Tag: McArthurGlen

Malaga, or How the Sun is Shining Again on the Costa del Sol

14 August 2018

With sales and prices in rapid ascent, the real estate sector is firmly committed to continuing the recovery of the property market in the Andalusian city.

The sixth largest city in Spain, with 569,002 inhabitants in 2017, Malaga is the Andalusian city where housing prices have increased the most in the first quarter of this year, according to data from Urban Data Analytics, with a year-on-year increase of 19.4%. According to data from the Ministry of Development, valuation prices rose by 10.8% to 1,506.8 euros per square meter. The increase was also substantial compared to the fourth quarter of 2017 when the square meter in Malaga was priced at 1,440.40 euros per square meter.

The recovery of the residential property market in the city on Spain’s Costa del Sol can be largely explained by the rapid pace of acquisitions, which are being carried out by domestic and international buyers, and which have steadily increased in recent years. While there were around 3,150 transactions in 2013, there were close to 5,000 in 2015 and over 7,000 in 2017.

Also, compared to the token level of new construction in other Spanish cities, new developments in Malaga have been substantial. Just in the first quarter of 2018, 242 purchases of new homes were finalised in the city, equivalent to 12.3% of the total.

In its report, Vision 2018: the Real Estate Market in Malaga, the consultancy Savills Aguirre Newman notes that the market’s strength in the city will cause the Costa del Sol to reach record sales for the year, adding that Malaga has positioned itself as the main power in Andalusia, even ahead of the capital, Sevilla.

Thus, the consultancy stresses that construction began on 5,236 homes in the Andalusian city, compared to the 2,980 in the capital. As for deliveries, Malaga finished a thousand more homes than Sevilla: 2,580 finished units compared to Sevilla’s 1,511.

Projects underway in Málaga

Faced with this data, operators such as VBare, Inbisa and Quabit have already finalised operations in the city, which also stands out for the demand for land for logistics platforms, large commercial projects and student residences.

In April, Quabit stated that it owns 200,000 square meters of land in the province of Malaga for the construction of 1,700 homes, equivalent to 20% of the developer’s portfolio of land. For its part, VBare completed the acquisition of 14 homes in the city in June for 1.35 million euros for placement on the rental market, for which it expects a profitability of approximately 5.1%. Gilmar, a real estate agency, also chose Malaga’s city centre as the site of its 32nd office.

With the presence of 40,087 companies, of which 87.1% are in the service sector, Malaga’s office market has also once again taken off. Another report by Savills Aguirre Newman places the occupancy rate of offices in the city’s prime area at 90%. Rents are also increasing, reaching 18 euros per square meter in the central street Larios. According to the consultancy, the trend will continue in 2018, which will cause buildings that have been unoccupied for nearly a decade to be taken up. The demand for land for logistics platforms is also increasing in the city, particularly for areas exceeding 5,000 square meters, which are rare.

On the commercial side, one of the larger projects underway is the Designer Outlet Centre, which Sonae Sierra and McArthurGlen have added to the Plaza Mayor shopping centre, with an additional 85,198 square meters (added to the rest of the existing complex), housing a total of 107 stores.

Also, the new wave of student residences has also reached the Andalusian city. Syllabus, a subsidiary of Urbania, will build a new student residence in the historic centre of Malaga in a ten million euro investment. The new development will have 143 rooms and an area of 4,600 square meters and will be ready by 2020.

Lastly, in June, the Malaga City Council approved a project for a luxury macro hotel in the city’s port. The hotel will be a 150-meter-high, 45,000-square-meter building that will be developed by the Qatari investor Abdullah Al Darwish. The building, which will involve an investment of 116 million euros and will be located in the Dique de Levante, will begin construction in 2020 and will be inaugurated three years later.

Original Story: EjePrime – C. De Angelis

Translation: Richard Turner

 

Sonae Sierra & CBRE GI Put the ‘Max Center de Barakaldo’ Shopping Complex Up For Sale

10 February 2018 – El Correo

Bizkaia is preparing for a major commercial and real estate revolution. Sonae Sierra, the multinational owner of the Max Center shopping complex in Barakaldo has put the property up for sale, 15 years after acquiring it from ING Real Estate. The property was opened in 1994 and was extended in 2002 with the addition of the adjoining Max Ocio building. The latest transaction forms part of a national macro-operation, given that the portfolio up for sale also includes two other large complexes: the Gran Casa de Zaragoza and the Valle Real de Santander.

The company, together with its partner CBRE Global Investors, with whom it jointly shares the ownership of the three large shopping centres, calculates that it will receive proceeds of around €500 million from the sale, according to sources in the sector. Spokespeople for Sonae avoided providing further details about the operation to this newspaper on Thursday. They announced that they only discuss “closed” operations and that the installations in Kareaga, which have an approximate surface area of 60,000 m2 “are still operating in a normal way”.

Nevertheless, the negotiations have been underway for several months. Although they are satisfied with the progress of the business, which is enjoying growing sales and which seems to have left behind the worst years of the crisis, the current owners are looking to generate revenues from the sale of these assets to invest in other projects in different parts of Spain. Sonae Sierra, which is controlled by Hugh Grosvenor, the Duke of Westminster and the richest man in the United Kingdom, has a presence in seven countries with 46 buildings worth almost €7 billion. It is currently working alongside the British operator McArthurGlen on the imminent opening of a luxury outlet in the Plaza Mayor de Málaga complex, which will involve a disbursement of €140 million.

The company is looking to take advantage of the current times in the Spanish real estate market, which are being characterised by a great deal of interest from funds and overseas companies. Last year, investment in the retail sector rose in a spectacular fashion – by 31% – to reach €3.9 billion. If this latest sale goes ahead, the owners of the Max Center, which is home to 133 stores, as well as a sizeable restaurant and leisure area, would complete their second divestment process in Bizkaia in two years.

At the beginning of 2016, they sold the Zubiarte de Bilbao complex to Activum SG Iberia Fund for €150 million (…).

Modernisation of its roof

Now, all eyes are focused on the Max Center, which has just invested €3.5 million on the modernisation of its roof. Nevertheless, the improvements are not going to stop there, given that the complex is soon going to be subjected to a complete renovation. The changes undertaken in recent months to renew the roof of the building, which houses a parking lot, included the resurfacing of the surface area and its signage, as well as improvements to the lighting and security in the parking area.

In addition to the successive renovation projects, the Max Center has also improved its sustainable profile with several actions aimed at reducing water consumption, improving energy efficiency and increasing recycling rates. Together with these interventions, management has been working on an intense campaign to increase the commercial offering and renew the trust of its customers who are being offered increasingly more choice by nearby competitors, such as Megapark and Ballonti (Portugalete). Some of the new brands that have chosen the Max Center and are about to open stores there include Pablosky, Indie&Soul, San Carlos, Trendie, Loop&Coffe and Burger King. Meanwhile, other stores, which are already established, such as the footwear shop Foot Locker, have undergone major renovations.

Original story: El Correo (by Luis Gómez)

Translation: Carmel Drake

McArthurGlen to Open 5 Luxury Outlet Centres in Spain

3 January 2018 – Cinco Días

The largest retail asset real estate firm in the world has set its sights on Spain. Simon Property Group will operate through its subsidiary in Europe, called McArthurGlen, in which it holds a 50% stake. This European firm, which specialises in luxury brand and premium outlets, plans to open five such centres in the country, according to José Luis Arenas, Director of Development at McArthurGlen in Spain, speaking to Cinco Días. In total, it plans to invest €750 million, with an average investment of €150 million per site.

McArthurGlen’s first project is already under development. It involves an outlet for luxury brands, which is being built as an extension of the Plaza Mayor shopping centre in Málaga. The firm will invest €140 million in the initiative, together with its partner Sonae Sierra, and its doors are due to open at the end of 2018 (…).

According to Arenas, “We are looking for more short-term opportunities in the north and east of Spain and we will end up entering both Madrid and Barcelona over the medium term” (…).

McArthurGlen is a company headquartered in London and founded in 1993 by the American Joey Kampfer. It is a large developer of designer outlets, given that it owns 24 centres in 8 European countries as well as in Canada, which house 3,000 stores for 1,000 brands in total. Simon Property, as the owner of 50% of the share capital, provides it with an enormous investment capacity. Meanwhile, that US real estate company, under the legal structure of a REIT or Socimi, owns 216 shopping centres around the world and has a market capitalisation of $54.95 billion (€45.7 billion), making it the largest real estate company on the planet (…).

McArthurGlen has joined forces with Sonae Sierra for this first project in Málaga, but has not ruled out teaming up with other property developers in the future. (…). Sonae Sierra is, in turn, a joint venture, between the Portuguese holding company Sonae and the British firm Grosvenor – belonging to Hugh Grosvenor, the Duke of Westminster -. Sonae Sierra owns 76 shopping centres in 14 countries (…).

In terms of the Andalucían outlet, Arenas has set the objective of having between 2 and 3 million visitors per year. “Plaza Mayor by itself already receives more than 10 million people per year and we are going to benefit from those consumers and increase the numbers with new clients. We will also attract tourists”.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Sonae Sierra Returns To Spain With €170M

19 October 2016 – Expansión

The real estate company owned by the Sonae group and the fund Sierra are going to invest in the Spanish market once again. The company, which already owns six shopping centres in Spain, and manages two more, has set itself the objective of investing at least €170 million in the country over the next five years. Of those, €115 million will be spent on the large luxury brand outlet that it is constructing in Málaga together with the US firm McArthurGlen.

“We have started to request the licences and we will begin construction at the beginning of 2017, with the aim of opening the centre in 2018”, said Alexandre Fernandes, Head of Investment for Europe. The remaining €65 million will be spent updating and expanding some of its existing shopping centres in the country. “We are not planning to sell any of our centres in Spain, but rather invest in them and look for opportunities to buy”, said Fernando Oliveira, CEO of Sonae Sierra.

In Spain, the company had decided to divest its least strategic assets. Nevertheless, its strategy has changed radically and Sonae Sierra is now focusing on growing in Spain. “The outlook has completely changed since the end of 2013, financing has returned and all of the brands want to expand their businesses”, said Oliveira.

Partnerships

In addition, the real estate company has decided to launch a new business line dedicated to the search for and management of co-investment commercial projects. “We see that international funds are expressing a lot of interest in investing in Spain, not only in shopping centres and high street premises (but also other assets). We think that there is a market for them and that we can help them with their investments and then continue with the management of those properties”, said Fernandes.

These joint companies, in which Sonae Sierra will hold a minority stake and will manage the acquired assets, will operate as Socimis, given that “that it the structure that is most attractive for investors due to the tax advantages”, say sources at the company. The first of these partnerships was closed in June, with the fund CBRE Global Investment Partners, with which it jointly purchased two shopping centres in Portgual and another one in Spain.

At the global level, the company aims to invest €2,300 million in the development of new real estate projects over the next five years and to continue growing its service offering to third parties.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake