Tag: online sales

El Ingenio to Invest €6MM in Renovations, Creating 120 Direct Jobs

4 October 2018

Salsa Real Estate plans on expanding the shopping centre by just over 4,800 square meters to modernise its facilities in an attempt to respond to the growth of online sales.

The El Ingenio shopping centre, owned by Salsa Inmobiliaria, which is a benchmark in the region, visited by more than nine million people a year, has set itself the goal of remodelling its facilities after 18 years in operation. The goal is to purpose is to modernise the facilities to face growing competition from online sales and to increase its current size by more than 4,800 square meters (10% of its current surface area) to attract new brands and consolidate existing ones.

The project will involve an investment of approximately six million euros, which will create 120 direct jobs. According to the shopping centre’s director, Leonardo Galdeano, El Ingenio is currently the largest private employer in the region with more than 700 direct employees and about 500 indirect employees. “We want to adapt to the current reality of the market. Online sales are growing by 20% per year and are considered the main enemy of trade and employment. We intend to provide new experiences for our customers, creating new leisure areas and circuits and continuing to generate wealth in Axarquía,” Mr Galdeano said.

According to Salsa Inmobiliaria, the idea is to prepare El Ingenio for the future, offering a newer and more satisfying shopping experience and incorporating complementary activities that attract people from both inside and outside the region.

In this sense, Mr Galdeano stated that half of the people who visit the shopping centre every year (4.5 million) come from outside Vélez-Málaga and Torre del Mar, creating synergies and providing a major boost to the local economy, as those visitors also tend to interact with other areas of the city.

“This is a firm commitment towards sustainable economic growth and to continue generating employment based on people, local commerce and innovation,” Salsa announced.

With the planned six-million-euro investment, the company’s goal is to carry out a thorough modernisation of the mall, which will allow the centre to accommodate new establishments and build the necessary extensions to existing stores. According to Mr Galdeano, “the world leader Inditex, owner of Zara, closed 99 stores last year that did not comply with their new requirement for surface areas and modernisation.”

The city council is currently processing a modification to elements of the General Land-Use Plan (PGOU) to allow the centre to increase its commercial area by 4,860 square meters, occupying mainly two areas in the immediate region, the first next to the service station, and at the opposite end, at the main entrance, where one of the centre’s chimneys is located. The matter, ruled on by the Urbanism informative commission, was approved by the representatives of the PSOE, while the rest of the political groups, PP, PA, GIPMTM, IU and the non-attached mayor, abstained.

The mayor, Antonio Moreno, explained that his group is gathering the necessary information on the project to inform the political groups and the merchant’s associations of Vélez and Torre del Mar, which have come out against the project. Salsa Inmobiliaria has set itself the goal of completing the renovation by 2020, the shopping centre’s 20th anniversary.

Original Story: Diário Sur – Agustín Peláez

Photo: A. Peláez

Translation: Richard Turner

Logistics: Real Estate’s Ugly Duckling Sees its Investment Figures Soar

30 September 2018 – El Confidencial

It has always been the ugly duckling of the real estate sector. Nevertheless, the boom in e-commerce, the positive evolution of consumption and of the economy, in general, and real estate in particular, has triggered investment in these types of assets. For more than a year now, the sector has been starring in some of the most high-profile operations in the market, both at the corporate level, as well as in terms of the sale of portfolios and assets, attracting money from large international funds, as well as from domestic ones.

The data speaks for itself. Investment in logistics during the third quarter of 2018 – including plots of land – amounted to €450 million, equivalent to four times more than during the second quarter and 436% more than the figure registered during the same period a year earlier. That is according to data from the consultancy firm JLL, which shows that investment amounted to €872 million between January and September, 53% more the volume accumulated during the same period in 2017.

Moreover, the firm’s forecasts for the final stretch of the year for this sector are optimistic. “We expect the total volume to amount to €1.2 billion by the end of the year, 20% more than we expected last quarter, due to the good results and the fact that strong investor appetite is still alive”, said Borja Ortega, Director of Capital Markets at JLL.

“The logistics market is the absolute star of the real estate investment market in Spain. Investors see the potential associated with a market that has been growing for years”, says Ortega. Why? Its own fundamentals, the lack of product for investing in other segments such as offices and retail or the creation and consolidation of investors specialising in logistics”, he said.

In the last year and a half, the logistics sector has captured the media’s attention thanks to the completion of several very high profile operations. For example, on 25 September, Mango’s logistics platform in Barcelona was sold for €150 million. That asset, with a surface area of 181,000 m2 and owned by the Belgian investor group VG Partners since the end of 2016, was sold to the British Socimi Tritax Big Box.

It represented the largest investment in a single asset in the Spanish logistics market for the last four years since Logicor purchased some logistics facilities in Guadalajara spanning more than 320,000 m2 from Gran Europa for €133 million.

The operation also exceeded the €119 million that Blackstone paid in July to acquire the Socimi Lar’s logistics portfolio. In total, that deal involved 162,000 m2 of space spread over four logistics warehouses in Alovera (Guadalajara), one in the Juan Carlos I industrial estate of Almussafes (Valencia) and a plot for logistics development in Cheste (Valencia) spanning a further 182,000 m2.

Assets, portfolios, corporate operations

During the third quarter, there was a lot of movement in the sector such as the sale of two logistics portfolios – Hina Project with 6 warehouses and Gran Europa Portfolio with 3 warehouses – four purchases of logistics warehouses and a project comprising two plots in Cabanillas. Those transactions were accompanied by the purchase of two plots, one on the Centro —Ciudad del Transporte Industrial Estate in Guadalajara – and another in San Fernando de Henares. The latter was acquired by Merlin Properties for the construction of a logistics platform measuring 100,000 m2 (…).

All of these operations are happening in the midst of a genuine boom in e-commerce and online sales, a market in which the major online operators such as Amazon, Mercadona and Inditex have committed heavily. And for good reason, given that in 2017 alone, online sales moved more than €30 billion, according to data from the Spanish National Competition and Markets Commission (CNMC). And that figure is rising.

But the appetite of buyers is not only limited to the purchase of assets. At the corporate level, there have also been some significant transactions in recent months. A year ago, China Investment Corporation (CIC) completed the purchase of Logicor for €12.25 billion, one of the largest logistics companies in Europe and the largest owner of logistics assets in the Spanish market with a portfolio spanning more than 1 million m2 located primarily in Madrid and Barcelona. That operation became the second largest real estate purchase in history and the fourth largest by a Chinese company in Europe.

Meanwhile, P3 Spain Logistic Park, the logistics centre Socimi that the sovereign fund Singapore GIC owns in Spain, made its debut on the Alternative Investment Market (MAB) last year with eleven logistics centres that span a total surface area of 321,392 m2 and which are spread across five autonomous communities, although most are in Madrid and Castilla-La Mancha.

Even the Murcian businessman, Trinitario Casanova, through Grupo Baraka has backed the logistics sector. In February this year, he purchased a logistics-industrial use plot located in the municipality of Sant Esteve Sesrovires, in Barcelona.

A sector traditionally forgotten

“For years, the logistics sector has been one of the ‘great forgottens’ of the real estate sector. Nevertheless, today it is clearly a segment to which investors pay a lot of attention. (…). In fact, given the competitive pressure, it is the only sector where returns are continuing to fall. Prime returns at the end of the third quarter of 2018 amounted to 5.25%, making them lower than during the last upward cycle in 2006, when they amounted to 5.75%”, said Ortega.

On the other hand, unlike what has happened in other real estate sectors such as residential or offices, whose activity is concentrated in the major cities such as Madrid and Barcelona, 34% of logistics investment in the third quarter has been in Cataluña and 32% in Madrid. The rest has been concentrated in other regions such as Valencia (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Popular To Put 15,000 More Properties Up For Sale

16 July 2015 – Expansión

Popular is strengthening its strategy to achieve one of the main objectives it has set itself for the coming years, namely to accelerate the divestment of its non-productive assets. This mainly relates to its real estate portfolio, which includes €15,000 million of problem loans to developers, SMEs and individual borrowers, and a further €14,600 million of foreclosed assets.

One of the initiatives that the bank has set for 2015 is to increase the number of finished properties available for immediate sale through its web channel, by 15,000. It is looking to boost its web channel and thinks that it has great potential. This increase of 15,000 assets represents an increase of almost 50% to the portfolio that the bank currently has available for sale (taking the total to around 30,000 properties).

Channels

Currently, Popular sells 73% of its assets through its network of branches, another 21% through commercial agents and only 6% online. In the rest of the sector, digital channels account for 50% of such sales.

The entity, in turn, is accelerating the sale of large portfolios to wholesale investors. In the last two quarters, Popular has closed four such transactions amounting to €333 million, with a 9% discount on the net book value. These operations have included various assets, from residential land to commercial properties and garages.

As a result, the bank has doubled its volume of property sales in the last year. During the first quarter, Popular closed divestments amounting to €534 million, compared with €249 million recorded between January and March 2014, an increase of 115%. In this way and in just one quarter, Popular sold assets with a value very similar to the total amount sold in the whole of 2013, when sales amounted to around €700 million.

Popular’s strategy to dispose of its problem assets has been boosted in the last year and a half, following the partnership agreed in 2013 with the funds Värde Partners and Kennedy Wilson. That transaction, structured through the joint venture known as Aliseda, is not only generating capital to strengthen the bank’s balance sheet, but is also seeking to take advantage of the funds’ extensive experience in this business to accelerate the sale of assets, reduce the length of the recovery process and maximise divestment prices. Kennedy Wilson and Värde Partners, which control 51% of Aliseda, have almost €25,000 million in assets under management. (…)

Original story: Expansión (by M. Martínez)

Translation: Carmel Drake