Tag: Nueva Condomina shopping centre

CBRE: RE Inv’t Rose By 38% To €6,100M In H1 2017

4 July 2017 – El Confidencial

Investor appetite for the Spanish real estate sector is continuing to rise and our country is getting ready to close yet another historical year in terms of investment volumes. For the time being, the first half of the year has seen record investment figures, with an investment volume of €6,100 million during the six months to June, up by 38% compared to the same period last year, according to data from CBRE.

There are five mega-operations behind this result, which have determined the strong start to the year: the purchase of the Madrid Xanadú shopping centre by Intu Properties, which paid €530 million for the property; the acquisition of the Buffalo portfolio, worth €300 million, by Blackstone; the sale of Edificio España to Riu for €272 million; the sale by GreenOak of the Acero logistics portfolio to GIC for €243.3 million; and the purchase of the Nueva Condomina shopping centre by Klépierre for €233 million.

And all indications are that between now and Christmas, there will be another similar run of operations, an expectation that allows experts to predict that investment will exceed the €10,000 million threshold for the third year in a row.

Some of the operations called to collaborate in the record-breaking figures are on course, such as Hispania’s sale of its office portfolio, for which the Socimi has received half a dozen offers for around €500 million; the sale of Parque Corredor by Sareb; and several portfolios that the banks are bringing onto the market; whilst others are well underway, such as the purchase of nine retail parks and properties that the South African fund Vukile Property has just agreed – it will acquire a portfolio of retail properties from the joint venture between Redevco and Ares for €193 million.

More appetite, lower returns

The main driver of investment during the first half of the year was the retail segment, which accounted for one-third of total investment (€1,900 million), boosted by the recovery in consumption. The other side of the coin corresponded to the residential segment, which saw a decrease of 20% with respect to the first half of last year, whereas the hotel sector continued to benefit from the boom in tourism and accounted for 29% of the total (€1,750 million).

Nevertheless, all of this buyer appetite means that returns are now at minimum levels…and they are still falling. The logistics and hotel sectors are the only markets capable of offering attractive yields, with average returns of 5.85% and 5.75%, respectively, although those numbers fall well below the figures achieved just two years ago (7% and 8%).

Yields on shopping centres have decreased to 4.25%; office returns have fallen to 4%, whilst the profitability of high-street premises barely reaches 3.5%. Despite this narrowing, international funds, which have been backing our country for a while and other new funds, which are just arriving, have Spain at the centre of their targets and are starring in these record figures.

In this way, whilst last year, the Socimis were the undisputable investment leaders, accounting for 43% of the total, this year, they represent just 14%; meanwhile, investment funds account for 34% of the total, with the US, British and French funds leading the ranking of overseas investors.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

British Groups Invest Heavily In Spain’s RE Sector

9 May 2017 – Expansión

The Grosvenor group is embarking on its first residential project in Spain, developing luxury homes in Madrid. It is following in the footsteps of other compatriot companies such as Intu, Taylor Wimpey and Benson Elliot.

One of the latest real estate companies to show its commitment to Spain has a history that spans 340 years. The firm in question is Grosvenor, the centuries-old British firm, which closed its first investment in the Spanish residential sector about two months ago.

The project chosen by Grosvenor for its arrival in Spain is a luxury residential development on the Golden Mile of Madrid. To this end, Grosvenor, through its subsidiary Grosvenor Europe, completed the purchase of a plot of land measuring around 820 m2, located at number 53 on Calle Jorge Juan, for the development of six exclusive apartments and one penthouse with views over the Retiro Park. (…).

Grosvenor’s operation on Jorge Juan forms part of a joint venture signed by the Asian firm Amcorp in July 2016, whereby it undertook to invest €70 million during the first phase. “We hope to build a significant real estate portfolio in Spain during 2017”, said sources at the British group, which was founded in 1677 by Sir Thomas Grosvenor, and which is nowadays one of the largest landowners in the United Kingdom.

In light of this commitment to Spain, Grosvenor, which has four divisions through which it operates in Europe, Asia, America and the United Kingdom, has strengthened its office in Madrid, led by Fátima Sáez del Cano, by hiring Miguel Silmi, who formerly served in interim roles at firms such as Altamira, owned by Banco Santander. (…).

Investment

Grosvenor’s commitment to Spain is not a unique case amongst the large British groups. “Investors from the United Kingdom have always liked the Spanish real estate market and they have invested throughout the economic cycle. For example, Heron International, which is known today for the shopping centres that it built in Madrid, Barcelona and Valencia, used to hold a significant portfolio of office buildings in Madrid, in the 1990s”, said Javier García-Mateo, Partner in Financial Advisory at Deloitte. (…).

Meanwhile, Benson Elliot has been present since 2011. That fund has just closed the purchase of the Hotel Silken Diagonal, together with the joint venture between Walton Street and Highgate. Previously, BE had purchased two other assets in Barcelona, which it has now sold. “Another British firm, London Regional, has purchased hotels and offices in Spain and has also taken advantage of the cycle to sell them at a profit”, said Rafael Bou, Partner in Real Estate at PwC.

“Having invested more than €2,147 million since 2011, British funds are the second most significant international investor in the Spanish real estate market, after the United States (…)”, according to Savills. During the first quarter of 2017, British firms have already made real estate purchases amounting to €550 million, according to Deloitte.

One example of this commitment is the return of British Land to Spain, which last year purchased the Nueva Condomina shopping centre in Murcia, and the more than €120 million that has been invested by the UK & European Investment group in operations in Madrid, Barcelona and Marbella. (…).

In addition to real estate companies and investment funds, some of the large British insurance companies are also placing their focus on the Spanish real estate sector, such as the case of Prudential and Aviva, which just closed the purchase of the Tormes shopping centre in Salamanca.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake