Colonial, Merlin and Lar Rotating Assets Worth €2.5 Billion

20 August 2019

Spain’s largest socimis have all been taking advantage of the benign economic climate to implement a strategy of asset rotation, selling off non-strategic assets to raise funds for further investments. Colonial, Merlin and Lar España have completed more than 2.5 billion euros in divestments over the past two years.

Of the four, Colonial has been most active in this regard. The socimi has sold assets worth approximately €1.5 billion in the last two years, more than half stemming from its acquisition of Axiare. In October 2018, Colonial sold seven office buildings to Tristan Capital Partners and Real IS, as well as a development under construction in Madrid to Grupo Catalana Occidente, for 441 million euros. Of the seven properties sold, five originated with Axiare.

Colonial also recently sold a portfolio of 18 logistics assets, covering an area of 473,000 square meters, to Prologis for an estimated €425 million. What’s more, the socimi sold an office building in Paris for €450 million in mid-2017. The firm is investing the proceeds of some of its sales, allocating €468 million in twelve projects under development in Madrid, Barcelona and Paris, the three markets where the company operates.

Merlin, for its part, sold its 17% stake in Testa to Blackstone last September for €321 million. The firm also sold its portfolio of hotels to Foncière des Regions for €535 million. Lar has also sold €425 million of assets in the last 18 months. Of that, €120 million stemmed from the sale of a logistics portfolio to Blackstone, while another €190 million resulted from the sale of four office buildings in Madrid and Barcelona and some small retail assets.

Original Story: Expansión – Rebeca Arroyo

Adaptation/Translation: Richard D. K. Turner

US Fund Cain to Acquire Portfolio of Second Tier Offices from Merlin Properties

15 August 2019

Cain, a real estate investment fund, is in talks with Merlin Properties to acquire a portfolio of second-tier office assets for more than 200 million euros. The US firm is currently concluding the process of arranging financing to acquire the portfolio. Cain is investing in the assets in conjunction with the Freo Group.

The portfolio, known as Project Juno, is made up of Merlin’s second-tier office holdings, which do not currently fit into the Spanish socimi’s investment strategy. Such offices, however, are also highly in demand at the moment.

The portfolio’s assets include the Miniparc complex, in Soto de la Moraleja (Madrid), the headquarters of Informática El Corte Inglés, in Mirasierra to the north of Madrid and the Európolis complex, in Las Rozas.

Original Story: El Confidencial – Ruth Ugalde

Adaptation/Translation: Richard D. K. Turner

Merlin Posts Solid Results in First Semester of 2019

3 August 2019

Merlin Properties announced an operating profit of €157.2 million in the first semester of 2019, an increase of 11.6%, along with net profits of 262 million euros. The socimi had revenues of €265.2 million, an increase of 7.3%, while Ebitda reached €210.4 million, an increase of 7.4%.

Receipts from Merlin’s office business increased by 8.3% due to a rise in employment and renovations carried out by the firm on its properties. Merlin also leased a total of 8,487 m2 in the Torre Chamartín, bringing occupancy to 83%.

The socimi’s shopping centre revenues rose by 3.9%, as the total occupancy rate grew to 92.6%. Income from logistics assets rose by 6.2%, as occupancy held steady at 95.7%.

Original Story: Cinco Dias – Manu Granda

Adaptation/Translation: Richard D. K. Turner

Merlin Teams Up with Telefónica to Digitalise the Management of its c.150 Office Buildings

21 April 2019 – Expansión

Merlin has joined forces with Telefónica to digitalise and centralise the management and maintenance of its c. 150 offices, which are primarily located in Madrid and Barcelona, and which span a combined surface area of 1.3 million m2.

The aim of the initiative is to optimise the efficiency of the buildings’ operations and, above all to save costs, especially on the energy side. It forms part of the Socimi’s wider commitment to the digitalisation of its property portfolio.

A new digital headquarters will be set up to centrally manage the operations and maintenance of the Socimi’s offices, from where it will be possible to turn off the lights, change the temperature and take into account any breakdowns in any of the properties.

Merlin’s office portfolio includes several iconic assets, such as Torre Glòries in Barcelona, one of the four skyscrapers in Madrid, several assets on Paseo de la Castellana and properties on Calle Balmes and La Diagonal in the Catalan capital.

Original story: Expansión 

Translation/Summary: Carmel Drake

Spain’s Largest Landlords are Merlin, Colonial, GMP & Mapfre

19 April 2019 – Expansión

Merlin, Colonial, GMP and Mapfre: three Socimis and one insurance company together own 16% of the total office space in Madrid. Blackstone, Realia, Mutua Madrileña, Tristan, Pontegadea and Starwood complete the Top 10 ranking.

According to a report from Deloitte, the ten largest landlords own more than 3.1 million m2 of leasable space in Madrid, out of a total spanning more than 13 million m2 (24%). In Barcelona, there is 6.1 million m2 of leasable space.

Leading the ranking is Merlin, which owns 7% of the total stock in Madrid and more than 3% in Barcelona. Its 140-strong office portfolio is worth €5.5 billion and accounts for 45% of its total assets. The Socimi’s tenants include BBVA, Endesa, Inditex and PwC, and its star assets include Torre PwC in Madrid and Torre Glòries in Barcelona.

Behind Merlin is Colonial, which owns 3.8% of the office stock in Madrid and 4.6% in Barcelona (where it is the market leader). Its key assets include the building located on Paseo de la Castellana, 52, two properties on Calle Miguel Ángel (numbers 11 and 23), all in Madrid, and Torre Marenostrum in Barcelona.

Completing the podium is GMP, which owns 2.8% of the gross leasable area in Madrid, including Torre BBVA and Torre Ederra, both in Azca. Meanwhile, the insurance companies Mapfre and Mutua Madrileña own 2.7% and 1.4% of the total stock in the Spanish capital, respectively.

In addition, the funds have strengthened their positions in recent months. The US fund Starwood purchased a portfolio of offices in Madrid and Barcelona from Autonomy for €125 million. It also acquired the San Fernando Business Park, in conjunction with Drago, from Oaktree for €120 million.

The British fund Tristan has also been active, with the acquisition of an office complex on Avenida de Manoteras in 2017 and the purchase of six offices spanning 78,000 m2 from Colonial in 2018 (…).

Original story: Expansión (by R. Arroyo)

Translation/Summary: Carmel Drake

Aena Launches the Largest Real Estate Plan in Spain

5 April 2019 – Expansión

Aena is planning to put up for tender between 160,000 m2 and 200,000 m2 of land at Barajas airport (Madrid) and another 300,000 m2 at El Prat (Barcelona).

The airport manager plans to invest €4.3 billion in the land adjacent to the Adolfo Suárez-Barajas (Madrid) and El Prat (Barcelona) airports and intends to put the first plots up for auction this year, most likely in December.

The firm led by Maurici Lucena has detected interest from funds and Socimis in its plots, which may be used for the development of logistics assets, as well as for hotel, office and commercial use. The plots are very attractive given their unique locations and connections and the three favourite investors at this stage are Blackstone, Segro and Merlin.

A priori, Aena’s idea is to create companies together with the investing partners who will finance the developments. Prices for the land at Barajas could range between €500/m2 and €750/m2 and for finished products could reach up to €1,800/m2.

In El Prat, the prices are expected to be higher given the space restrictions there, reaching around €2,000/m2 for finished products and between €750/m2 and €1,000/m2 for undeveloped plots of land.

Original story: Expansión (by Rebeca Arroyo)

Translation/Summary: Carmel Drake

Merlin Acquires 100% of Loom & Steps Up its Commitment to Flexible Office Space

26 March 2019 – Eje Prime

Merlin Properties has increased its ownership of the flexible workspace company Loom from 31% to 100%, whereby taking control of the whole entity.

Loom currently operates three flexible workspaces in the centre of Madrid, spanning 3,500 m2 in total. Merlin expects that figure to increase to nine spaces by the end of 2019, spanning 13,000 m2 with new openings forecast both in the Spanish capital and Barcelona.

According to David Brush, Investment Director at Merlin, “flexible workspaces represent a great opportunity for Merlin given that the market is currently growing at a rate of 20% p.a. and may account for 20% of the total office market by 2030”.

Original story: Eje Prime

Translation/Summary: Carmel Drake

Merlin Completes its Purchase of the Zona Franca Logistics Park for €10.9M

8 March 2019 – Eje Prime

Merlin Properties is now the sole owner of the Zona Franca Logistics Park. The listed Socimi purchased the remaining 10% of the complex that was still owned by the Consorci de la Zona Franca (CZF) for €10.9 million in December.

In this way, Merlin’s subsidiary, Merlin Parques Logísticos, is now the sole shareholder of Parc Logístic de la Zona Franca SA, the owner of the complex, which is located on the Zona Franca industrial estate in Barcelona.

The complex is one of the most active industrial areas in southern Europe, spans a total surface area of 35.5 hectares and comprises two main areas: one for business and one for logistics.

The logistics area covers 285,000 m2 in total, whilst the business area spans 190,000 m2.

Original story: Eje Prime (by Roger Arnau)

Translation/Summary: Carmel Drake

Funds, Socimis, El Corte Inglés & Seur Compete in the Urban Logistics Segment

9 March 2019 – Expansión

Investors and logistics operators alike are setting their sights on urban hubs to benefit from the boom in e-commerce. According to data from CBRE, investment in the logistics sector is thriving – it amounted to €2 billion in 2017, €1.5 billion in 2018 and is forecast to reach €1.2 billion in 2019. Active players in the sector include the Singapore sovereign fund through its Socimi P3, Blackstone, Prologis, Logicor, CBRE GI and Montepino, and Merlin, amongst others.

Urban hubs are gaining significant weight in the sector thanks to their ability to reduce transport costs, avoid the new traffic restrictions and resolve the problem of product returns.

According to the CNMC, Correos and Correos Express currently deliver 44% of all packages in Spain, followed by MRW and Seur (14% each) and DHL (4.5%).

In terms of retailers operating in this space, Amazon set the ball rolling by opening a logistics centre in the heart of the Eixample district of Barcelona and in the Méndez Álvaro area of Madrid. Other large retailers are following suit by opening distribution centres inside major cities, such as Decathlon, MediaMarkt, Ikea, Aki, Carrefour and Worten.

The investment firm Azora has also announced its intention to invest €250 million in logistics hubs in urban centres, which it will lease to delivery specialists such as Seur, DHL and MRW. Seur already has eleven urban logistics centres and plans to open another nine this year. Meanwhile, DHL already has ten such hubs and plans to open two more this year.

In the same vein, the department store giant El Corte Inglés has also launched an ambitious omnichannel logistics strategy, which will convert its 94 shopping centres into storage points for the management of online purchases.

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

Translation/Summary: Carmel Drake

Merlin to Add 13,000 m2 of Coworking Space in Madrid & Barcelona by 2020

28 February 2019 – Idealista

Merlin Properties is expanding in the coworking sector, where it operates under the Loom brand. The Socimi led by Ismael Clemente currently has three shared offices in Madrid, spanning 3,500 m2 in total, and it is planning to open its next space, spanning 1,200 m2 on Calle Eucalipto, 25, also in the Spanish capital, in June.

The listed company also intends to open 1,600 m2 of coworking space in Torre Glóries, the office block that it owns in Barcelona, where its tenants will work alongside several high-profile operators, such as Facebook, Dynatrace and Oracle.

In September, Merlin is going to open 2,000 m2 of coworking space in the Salamanca neighbourhood of Madrid and before the end of the year, it will add 1,500 m2 of shared office space in WTC Alameda in Barcelona.

In 2020, the Socimi is also planning to open 1,100 m2 of shared work space in Torre Chamartín in Madrid and another 2,000 m2 in the 22@ district of Barcelona.

Merlin owns 31% of Loom House, which is managed by the siblings, Paula and José Almansa.

Original story: Idealista (by Custodio Pareja)

Summary translation by: Carmel Drake