Merlin To Invest €100M Renovating Testa’s Buildings

13 October 2015 – Cinco Días

The Socimi Merlin Properties is embarking on a plan to renovate and improve the certifications of the buildings it has inherited from Testa, the former subsidiary of Sacyr. The plans also include the refurbishment of the construction company’s own headquarters. The investment will amount to €100 million over the next five years.

Over the medium term, the Socimi plans to renovate some of the buildings it inherited from Testa, the company in which it now holds a 77% stake. According to sources familiar with the plan, the company’s idea is to spruce up some of the properties that have become run down due to a lack of investment, improve the aesthetics of some of them and introduce environmental and energy certifications, with an investment that will amount to around €100 million.

In June, the Socimi announced its purchase of Testa for €1,793 million. Testa is the former real estate subsidiary of Sacyr and is the owner of properties for rent.

Merlin, led by Ismael Clemente, has already get involved with the day to day running of Testa. In recent weeks, Management has been assessing the status of its existing (extensive) portfolio containing 45 office buildings, and has launched a plan to renovate the properties, with the medium-term objective of generating higher rents as a result of the improvements.

On the one hand, it will spend around €75 million on the refurbishments over a five year period. The most iconic building is the one currently leased by Sacyr, at number 83 on Paseo de la Castellana, next to the Torre BBVA. The Socimi plans to give the property a new lease of life with a new façade that will modernise the aesthetics of the building. The construction company’s lease expires in 2019, and therefore if they want to undertake the renovation work before that date, they will have to notify the tenant.

In addition, Merlin plans to refurbish the interior of various buildings in Madrid, such as the ‘Complejo Princesa’ in the well-known Plaza de los Cubos, as well as other buildings such as the Costa Brava, in the Mirasierra neighbourhood, oand the property next to Torrespaña on Calle Juan Esplandiú. Meanwhile, it will also begin construction work at shopping centres in Porto Pi in Palma de Mallorca and Larios in Málaga.

The other part of the plan involves spending more than €20 million on the refurbishment work that is required in all of the buildings in order to obtain the environmental and energy certifications that will, for example, result in future savings on electricity bills.

Other very modern buildings

Nevertheless, Testa also owns several other iconic and modern buildings that will not need any work, at least in theory, such as Torre PwC (one of the four towers at the northern end of the Paseo de la Castellana) and the headquarters of Endesa, Uría y Menéndez, L´Oreal and Indra.

In addition, Merlin is immersed in a plan to restructure its portfolio following the acquisition of Testa. It plans to hold onto the office buildings and shopping centres that it has inherited and get rid of the residential properties and hotels. In fact, it has already put a batch of 1,500 homes up for sale. Together, the two companies have assets worth more than €5,000 million. The acquisition of 100% of Testa and the definitive merger of the two companies is scheduled to be completed on 30 June 2016.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Hispania Recorded A Profit Of €11M In H1 2015

31 July 2015 – El Economista

Hispania, the socimi controlled by the fund manager Azora Hispania Activos Inmobiliarios obtained a profit of €10.7 million during the first half of the year, which represented a 29-fold increase compared with the same period in 2014 (€0.4 million).

In H1 2015, Hispania, which began operations in March 2014 following its IPO, recorded turnover of €13 million, whereby multiplying its revenues in H1 2014 (€0.6 million) by 22, according to information submitted to Spain’s National Securities Market Commission (CNMV) yesterday.

Since its debut on the stock market, Hispania has invested in 32 assets, which have a consolidated gross value of €710 million.

During the second quarter of 2015 alone, the socimi acquired four assets – two hotels and two offices – and signed an agreement with Grupo Barceló to create the first hotel socimi.

During the first half of the year, Hispania also obtained additional financing of €70.1 million, taking its financial debt to €195.2 million.

Original story: El Economista

Translation: Carmel Drake

Colonial Buys An Office Building On c/Génova For €36M

31 July 2015 – Idealista

The real estate company Colonial has announced the acquisition of a prime office building measuring 5,000 m2, located at number 17, Calle Génova for €36 million. The property is leased to several high profile companies and represents the third purchase made by the company in the office segment this year.

The property, located at number 17 of the Madrilenian street of Génova, has a surface area of almost 5,000 m2 and 70 parking spaces. It is currently leased to several leading companies, whose names have not been disclosed. (…).

The real estate company, in which Juan Miguel Villar Mir holds a stake, said that “the prime position of this building, thanks to its central location, is strengthened further by its recent comprehensive renovation, its “very good” BREEAM certifications and its “A Rating” Energy Certificate, which certify that all of the construction components have been reviewed, to ensure the utmost energy efficiency and sustainability”.

The transaction, which was closed during the first half of the year, was advised by BNP Paribas Real Estate and is the third made by the company in the prime office sector this year.

In fact, after spending €36 million on this building, Colonial’s total investment this year amounts to €125 million. The three buildings that it has purchased in Madrid’s business centre have a combined above-ground area of around 26,000 m2.

The appetite for prime office blocks in the capital is high due to the scarcity that exists in the market for this kind of product, which attracts high quality demand and maximum rental prices. (…).

This latest operation fits perfectly into the real estate company’s new strategy, which consists of growing in the office market in the three major cities in which it has a presence: Madrid, Barcelona and Paris.

Original story: Idealista

Translation: Carmel Drake

WPP Buys, Sells & Leases Back New HQ In Madrid

28 July 2015 – Expansión

The British group WPP has closed a simultaneous operation for the purchase, and subsequent sale & leaseback, of Telefónica’s former headquarters on Calle Ríos Rosas in Madrid.

The investment, including the purchase and subsequent renovation of the property, will amount to €150 million. Following the refurbishment, the communication and publicity company will occupy the building under a lease contract and locate its Spanish headquarters there.

According to the real estate consultancy firm, Knight Frank, this purchase is one of the largest office building transactions carried out for own use in the Spanish capital. The consultancy firm has advised the seller of the building, the asset division of Nozar, which is currently immersed in bankruptcy proceedings.

Simultaneously, the communication and publicity group has sold the building to a British fund manager through a sale & leaseback transaction, in such a way that the British firm will occupy the property as the tenant and the fund manager will be the landlord.

The building is located at number 26, Calle Ríos Rosas in Madrid and has a surface area of 36,000 m2. WPP’s objective is to unify its offices in Madrid. In total, 2,500 employees work in the city at various companies, including Ogilvy Group, Burson Marteller and Hill & Knowlton.

Original story: Expansión

Translation: Carmel Drake

La Caixa: House Prices Increased By 2.65% YoY In Q1 2015

6 July 2015 – Cinco Días

The recovery in the housing market is strengthening with rising sales prices, an increase in the volume of mortgages and a decrease in the number of mortgage foreclosures. In parallel, major transactions are being signed in the market for offices once again.

The official statistics show that house prices increased by 2.65% YoY during the first quarter of 2015 and by 1.88% with respect to the end of 2014 – property prices fell by 31% on average during the crisis -. Furthermore, growth is being seen across all regions, with the País Vasco and the Balearic Islands leading the charge.

Between January and March 2015, 16.2% more house sales were registered than during the period from October to December 2014, and 9% more were recorded than during the same period in 2014. The sale of used homes rose by 23.8% during the first quarter.

Transactions involving foreigners – who are driving the sector – increased by 8.9% with respect to the same quarter in 2014. Certificates for mortgage foreclosures decreased by 4.3% with respect to the first quarter in 2013 and have now fallen by 14% since their peak in 2010. A report from La Caixa says that supply, demand and prices are all adjusting accordingly. The inclusion of Spaniards (as buyers) will happen in due course, supported by the “improved labour market and easing of access to credit” thanks to the ECB’s program and the clean up of the banking sector. There is still a high level of stock to sell and lease, and the market for the construction of new developments is only just beginning to recover. The study warns that we should continue to monitor the market for signs of a possible bubble.

Furthermore, activity is returning to the segments for offices, warehouses and commercial premises. During the first quarter, there was a five-fold increase in transaction volumes with respect to the same period in 2014, say Savills, and four purchases alone amounted to €1,340 million in total.

According to PricewaterhouseCoopers, Madrid is one of the European cities with the best investment prospects; that is reflected in the “surge in capital inflows, which began in 2013 and is not showing any signs of receding”. And the money is coming from all sources, including global funds and tycoons such as Warren Buffet. Spain is a good place to invest.

Original story: Cinco Días (by Carlos Gómez Abajo)

Translation: Carmel Drake

Colonial To Open 4-Star Hotel In Former Palace In Almería

9 June 2015 – Expansión

The real estate group Colonial is branching out from its traditional office market. It will open a resort hotel in Mojácar (Almería) in the next few weeks.

(…)

The building has been closed for years and so Colonial has undertaken a complete renovation of the property over the last few months. The facilities include the former Palace of the Marqués de Chávarri, constructed at the beginning of the last century, which will house some of the hotel’s common areas as well as some of the suites. It also has a large modern annex building which contains 140 rooms in total.

The hotel will be operated by the Catalan chain Fergus, under its Fergus Style brand. It will be called the Gran Hotel Palacio de la Marina and will be a four star establishment. It is located in the Marina de la Torre development, next to Marina Golf, an 18-hole course. The hotel has a fitness room, spa and several rooms for conferences and events.

Fergus Hotels, headquartered in Santa Susanna (Barcelona) operates 17 hotels in Mallorca, Ibiza, the coast of Barcelona, the Costa Brava (Gerona) and the coast of Almería.

(…)

Original story: Expansión

Translation: Carmel Drake

La Generalitat Leases ‘Distrito 38’ Building From GS

15 April 2015 – Expansión

La Generalitat de Cataluña has rented a building measuring 8,000 square metres in Barcelona’s Distrito 38 office complex, which will be occupied by the Tax Authority. The property used to be owned by Bankia but was acquired by Goldman Sachs.

Original story: Expansión

Translation: Carmel Drake

Merlin Acquires Three New Properties In Spain

14 January 2015 – El Mundo

Merlin has acquired an office building in Barcelona and two logistics warehouses in Getafe and Vitoria.

As a result of these transactions, the Socimi’s gross rentable area exceeds 680,000 square metres.

The Socimi Merlin Properties, one of the leading real estate companies listed on the Spanish stock exchange, which specialises in the acquisition and management of tertiary assets in the Iberian peninsular, has announced that it completed the purchase of three new assets in December. It spent €88.4 million on the acquisitions, which will generate rental income of €5.9 million, taking the total annual gross rental income the company generates from its portfolio of assets to more than €128.8 million.

The first acquisition involved an office building in Barcelona, number 8 of the WTCAP, which it bought for €36.5 million. This represents the second purchase made by the company in the landmark business park, following its acquisition of the building at number 6 in August. Number 8 has a gross leasable area of 14,543 square metres, plus 700 sqm of storage and 247 parking spaces.

The building in the WTCAP is partially leased to multi-national companies such as Panasonic, Technip and Colt Telecom. The acquisition price represents an initial gross rental yield of 5.6% (4.8% net) and the property has high growth potential, through the rental of its unoccupied surface area (equivalent to 35% of the total leasable area). If the building were fully occupied, the rental yield of the property would exceed 8%.

Meanwhile, Merlin Properties is continuing its commitment to logistics and industrial assets, where it now has a gross leasable area under management of more than 136,000 square metres. In December 2014, it bought a logistics warehouse measuring 16,242 square metres, located in the CLA in Getafe (Madrid), which is leased to the Galician logistics company Transportes Souto under a 10-year contract. The acquisition price (€12.5 million) represents a gross and net rental yield of 8.4%.

Finally, Merlin has also acquired a logistics warehouse measuring 72,717 square metres in Vitoria, located in the Júndiz business park, which is renowned for its excellent transport connections and for housing the only Mercedes Benz factory in Spain. The park is also home to several other prestigious companies, including Correos, DHL, DB Schenker, Azkar (Dascher) and Adif. The warehouse is leased under a 10-year contract to the well-known multi-national logistics company Norbert Dentressangle. The acquisition price (€28.58 million) represents a gross and net rental yield of 9.6%.

As a result of these three transactions, Merlin Properties’ real estate portfolio now has a total gross leasable area of more than 680,000 square metres and generates gross annual rental income of €128.8 million.

Original story: El Mundo

Translation: Carmel Drake

Axia Has Acquired An Office And 5 Warehouses For €69.33m

1 August 2014 – Estrategias de Inversión

The largest investment was in Alcobendas (Madrid), where it acquired an office building for €28.75 million.

This is proving to be a busy week for the Socimis – on Thursday, Hispania, Merlin and Lar all reported that they have made a number of investments, amounting to €377.1 million, and these companies are continuing to close transactions on Friday. In addition, Axia has invested €69.33 million buying a number of buildings.

Specifically, the company has announced the purchase of an office building in Alcobendas (Madrid) from IVG Institutional Funds for €28.75 million. The building has a gross leasable area (GLA) of 17,266 square metres, plus 396 parking spaces.

It has also acquired three logistics warehouses located in Cabanillas del Campo (Guadalajara), with a GLA of almost 37,877 square metres, for €16.68 million. Two of the warehouses belonged to Parques Industrialises Nuevas Áreas de Actividad Gran Europa and the other one was owned by Altamira Santander Real Estate.

Finally, Axia has also purchased a warehouse in Azqueca de Henares (Guadalajara) with a GLA of approximately 35,781 square metres and another in Dos Hermanas (Sevilla), with a total GLA of 42,466 square metres, for a total price of €23.90 million.

Original story: Estrategias de Inversión

Translation: Carmel Drake