Acciona Sells a 135-Home Development in Madrid to Axa

20 March 2019 – Idealista

Acciona has completed the sale of a residential development in the Méndez Álvaro area of Madrid to the insurance company Axa. The project, which is going to be constructed under the ‘build to rent’ formula, will comprise 135 rental homes distributed over ten floors.

The property will have a swimming pool, gym and terrace, as well as one parking space and one storeroom per home. The construction work is expected to be completed in December 2020.

Original story: Idealista 

Translation/Summary: Carmel Drake

LaSalle Purchases Repsol’s HQ in Madrid for €100M

7 January 2019 – Idealista

A year of new real estate operations in Spain has begun and one of the first has been completed by an international fund. LaSalle Investment Management has purchased the future headquarters of Repsol in Atocha, in the Méndez Álvaro area of Madrid, from Royal Metropolitan for €100 million.

The building, located at number 23 Calle General Lacy, used to house the headquarters of the real estate consultancy Aguirre Newman, but that firm vacated the property in the summer to move to BBVA’s former tower on Paseo de la Castellana, 81 after it was acquired by the British firm Savills. LaSalle is a fund manager specialising in real estate investments. It is a subsidiary of the JLL group, listed in New York and the parent company of the real estate consultancy JLL.

Dating from the end of the nineteenth century, the building was formerly a Tabacalera warehouse until 1999, when Aguirre Newman undertook the renovation of the property to open its consultancy offices there. In the past, the asset was owned by the fund Zaphir, the manager linked to Aguirre Newman, although it has changed hands several times before ending up with another manager linked to a competitor firm.

LaSalle is one of the 20 largest managers of real estate funds in the world by properties under management, with an asset portfolio worth more than €53.2 billion at the end of the third quarter 2018. With its central headquarters in Chicago, the fund is present in 17 countries. The management firm was reborn following the merger of the British company Jones Lang Wootton and the US entity LaSalle Partners in 1999, which gave rise to the JLL holding company.

Original story: Idealista 

Translation: Carmel Drake

Ibosa Offers €33.5M to Acquire Most Sought-After Plot in Madrid

20 November 2018 – El Confidencial

The cooperative managed by Grupo Ibosa, Residencial Shaula Sociedad Cooperativa, has fought off competition from 16 other contenders in the auction for the most sought-after plot of land in Madrid. On the table: €33,510,000, an amount that almost doubles the minimum price of €17 million that the Treasury had set for it.

The cooperative has fought off competition in a tight bid from Desarrollos Los Astros, constituted at the beginning of November, and backed by Grupo Nozar, which placed €32 million on the table, and Arcano, which bid €31.2 million. Nevertheless, those two high offers were unable to compete with Grupo Ibosa, which has a lot of experience in this type of auction.

Expectations were high at Calle Guzmán el Bueno 139, the headquarters of the Special Delegation of the Economy and Finance in Madrid, where the auction was held. At 10am, in a room full with more than 100 people, 17 envelopes were opened containing 17 bids for the most sought-after plot of the year in Madrid. The land was owned by the National Currency and Stamp Factory (Fábrica Nacional de Moneda y Timbre), which entrusted its sale to the Heritage Service. The cooperative members will have to make the first disbursement within the next few days, equivalent to 25% of the amount offered, in other words, almost €8.4 million, and then pay the remaining 75% over the coming months, after deducting the deposit paid in order to be able to bid, which amounts to €850,000.

Vía Célere also submitted an offer (€23.7 million), exactly two years after submitting the only offer for another plot of land owned by the Treasury, in the same place, on Avenida Santo Ángel de la Guarda. The company chaired by Juan Antonio Gómez-Pintado is a familiar face in this type of action. In fact, just a few days after that auction, it was awarded the Adif and Repsol plots in Méndez Álvaro. On that occasion, its bid was also the only one.

In terms of the other names called out in the room, they included traditional property developers such as Ebrosa (€20.53 million), which submitted the most conservative bid; Grupo Premier, which put €25.16 million on the table through the company Cajandral; and Grupo Lar, which bid €30.13 million through Desarrollos Residenciales Madrid Norte. Pryconsa, another of the real estate firms that typically participates in these types of procedures, offered €23.1 million through Cogein, and Renta Corporación, with €22.15 million.

The surprise bidders included Inmo Frieria, a company backed by Manuel Jove, the former President of Fadesa, with a bid amounting to €24.7 million. And the listed company Aedas Homes, which offered €25 million through the company SPV Reoco 1, in its first major auction in Madrid. The long list of interested parties was completed by Global Nostromo (€28.5 million), Golego ITG (€22.12 million), Taz Real Estate (owned by Alza Real Estate, €24 million), Misodi Rent (owned by the Huguet family, with €23.2 million), Torre Rioja Madrid (€25.1 million) and Denoti Investment, a company owned by Irvine Alan Stewart Laidlaw, a British businessman and one of the richest people in the United Kingdom, whose bid amounted to €31 million.

A cooperative wins again

Like happened exactly four years ago, in November 2014, with the auctions of the plots on Raimundo Fernández Villaverde (owned by the Ministry of Defence) and the former metro depots in Cuatro Caminos (owned by Metro de Madrid), it is a cooperative – which saves on the property developer margin – that has managed to put the most competitive offer on the table, to fight off seasoned property developers such as Premier, Pryconsa, Ebrosa and Aedas Homes in a bid that the experts are describing as the auction of the year in Madrid. Not because of its size or its features, but because of its location, just 500m from the Retiro Park, this was one of the most sought-after plots in the capital, and its new owner may build up to 100 homes on its 4,500 m2 – 9,000 m2 of buildable space (…).

The cooperative managed by Grupo Ibosa currently comprises 60 cooperative members and its plans involve the construction of 94 homes. The 4 bedroom homes with two parking spaces and a storeroom will cost between €806,000 and €1,175,000, whilst the 3-bedroom homes will cost between €670,000 and €688,000 (…). The 2-bedroom homes will cost between €490,000 and €498,000, and the 1-bedroom homes will cost between €309,000 and €354,000. The complex will also have a swimming pool, a padel court, a gastroteque, a mini-crossfit studio, a sports pitch, a gym, changing rooms, a spa, a sauna and a jacuzzi.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Colonial Divests 7 Office Buildings & 1 Turnkey Project in Madrid for €441M

6 October 2018 – Real Estate Press

Colonial has announced the sale of seven office buildings and a turnkey project in Madrid for a total price of €441 million. The sales have been made under very favourable conditions for the company for a premium of 12% above the most recent valuation.

The assets transacted have a gross leasable area of 106,574 m2 and are located, for the most part (91%) outside of the city’s central business district. They are non-strategic buildings for the company outside of the M-30, mature assets and a project in Castellana Sur / Mendez Álvaro.

Colonial has divested assets, which after a recent real estate transformation have reached high occupancy levels and the maximum point in the cycle for the creation of real estate value. For example, in the case of Alcalá 30-32, the rental contract was recently renegotiated with a +21% increase in the rental price and which is currently 100% occupied by the Public Administration with a long-term contract.

Office project

Colonial has reached an agreement with Grupo Catalana Occidente to sell it a turnkey project spanning more than 20,000 m2 on a plot that it acquired under the framework of the Alpha-III project in January. The project is located in the Méndez Álvaro office market and will allow the consolidation of the Castellana Sur area with the occupancy of the building by a large corporation.

Similarly, Colonial will begin construction of another major project “Méndez Álvaro Campus” over the next few months. That project has an above ground surface area of 90,000 m2 and will house the largest office complex inside the M-30.

Optimal conditions at the right time

This operation has been carried out taking advantage of the good momentum in the office investment market in Spain, which is continuing to generate strong interest amongst institutional and private investors.

Only 4 months have passed since the company identified these assets for sale along with the potential investors, demonstrating the Colonial Group’s capacity to execute this type of transaction under optimal conditions.

The buyers include institutional investors of recognised prestige such as Tristan Capital Partners, Real I.S. and Grupo Catalana Occidente. In the different operations, Colonial has received legal advice from Ramón y Cajal Abogados and Roca Junyent

Reinvestment of capital focused on Prime

The funds received from the divestments will be used primarily to finance the portfolio of high-quality office projects spanning a surface area of 320,000 m2, as well as the company’s acquisition program. The Group’s net indebtedness (LTV) following the divestment of these assets will clearly fall below 40%.

“The company frames these divestments within its strategy to focus on prime assets with maximum added value, where demand and value growth are most notable. With this operation, Colonial increases its flexibility and capacity to continue developing its growth strategy, focused on projects with maximum values and returns”, explained Pere Viñolas, CEO of Colonial.

Original story: Real Estate Press

Translation: Carmel Drake

UBS Euroinvest Fund Acquires Core Madrid Office Asset

6 March 2018 – Property Funds World

UBS Real Estate has acquired the Titán 8 office asset in Madrid on behalf of the UBS (D) Euroinvest Immobilien fund. This transaction represents Euroinvest’s debut investment since the fund’s recent strategic relaunch.

Titán 8 is a prominent office asset in the south of Madrid comprising 18 storeys spread across 10,633 sqm and including 228 underground car parking spaces. The imposing tower has been acquired in Grade A condition having been completed according to the highest quality, efficiency and design standards in 2008 and well-maintained since. It features a glass curtain wall façade that offers impressive views from upper levels. Main tenants are from the financial business, the energy and service provider industry.

The asset is strategically located in Madrid’s business district of Méndez Álvaro, in the south of the city centre, and benefits from strong transport links, positioned adjacent to the M30 ring-road, providing access to Madrid’s international airport in just 15 minutes and with the capital’s main train station, Atocha, nearby. With highly constrained supply in the area and resilient occupier demand, Méndez Álvaro office rents have demonstrated buoyant performance over recent years.

Euroinvest comprises an EUR820 million portfolio of predominantly core office assets located across key European cities. Following a strategic review of the Fund, Euroinvest has strengthened its core-profile through the disposal of non-strategic assets and delivered a strong performance of 4.4 percent for its investors (as of 31 December 2017), outperforming its benchmark (MSCI OFIX Europe) by 260 basis points. The Fund’s management team is actively seeking further attractive investment opportunities that are in line with its strategy across top performing European markets.

Alexander Isak, Fund Manager of Euroinvest, says: “As the fund’s maiden investment since relaunching, Titán 8 is a perfect illustration of the high quality and resilient assets that we are targeting, benefitting from an excellent location which is proven to generate robust occupier demand and offering further upside as the Spanish economy strengthens.”

“We are pleased to be in a position to prudently invest in new attractive opportunities that we are identifying in the market, following a disciplined programme of non-strategic disposals and the extensive management of the Fund’s assets that has delivered a viable core European real estate portfolio for our investors.”

Euroinvest was established in 1999 as the first open-ended public fund focusing primarily on institutional investors, with this category of investors currently holding more than 95 percent of the Fund’s units. Its investment strategy is focused on core office properties located in the strongest European cities, demonstrating resilient occupational demand.

Original story: Property Funds World

Edited by: Carmel Drake

Colonial Buys 110,000 m2 of Land in Méndez Álvaro (Madrid)

10 January 2018 – Eje Prime

Colonial is getting out its cheque book to inaugurate 2018. The Socimi led by Pere Viñolas has reached an agreement to acquire two plots of land with a buildable surface area of 110,000 m2 in the Méndez Álvaro area of Madrid. The group plans to build two office complexes on the plots, which are located next to Repsol’s headquarters and close to Atocha train station.

The land operation is one of the most important that Colonial has undertaken in the Spanish capital since the Cuatro Torres, according to El Confidencial. The agreement has been closed off-market, directly with small landowners.

This move will lead to the definitive launch of the urban planning project in Méndez Álvaro, which received the green light last year for the development of 129,700 m2 of land, with a buildable surface area of almost 250,000 m2, split between residential (185,313 m2) and tertiary use (61,771 m2) (…).

Specifically, Colonial has purchased one plot with a surface area of 90,000 m2, located next to Repsol’s current headquarters, and a second plot, also close to Atocha station, measuring 20,000 m2.

The acquisition of the two plots has cost €185 million. The total investment in the project, including the subsequent development of the two office complexes, will amount to €355 million (…).

The emergence of the Socimi in this operation suggests that in the end, there will be a greater weight of offices in the area, taking advantage of the dual-use (residential and tertiary) assigned to the plots that border Calle Méndez Álvaro.

Original story: Eje Prime

Translation: Carmel Drake

Foro Consultores: Land Prices Soar In Certain Pockets Of Madrid

13 February 2017 – El Confidencial

Land prices are soaring, house prices are rising, the buying frenzy is gaining momentum in some areas and in certain developments…Is history repeating itself? Are we witnessing the gestation of a new real estate bubble, albeit not on a national scale, but nevertheless in certain areas of the country. That is what seems to be happening in some neighbourhoods of Madrid. But, the answer, for the time being at least, seems unanimous: not yet.

Buildable land, in other words, land that is ready to be built upon, is running out and, across Spain, there is barely enough land left upon which to construct the 1.5 million homes estimated to be required to supply the market for the next 8.6 years. In Madrid, the land will run out in just over 6 years, according to the latest report from the appraisal company Tinsa. It identifies a worrying shortage of this type of land in areas of expansion to the north of Madrid, as well as in certain specific points of the metropolitan area, such as Pozuelo, Villanueva de la Cañada, Coslada and Rivas. In some of these areas, according to warnings from Tinsa, there will be no buildable land left within 12-24 months. This situation has, unsurprisingly, led to sharp increases in land prices in certain areas. And these rises are concerning the sector. Where are these first warning signs starting to sound?

Valdebebas

The large real estate development in the north of Madrid, which was launched at the height of the crisis and which has fallen victim to numerous legal setbacks, has become, in the eyes of the residential sector, a clear example of the extent to which land can become a very sought-after, as well as a very dangerous, asset.

“Without doubt, it is one of the areas where land prices have grown significantly. In 2014, they ranged between €750/m2 and €900/m2, whereas nowadays operations are being closed for more than €1,200/m2 and €1,300/m2, and the perception in the market is that land can no longer be sold for less than €1,400/m2”, explained Vicente Quintanilla, Director of the department for Investment and Land at Foro Consultores. According to this expert, “this trend generates significant tension in terms of the prices of new builds, which are being sold for €3,000/m2 in certain developments”. (…).

Pozuelo, Aravaca…

Another market where prices have also risen significantly is the municipality of Pozuelo de Alarcón, where Sareb sold land for around €1,000/m2. (…).

Indeed, the supply of land in Pozuelo has completely run out and families in need of homes are heading to other markets, such as in Boadilla del Monte, a cheaper alternative. According to data from Foro Consultores, the gap in prices is very significant. “To give you an idea, a family home or chalet in Boadilla costs around €450,000 on average, compared with between €700,000 and €1 million in Pozuelo.

Scarce and sought-after plots of land have also seen sharp price increases in recent years. “In El Camino de Barrial, in Aravaca, land prices have risen from €1,200/m2 in 2014 to around €2,000/m2 now. (….).

Boadilla del Monte, at boiling point

Boadilla del Monte is another one of the markets that has experienced a huge boom over the last two years. And there, it has not been due to the scarcity of land, but rather because of the strong demand from families who, as described above, cannot find homes in Pozuelo de Alarcón.

“For family home plots, land prices have increased from €400-500/m2 in 2014 to €800-900/m2 in2016, say Foro Consultores. (…).

Euphoria in Méndez Álvaro and rises in El Cañaveral

In the heart of the capital, where land is noteworthy due to its absence, land prices have increased considerably. In 2014, buyers paid €1,000/m2 and in a recent operation, whereby Adif and Renfe sold a plot to Vía Célere, the price paid amounted to around €1,900/m2. (…).

This increase in land prices is not exclusive to the area to the north of Madrid (…). The price of more affordable land and cheaper homes has also risen significantly in recent months.

Such is the case of El Cañaveral, in the east of Madrid, where “last summer, land prices amounted to around €360-370/m2 and now plots are going for €450-500/m2” (…).

Finally, all of the experts lament the fact that during the crisis, no agreement was reached to manage land, which has resulted in this significant shortage and in the inevitable increase in prices. They advocate greater agility in terms of urban planning, especially where the shortage is leading to a bottleneck in the market.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake