Amazon Selling off Logistics Centres throughout Europe

17 September 2019 Amazon has begun a process whereby it is selling off its logistics assets in Europe in a series of sale & leaseback operations. Last month, the e-commerce giant sold three platforms in Barcelona, ​​London and Paris for about 400 million euros to the Korea Investment Corporation (KIC), Korea’s sovereign fund.

The firm sold the logistics centres at Avonmouth (Bristol, servicing London), Brétigny-sur-Orge (Paris) and El Prat (Barcelona), one of the most important in southern Europe. The operation would have closed last August.

At the same time, Goodman Real Estate is in the process of selling the logistics platform it is in the process of building for Amazon nearby Seville. Goodman, which is negotiating with M&G, expects to raise approximately to €200 million with the sale.

Original Story: El Español

Adaptation/Translation: Richard D. K. Turner

M&G Negotiating with Goodman Real Estate to Acquire Future Amazon Logistics Centre in Seville

17 September 2019

The British fund manager M&G is negotiating to acquire the future Dos Hermanos logistics centre in Seville. The nearly 200,000-m2 centre is under development by Goodman Real Estate and already for Amazon, with which it has signed a 20-year lease.

Goodman commissioned the Eastdil investment bank to organise and conduct the formal sales process, one which seeks a sales price of €200 million.

Original Story: El Confidencial – Ruth Ugalde

Adaptation/Translation: Richard D. K. Turner

M&G Teams Up With Quadratia to Invest in Residential Assets on the Alicante Coast

30 July 2018 – Alicante Plaza

The strategy being pursued by the investment funds to create joint ventures with local property developers through which to star in the resurgence of the real estate sector has reached a new high in the province of Alicante with the alliance between the British fund M&G Investments, a subsidiary of the insurance company Prudential, and the Alicante-based consultancy Quadratia. After starring in one of the largest land purchase operations in the province, with the acquisition from Sareb of the debt associated with the PP-27 of La Vila at the end of last year, M&G and Quadratia have decided to take their partnership to the next level. To this end, they have formed a joint venture company to invest in unique projects on the Costa Blanca and other points along the Spanish Coast: Quadratia Investment Partners (QIP)

“Following the successful launch of the Allonbay Village project in the El Torres de la Vial cove”, explain sources at the company, the British fund has teamed up with the Alicante-based property developer “through its fund DOF IV to back the development of unique residential projects along the Mediterranean coast”. The objective of Quadratia Investment Partners is “to acquire urban land and projects under construction, primarily in the hands of financial institutions in complex situations”, to manage that land and develop unique residential properties close to the sea. The target audience of these projects will be domestic and overseas buyers looking for second homes.

Following its constitution, QIP has already acquired another plot in the La Tellerola sector of La Vila on the beachfront, taking advantage of its strong presence in this municipality, and it has entered the market in Calp, with the purchase of two plots, one of which is going to be used for the development of a building with 100 homes, standing more than 25 storeys high, with views over the Peñón de Ifach and Playa del Arenal. But the new investment group’s interest is not limited to the Costa Blanca. According to the same sources, the firm is looking for land with the same characteristics on the coast of Valencia, and is also already closing several operations on the Costa del Sol, a market that is similar to that of Alicante but which “warmed up” first, according to their explanations.

According to the sources, the consultancy firm Quadratia has specialised in working as a local expert for various investment funds (on behalf of which it undertakes the integral management of projects), including Kronos Homes and ASG Homes, which have also starred in several operations in the sector in the province. In this case, however, the partnership with M&G Investments goes further: the Alicante firm has acquired a “significant” stake in the share capital of the new group, and the CEO of Quadratia, Enrique Gallego, has been appointed to the new group’s Board of Directors. Moreover, the former director of Mediterranean, Pablo Lucas Guerrero, was recently appointed as an independent director, to support this same investment strategy on the Costa del Sol, where the group has now completed its first investment in the Torrox-Nerja area: a 131-home development with panoramic views over the sea (…).

With more than GBP 240 billion under management, M&G is the investment fund management company of the Prudential plc insurance group, listed on the London Stock Exchange and member of the FTSE 100, with more than 160 years in the insurance, investment and loan businesses. In terms of Quadratia, it is led by the second generation of Grupo Alicante Urbana. Founded in 2014, it makes contact with investment funds interested in the residential sector in the province of Alicante and provides them with a comprehensive range of legal services (…).

Original story: Alicante Plaza (by David Martínez)

Translation: Carmel Drake

CBRE: Investment in High Street Premises Will Exceed €1.1bn in 2018

5 July 2018 – Eje Prime

Commercial premises, especially those located on the most prime streets of Spain, are proving highly sought-after. According to CBRE, the high street investment market is going to achieve record figures in 2018, up to a total of €1.1 billion. The culprits? The German fund Deka and Inditex, in addition to the strength of secondary cities in the country.

During the course of the last two years, investment in high street assets remained stable at around €800 million per year, after peaking at €1.01 billion in 2015. In 2018, according to calculations from the real estate consultancy CBRE, the investment volume will exceed the €1 billion threshold again, primarily due to the impact of the sale to Deka of a batch of 16 Zara stores for €400 million and the boost from activity beyond Madrid and Barcelona.

Deka has whereby become a catalyst for the retail investment market in Spain, together with Generali and Union Investment, which also starred in major investment operations during the first few months of 2018.

Deka’s €400 million operation was the largest in the last year and a half, followed by the purchase by Hines of number 17 Paseo de Gracia for €113 million and the acquisition by Generali of number 9 Preciados for €107 million.

Institutional investors are the main drivers of the investment market in this segment, according to the Retail keys in Spain report in CBRE. “In recent years, several overseas institutional investors have entered the Spanish market and many have been active in 2017 and 2018”, according to the document, which points out that Socimis such as Tander, Ores and Silicius have also been interested in the sector.

Madrid and Barcelona are continuing to be the main magnets for high street investment in Spain and, together, they account for 79% of the total expenditure. “Nevertheless, other cities in Spain are booming and demand is rising for investment products in cities such as Bilbao, Valencia, Sevilla and Málaga”, says the document.

The displacement of demand to other cities is a consequence of product shortages and low returns. On the one hand, according to CBRE, operators have accentuated their preferences for prime streets, which has strengthened the shortage of products. “Premises with recently signed contracts are sparking a lot of interest, given that if they reflect market rents, they become a very stable long-term investment”, says the document.

On the other hand, the pressure on returns remains strong and in 2017, they were compressed further still, reaching levels of 3.25% in Madrid and 3.50% in Barcelona for the most prime products. The “historically low” values are repeated in other European cities, with 3.25% in Berlin, 3% in Milan, 2.75% in Paris and 2.25% in Munich.

As a result of those two elements, investor interest is extending to other cities in Spain, although the operations closed tend to be of greater importance, “given that the premises and the rents are lower and the returns are higher”.

With investment of €170 million outside of Barcelona and Madrid in 2017, several purchases stand out such as M&G’s acquisition of the H&M store on Reyes Católicos in Granada as well as of the El Corte Inglés building in Plaza la Magdalena in Sevilla.

Valencia and Bilbao are the markets that, typically, generate the most interest from investors due to the size of the two cities, the importance of their high streets and the role of tourism. The tradition of investment in the segment by local family offices means that returns there are compressed to 4%.

Retail and shopping centres

High street premises accounted for 25% of the total investment in retail in 2017, well behind shopping centres, which accounted for 51% of the total, but ahead of retail parks (15%) and portfolios of supermarkets and hypermarkets (9%) (…).

In Spain in 2017, investment in the Spanish retail market amounted to €3.3 billion. CBRE forecasts that the figure will amount to €2.9 billion in 2018, boosted by high street investment (…).

Original story: Eje Prime (by P. Riaño)

Translation: Carmel Drake

CBRE: Investor Interest in High Street Stores Skyrockets

5 July 2018 – Cinco Días

Stores on the most commercial streets of Spain have become an object of desire for investors in the real estate market. Large funds and insurance companies alike are investing in these types of assets and experts predict that a new record is going to be set in the segment this year.

Investors are expected to spend around €1.1 billion on these types of commercial premises in 2018, according to forecasts from the consultancy CBRE. That figure would exceed the amount invested in high street stores in 2017 by €300 million, equivalent to a growth rate of 36.9%. Of interest are shops on commercial thoroughfares such as c/Preciados and c/Serrano in Madrid and Paseo de Gracia and Portal de l’Àngel in Barcelona. In fact, those two cities accounted for 79% of total investment last year. “Nevertheless, other cities in Spain are on the rise and there is growing demand for investment products in cities such as Bilbao, Valencia, Sevilla and Málaga”, according to the report “The Keys to Retail in Spain”, published by CBRE yesterday.

Investors regard these types of well-located assets as a good option for placing their money, a solid alternative in the context of low-interest rates and because these high street stores perform better (than other commercial assets) in the face of competition from online retailers. Currently, according to CBRE; the returns on these properties amount to 3.5% in Barcelona and to 3.25% in Madrid; in other cities (with more risk), the returns are greater.

The stars of these acquisitions are mainly the large funds. Hines, M&G, AEW, Thor, Union Investment, CBRE GI and Deka. “In 2017, in addition, an insurance company entered the high street sector for the first time: Generali acquired the Pull & Bear store on Calle Preciados in Madrid”, according to the report. Other active players include the Socimis, such as Tander, Ores, and Silicius, which have started to express interest.

In terms of large operations so far this year, in January, the German fund Deka acquired 16 Inditex stores for €400 million. Another significant operation was the acquisition of Mercado de San Miguel by the Dutch fund Redevco, for €70 million.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

M&G Real Estate Purchases 3 Commercial Premises in Madrid & Granada

29 May 2018 – Eje Prime

M&G Real Estate is continuing its shopping spree in Spain. The real estate division of the British fund M&G Investment has acquired two commercial premises in Madrid and a third in Granada. Moreover, the firm has also added two industrial assets in the Spanish capital to its portfolio.

The commercial premises in Madrid are located at number 68 Gran Vía, whilst the asset acquired in Granada is located on Calle Reyes Católicos, where the Swedish fashion retailer H&M recent opened a store. In the Spanish capital, the tenants of the retail spaces are the restaurant chain Tony Roma’s and the financial entity Banco Sabadell, which will open its flagship branch in the premises soon.

Meanwhile, in the logistics sector, the real estate investment firm has purchased a logistics platform in Corredor del Henares, which is leased to Teka, and an industrial complex in Getafe. In total, those two assets span a surface area of more than 55,000 m2.

Original story: Eje Prime 

Translation: Carmel Drake

M&G Invests €80M to Strengthen its RE Portfolio

29 May 2018 – Expansión

The real estate division of the London-based firm M&G Investment has decided to bet significantly on the Iberian market, where its exposure now exceeds €500 million. “We are partners of institutional investors looking for core properties in the best locations across Europe. We opened our office in Spain in 2016, but we completed our first operations there a year earlier”, explains Federico Bros, Director of Asset Management for Spain and Portugal.

Its first operation involved the purchase of the former headquarters of Telefónica located on Calle Ríos Rosas (Madrid) and leased to the advertising giant WPP. “It is an example of what we look for, well-located assets with long-term contracts, 17 years in this case. Between the renovation and purchase we will invest €175 million in that property”, says Bros.

After that acquisition came others, such as an office building in Barcelona’s 22@ district and, recently, five operations with a very diverse profile. On the one hand, M&G purchased three commercial assets: two in Madrid and one in Granada. “The premise in Granada, measuring 2,500 m2, is located on Reyes Católicos, the best shopping street in the city”, explains Bros. In the case of Madrid, M&G acquired two retail premises on Gran Vía 68. “We closed this operation in May but we have been negotiating it for months, given that the building was being renovated. A few months ago, a large Tony Roma’s restaurant opened there and Sabadell is going to open its flagship branch in the other premise in a matter of days”, he said.

Similarly, the firm acquired two industrial assets in Madrid, specifically a logistics platform, leased to Teka, in the Corredor del Henares, and another complex in Getafe. Those two sites span more than 55,000 m2. In total, the firm has invested €80 million on its latest operations, channelled through two funds: MEP and EuroSPIF.

More opportunities

Following these investments, the manager is still looking for opportunities in the Spanish market.

“We are involved in several processes, both official and off-market, in Madrid, Barcelona and prime locations in other cities. Spain is a priority country for us”, says Bros.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Banco Santander Sells Office Building in Bilbao to M&G for €50M

23 April 2018 – Mis Oficinas

Banco Santander is continuing with its divestment strategy and, to that end, has reached an agreement with the British fund M&G to sell one of its buildings located in Bilbao, for which it expects to receive €50 million.

Santander has undertaken several divestments in recent years. To tackle the crisis, it sold ten buildings for around €418 million and, in 2008, it carved out other important properties in Boadilla del Monte, in the Community of Madrid, for €1.9 billion.

It is currently holding negotiations regarding the sale of a building that is located on Bilbao’s central Gran Vía for around €50 million. The property spans 4,967 m2 and houses some of Santander’s subsidiaries.

The British fund M&G already owns the Nao building in Barcelona, which it purchased from Axa for €30 million. That property spans 9,000 m2 and is home to the headquarters of Servei d´ Ocupacio de Cataluya. Now, the fund has set its sights on Bilbao where real estate operations are on a roll; BBVA has also got caught up in the fever and is holding negotiations for the sale of its office tower, also located in Gran Vía.

Original story: Mis Oficinas

Translation: Carmel Drake

M&G Real Estate Buys 16 Santander Branches For €56.2M

25 May 2017 – El Economista

The fund manager M&G Real Estate has signed another deal in Spain, this time to become Banco Santander’s new landlord. Specifically, the firm has just signed an agreement with the Socimi Uro Property to acquire 16 of the financial institution’s branches for which it has paid €56.2 million.

The operation, which was closed at a premium with respect to the most recent valuation of the transferred portfolio, also includes the granting of a call option over another branch, which may be executed in the short term.

According to the Socimi, which owns approximately one-third of Banco Santander’s branches, the portfolio that M&G has purchased generates annual rental income of €3.04 million and comprises seven branches from the so-called Blue portfolio and nine from the Green portfolio.

The classification of the branches into these portfolios reflects the maturity dates of the corresponding rental contracts. Thus, in the first case (Blue portfolio), the lease contracts are due to terminate in 2045, 2046 and 2047, and may be extended for another seven years. In the case of the assets included in the Green portfolio, the lease contracts are due to mature between 2036 and 2038.

These terms of 30 and 20 years, respectively, match the British manager’s investment strategy, given that it seeks safe, long-term operations. In this way, the firm’s first operation in Spain was closed in 2015, when it acquired Telefónica’s former headquarters in Madrid, located in the heart of the city on Calle Ríos Rosas. It paid €175 million for that property, which is now the headquarters of WPP.

Following the sale, Uro will continue to own a portfolio of bank branches whose approximate value amounts to €1,893 million. When the Socimi debuted on the stock market, in March 2015, it managed 1,136 Santander branches, nevertheless, in April 2015, it sold a portfolio of 381 branches to Axa Real Estate for €308 million, leaving 755 branches, which cover a surface area of more than 340,000 m2.

Original story: El Economista (by Alba Brualla and Javier Mesones)

Translation: Carmel Drake