters of Saint Gobain, have already begun and are expected to finish in 2017.

Torre BBVA

 In the case of Torre BBVA, the landmark building is still occupied by the bank, which will leave it in the coming months, although the bank’s senior management will remain in the upper floors. That’s when GMP will address its renovation, with works on a much smaller scale than in its neighbor, building 77. “Number 81 is a Madrid icon. It is a landmark and has a certain degree of protection, making it a highly valued property. The renovation will consist of an upgrade of the office area, with more open and flexible spaces, while sprucing up the facade will barely be noticeable.”

Of the 38,000-square-meter space on Castellana 81, 32,000 square meters of offices, currently occupied by BBVA, will be rented out to various tenants, while  building 77 is meant for a single tenant.

Not only is GMP renovating its two buildings, but it has also signed an agreement with the city to refurbish two public squares (“plazas” in Spanish) next to Castellana 77 (Torre Ederra). “We want to improve access (which is now made possible through an interior entrance in Azca’s network of pedestrian tunnels) both in terms of aesthetics and accessibility.” In total, the operation consists of renovating 3,000 square meters. Works that are planned to start within a year.

Renovating pedestrian space will cost 668,565 euros. “With the renovation of the two buildings and the access area, we will invest 45 million euros,” says the CEO of GMP.

The joint agreement to renovate access from Torre Ederra to Castellana is part of an action plan that the city of Madrid signed six months ago with several property owners in the area to revamp Azca. During the first phase of the project, they will renovate Plaza Carlos Trias Bertran, in the heart of Azca and where the iconic skyscraper Torre Picasso, owned by Amancio Ortega, is located.

In this renovation, which will cost approximately 1.9 million euros, the “obstacles and physical aspects that create nooks, hinder vision and feeling about lack of safety” will be eliminated, as explained at Madrid City Hall. The city’s Council will cover 26% of the investment and the rest will be covered by the contributions of five owners of properties in Azca: El Corte Inglés, Metrovacesa, Astaez 2011 and insurance companies Mapfre and Spain SA National Insurance Company.

In addition to these two operations that have already been given the green light, new projects to upgrade the area might soon be accepted as well. “This initiative is meant to keep Azca as the economic and financial heart of Madrid and, at the same time, restore an area that is meant for leisure, culture and the general public” said Ana Botella, Mayor of Madrid during the presentation of the project.

Original story: Expansión (by R. Ruiz)

Translation: James Leahu

The Owner Of McKinsey’s HQ Puts Its RE Portfolio Up For Sale

19 May 2015 – Expansión

 More than €200 million / The Cotoner family is selling six buildings in Spain and two in Paris

A new batch of office buildings has sparked interest amongst large investment funds, Socimis and family offices. There are eight buildings in total – six in Spain and two in France – located in some of the most iconic streets of both countries. In total, they occupy a combined surface area of more than 27,000 m2 and generate more than €3 million in annual rental income.

The assets are owned by the company Marzabal S.L., created by the Cotoner family to manage its real estate assets. They include eight buildings: two in Pairs, one in Navarra, another one in Bilbao and four in Madrid. The jewel in Marzabal’s crown is located in the capital: the current headquarters of McKinsey. The consultancy firm has occupied the building, located on Calle Sagasta 31, for years, as well as several floors in the adjoining building. Both are owned by the company now for sale.

In total, the building houses 10,114 square metres of office space (fully leased) and 93 parking spaces; it generates annual rental income of €1.64 million.

Rental income

The other buildings in Madrid include a historical building (from 1923) on Avenida de Felipe II; another one on Paseo de Eduardo Dato; and a third on Francisco de Rojas, occupying more than 4,400 square metres and leased to several tenants, including the distance learning university, Uned. Currently, they generate rental income of more than €500,000 per year.

Marzabal also owns a residential building in Tudela (Navarra), built in 2013, measuring more than 2,650 square metres, which also houses several shops on its ground floor.

In Bilbao, the company owns a residential property measuring around 800 square metres, located in the old town, next to the San Francisco de Asís church.

The company for sale is the owner, in turn, of a company based in Denmark, which owns two office buildings in Paris. One of them, located in the “second district” of the French capital, houses office space measuring 2,100 square metres and is fully leased to the private equity company Partech International.

It generates rental income of almost €900,000 per year.

The second asset in Paris includes four office buildings measuring 4,200 square metres and 39 parking spaces. The property, located on Pereire Boulevard does not currently have any tenants.

Bids are expected to amount to more than €200 million for the batch of assets, although the book value of the Spanish assets amounts to €68 million, with share capital of €10.4 million and net financial debt of €34 million. The Danish company, which owns the two properties in France, is worth €62 million; its share capital amounts €37 million and has net financial debt of €24 million. The Spanish entity’s main creditors are BBVA and Santander; the Danish entity’s main creditors are Crédit Foncier and BNP.

Bids are expected to be received during the first half of June and the process will close during the following three weeks. The sale is being managed by the private banking division of Banco Santander and the firm Aiga Investment.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

CBRE: Madrid Is 6th Most Attractive City For RE Investment

19 May 2015 – Expansión

Madrid is the sixth most attractive city in the world for real estate investors, behind London, Tokyo, San Francisco, Sydney and New York, according to the Global Investors Intentions Survey, compiled by the real estate consultancy CBRE, based on responses from 700 international investors.

Thus, the Spanish capital is more attractive that most other major cities, including Paris and Los Angeles, thanks to a 98% increase in the volume of real estate investment in 2014 with respect to the previous year; the second highest increase after San Francisco, which rose by 126%.

The study notes that optimism has returned to the international investment market thanks to improvements in the economic outlook and in confidence, although it underlines the intense competition that exists when it comes to acquiring assets and the doubts that still exist about the weakness of the economy.

Thus, 53% of international investors expect to increase their exposure to the real estate sector.

Moreover, it seems that demand exceeds supply and that there is significant interest in trans-regional transactions, with Western Europe being the most favoured region, followed by Asia Pacific.

By sector, offices are the assets of choice for 33% of investors, whilst retail sales have experienced the largest decrease.

It also notes the increased interest in logistics warehouses, up from 14% last year to 17% in 2015.

The acquisition of real estate debt is another option that investors are seeking, as well as student accommodation (halls of residence), assets relating to the health sector and retirement homes.

International investors seem to be willing to take on increasingly more risk, in search of higher returns. 51% of those surveyed said that this year they will focus on opportunistic and value added assets, whereas last year only 43% were interested in such assets.

This increase has been observed above all in the United States and in the regions of Europe, the Middle East and Africa. By contrast, there seems to be greater interest in prime assets in Asia-Pacific.

Original story: Expansión

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

Santander, BBVA & Sabadell Start To Build Homes Again

11 May 2015 – Expansión

Property development / The large financial institutions are constructing homes once again in light of the improved macroeconomic outlook, demand in certain areas and the aim of generating profits.

Real estate development is no longer a forbidden phrase in the world of banking. Several major banks have decided to resume the construction of new homes in light of the macroeconomic improvement and the need to capitalise on property inherited from the crisis.

Entities such as Santander, BBVA, Sabadell and Popular are now not only focusing on selling the homes that were foreclosed during the crisis, they have also started to construct new developments over the last few months. Most of these developments are located in Madrid, Barcelona and to a lesser extent, on the coast, where there is still a large stock of homes to sell.

Another catalyst of this new trend has been the reduction in the losses recorded by the real estate arms of these banks. During the first quarter, Santander’s real estate division lost €95 million, the smallest loss since it was created three years ago; and BBVA recorded a loss of €154 million, 37% lower than during the same period in 2014.

Thanks to this, the group chaired by Francisco González announced on Friday that it is studying 25 developments to construct 2,000 homes, and that it has already started another 12 developments to construct 630 million. This statement was made by Lorenzo Castilla, Commercial Director at BBVA Real Estate-Anida: “This is not about filling Spain with cranes, but rather about projects that make sense”, who spoke during Madrid’s International Real Estate Fair (Salón Inmobiliario Internacional de Madrid or SIMA).

(…)

Full balance sheets

As the BBVA director indicates, financial institutions still had more than €83,000 million foreclosed assets (on their balance sheets) at the end of 2014, of which more than €31,000 million related to land and €4,000 million to buildings under construction.

To reduce this burden, the entities are nowadopting two strategies: the sale of homes through their commercial networks, a channel that has accelerated over the last year; and the transfer of portfolios and joint ventures with institutional investors.

For the time being, the entity that has announced the most ambitious housing development plan has been Santander, which reported that it is developing 300 real estate developments, at its most recent results presentation.

Banco Sabadell is also stepping on the accelerator in this sense. Its real estate arm, Solvia, currently has 1,400 homes under construction, primarily in Madrid, Andalucía and Valencia.

Aliseda, the real estate company that renders services to Popular, has also announced an ambitious plan to enter the market for real estate development.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Why Did Foreigners Buy 72,000 Homes In Spain In 2014?

8 May 2015 – Expansión

When it comes to buying homes in Spain, foreigners are primarily motivated by the quality of life, the sun and good flight connections to their home countries.

The volume of house sales increased by 21.6% in 2014. In total, 365,594 transactions were closed, according to the Ministry of Development. It is clear that the real estate market has begun its recovery and, to a large extent, that is due to the interest that the real estate market is sparking amongst investors from overseas. Purchases by foreign residents in Spain have grown in recent months, partly due to the incentives that the Government has introduced – mainly the residence visa – but above all due to the opportunities offered by the real estate market here. Foreigners purchased more than 72,000 homes in Spain last year and the average transaction value was €152,000.

But, who are these foreigners that are purchasing homes in Spain and what is it that draws them to our country? “Many of these overseas investors are tourists who come to Spain on holiday and after spending time here, decide to invest in a second home”, says a study performed by TM Grupo Inmobiliario, which has a stand at the SIMA (Salón Inmobiliario de Madrid or Madrid Real Estate Fair) being held until 10 May. “They are primarily motivated by the quality of life, the sun and good flight connections to their home countries”, says the report, which concludes that the profile of the average purchaser is a man, aged 53 years-old, with children. On average, these purchasers have an annual income of €66,000. There is also a significant percentage of resident buyers in our country who are making Spain their new home given the improvement in the economic environment.

Britons are the nationality most interested in purchasing homes in our country; they accounted for 18.62% of all transactions closed by foreigners (in 2014). They are followed by the French (9.39%), Germans (7.25%), Belgians (6.90%), Italians (6.13%), Russians (5.83%), Swiss (5.83%), Chinese (4.14%) and Norwegians (3.74%). In recent years, interest from Russian nationals in Spain had increased significantly, but the decline in the Ruble and in the price of petrol (last year) reduced their desire to purchase. There is also a great deal of interest from Mexicans and Colombians in buying a home in our country, but in absolute terms the numbers are not yet significant. The vast majority of them have a high purchasing power and are buying second homes here.

The decrease in house prices has not affected all areas equally, but overseas investors are primarily interested in three main areas: the Mediterranean Coast (Barcelona, Alicante, Girona and Málaga), the Islands (above all Mallorca, Ibiza and Tenerife) and Madrid.

Original story: Expansión (by E.V.)

Translation: Carmel Drake

Spain property: Madrid waits for the signal to ‘go’

27 April 2015 – Financial Times

Is the influx of Latin American buyers a sign the capital has turned a corner?

Over the past decade and a half, making even a modest investment in Madrid’s housing market has been a bit like taking a rollercoaster ride. Since the market reached its peak in early 2008, average house prices in Spain have dropped by 35 to 40 per cent, according to a report issued in March by the Spanish Savings Banks Foundation, known by its acronym Funcas. New developments on the outskirts of Madrid have been some of the hardest hit.

Other figures suggest an even greater drop in values: also in March, the Spanish property portal Fotocasa.es calculated that the average home in Spain has lost 45 per cent of its value since the peak of the Spanish housing boom, with values in Madrid (a 44.6 per cent drop) representative, more or less, of Spain as a whole.

But both Funcas and Fotocasa.es report glimmers of light at the end of the tunnel: Fotocasa.es recorded a 1 per cent increase in home prices in Madrid in February, while Funcas says that the Spanish housing market is now in an “incipient, gradual recovery”.

As in Barcelona and the Balearic Islands, where small price rises have also been recorded in recent months, overseas buyers are helping to create a mild sense of optimism.

In Madrid, the most enthusiastic foreign homebuyers are heading from across the Atlantic, rather than Europe, according to Alberto Costillo, prime residential director at Knight Frank Spain. A “perfect storm” is bringing a new wave of wealthy Latin American house-hunters to Madrid, particularly from Mexico, Colombia and Venezuela.

“Madrid has advantages of culture and language, and Latin American buyers have long thought of Madrid as a safe haven. But with an improving Spanish economy, and the recent fall in the value of the euro [Latin Americans are more likely to have savings in dollars than euros], they see now see a real opportunity here,” says Costillo.

With its pretty boating lake and rows of statues, many wealthy foreign buyers look to purchase property near the city’s celebrated Retiro Park.

In the grid-like Salamanca district adjacent to Retiro Park, Knight Frank is selling a three-bedroom, two-bathroom apartment with 187 sq metres of living space, parquet floors and air conditioning in a building dating from the early 20th century for €1.47m.

In the well-heeled neighbourhood of El Viso, part of the Chamartín district north of the city centre, a 402 sq metre duplex apartment with four en suite bedrooms and a txoko — a combined cooking and dining space more commonly found in homes in the Basque Country — has an asking price of €4m. On sale through the agency Rimontgó, the unit has three parking spaces and the building has a pool and a gym for residents’ use.

“[El Viso is] quiet and exclusive, but also well-connected with the rest of the city and within easy reach of the downtown,” says José Ribes, director-general of the agency handling the sale. “This is a part of town most associated with aristocrats and intellectuals, but in recent years it has attracted people working in the financial sector, politicians and sportsmen.”

Salamanca and Chamartín are home to many of Madrid’s best restaurants. The capital has 12 Michelin-starred restaurants, compared with 23 in Barcelona. But Madrid is the only one of the two cities with a three-star restaurant — David Muñoz’s DiverXO, where dishes are called “canvases” and diners are asked to arrive “with an open mind”.

Central districts of Madrid are densely populated, but some of the city’s satellite communities, particularly to the northwest, offer more leg room for buyers. In Pozuelo de Alarcón, nestling among pine trees and benefiting from cool breezes from the nearby Sierra de Guadarrama mountains, a gated housing estate called La Finca is home to some of the capital’s wealthiest residents, including footballers from Real Madrid such as Cristiano Ronaldo.

Typical of the sprawling, cubist-style homes at La Finca is a five-bedroom, seven-bathroom house with almost 2,000 sq metres of living space. The property has a two-bedroom housekeeper’s apartment, a lift, indoor and outdoor pools, a gym, a sauna, a cinema, a wine cellar and a carport for six vehicles. On sale through La Finca Real Estate for €11m, the house stands on a plot of just over a hectare. However, according to one estate agent who prefers to remain anonymous, potential buyers are sometimes put off La Finca “because of its reputation as a playground for soccer stars”.

On Calle de Serrano, a broad, tree-lined avenue in the Salamanca district which is sometimes referred to as Madrid’s golden mile for its high-end shopping, there are few signs of the economic downturn, dubbed la crisis in Spain. However, the recession has hit some of the city’s public infrastructure.

Guillermo Bernardo, a former banker with two young daughters who now runs his own cabinet-making business, points to cutbacks in the maintenance of neighbourhood parks and gardens. “The Retiro is Madrid’s calling card, and it’s immaculate, but there is less money these days to clean and repair local playgrounds,” he says. “The perception that most people have is that the state of the economy hasn’t changed a lot but we may be about to turn a corner. Nothing is forever, not even la crisis”.

Buying guide

● Buyers should budget 6 per cent of the sale price to cover land registry taxes

● Estate agents typically charge vendors a commission of 3 to 5 per cent

● Madrid has the third largest metropolitan area in the EU by population size

● Units in a building without a lift are unpopular and may be difficult to resell

● Madrid has hot, dry summers and cool, usually sunny, winters

● Violent crime is rare but pickpocketing and bag snatching can be a problem

What you can buy for . . .

€500,000 A modern, 90 sq metre flat with two bedrooms in the Chamartín district of Madrid

€1m A 140 sq metre, three-bedroom apartment in the Salamanca district, within walking distance of Retiro Park

€5m A seven-bedroom house in El Viso with an outdoor pool on a plot measuring 1,000 sq metres

Original story: Financial Times (by Nick Foster)

Edited by: Carmel Drake

Standard Life Buys Revlon’s HQ In Barcelona For €30M

24 April 2015 – Expansión

The building was sold by the US bank Morgan Stanley

This is the third transaction involving a property in the World Trade Center Almeda Park (Barcelona) in less than a year. The Scottish fund Standard Life has purchased Revlon’s headquarters for almost €30 million. The building was sold by the US bank Morgan Stanley and the deal was advised by Cushman & Wakefield, who did not want to make any comments.

The acquisition closed by Standard Life comes after the Socimi Merlin Properties purchased two other buildings in this office complex last year. In August 2014, Merlin acquired the building leased (in its entirety) to AXA for €47 million. In January, it purchased another office block, which houses various tenants, for €37 million. In both cases, the buildings were sold by the Swiss bank UBS and the deals were advised by Cushman & Wakefield.

The property acquired by Standard Life has a surface area of 10,300 square metres and is mainly occupied by Revlon, but also has other tenants. It was built as a turnkey project for the Colomer Group, which used to be the distributor of Revlon’s line of professional products, and which was acquired by the US group in 2013.

This is not Standard Life’s first investment in Barcelona. In 2011, it acquired a plot of land in the 22@ district for €28 million where it constructed the 250-room Hotel Travelodge de Poblenou. It also used to own two buildings on Gran Vía de Barcelona, although it sold one of those, the one leased to the Catalan Institute of Finance (Instituto Catalán de Finanzas or ICF) to the Generalitat in 2008 for €30 million. This building formed part of a package of assets through which Standard Life entered the Spanish market in the middle of 2007 and which also included buildings located on Paseo de la Castellana, number 55 and Calle Serrano, number 73, both in Madrid.

Original story: Expansión (by Marisa Ángles)

Translation: Carmel Drake

Rothschild Launches Fund To Invest €400M In EU Hotel Sector

13 April 2015 – Expansión

The wealth management specialist creates a real estate (investment) vehicle.

Edmund de Rothschild, the group that specialises in the management of large fortunes, is breaking into the hotel sector. Aina is the name of the real estate fund that Rothschild has launched with the aim of purchasing four- and five-star hotels, (of between 90 and 150 rooms and between 150 and 450 rooms) in Europe.

Managed by Jaume Tapies, the former Chairman of the international network Relais & Chateaux, Aina is seeking to raise more than €400 million, and more than half of that amount will relate to debt. The roadmap predicts the signing of around 20 transactions with an average value of around €20 million to €25 million.

Aina has identified 29 cities of interest, due to their potential for tourism and business, where there is no excess supply or barriers to entry. The list includes two Spanish cities, Madrid and Barcelona, and two others may join them, namely Sevilla and Bilbao. “Spain is a priority country and now is a good time to invest there, as well as in Italy and Portugal, and in the major capital cities such as London, Paris and Amsterdam”, says Tapies.

Aina, whose investment plan will take two years to complete, has a process open with institutional investors to secure €200 million in funding, which is about to close. Edmund de Rothschild will be responsible for the administration and custody of the funds. The minimum investment required to participate is €1 million. The fund will have a life of seven years and the investment period will be three years. The gearing ratio will range between 40% and 50% of the total portfolio value, and on an exceptional basis, may reach up to 60% for a single asset.

Profitability

The strategy also centres on risk diversification. One single hotel may account for 25% of the investment, at most, and no single country may account for more than 40%. On the other side of the scale, profitability will also be high, at 15% p.a., based on the profitability of the rental income and the potential for the increase in the value of the assets.

The fund will focus on finding properties with discounts of between 25% and 40% of their market value. Subsequently, it will increase their values by between 25% and 30% by redesigning their operating models and will obtain a similar percentage from the sale of these properties to investors that have lower long-term profitability requirements.

So far, investors from Spain, South America, Australia and Asia have all expressed their interest in participating in Aina.

In addition to the management team led by Tapies, Aina has an advisory board, which includes, amongst others, Charles Petrucelli, former Chairman of the travel division of American Express; Antoine Corinthios, former Chairman of Four Seasons in EMEA; and Jean-Jacques Gauer, for Chairman of Leading Hotels of the World.

Gabriel García is also advising the fund; he owns the Hotel Orfila in Madrid and is the Chairman of Relais & Chateaux in Spain.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake