Portugal’s Largest Hotel Group Opens its First Establishment in Madrid

10 October 2018 – Inmodiario

Pestana Hotel Group, Portugal’s largest multinational hotel group, has today unveiled Hotel Pestana Plaza Mayor – one of two projects that the company is developing in Madrid – which will be inaugurated at the beginning of next year as part of its Collection group, the most exclusive brand comprising luxurious and monumental buildings in premium locations.

This opening is the result of a strategic commitment by the group to various European capitals. According to José Roquette, Chief Development Officer at the Pestana Group, “Over the next five years, we are going to be strengthening the position of the Pestana brand as an international chain in the major global markets, always on a par with our leadership in Portugal. The opening of Pestana Plaza Mayor, the group’s first hotel in Madrid, represents a very important step in the realisation of our strategy. We are convinced that, even though it is a very competitive market, we will be able to establish ourselves thanks to our firm commitment to quality”.

The Pestana Group, founded in 1972, operates in 15 countries with almost 100 hotels, which receive more than 3 million tourists. It has extensive experience in hotel management in historical buildings, including through the network of Pousadas de Portugal (the equivalent of the network of Paradores in Spain).

Located in Plaza Mayor, in the heart of the Madrilenian capital, Pestana Plaza Mayor will comprise two historical buildings – the Casa de la Carnicería (subsequently the Third Town Hall and then the Municipal Newspaper Library) and the former Fire Station. The Pestana Hotel Group’s new hotel will involve an investment of €11 million and will contain 87 rooms, decorated in a contemporary style that respects its urban and historical location (…).

In addition to a cafeteria and bar, Pestana Plaza Mayor will have a restaurant in the hotel’s cloisters and an indoor spa with a swimming pool, all in the historical heart of Madrid.

Pestana Plaza Mayor expects to open to the public during the first quarter of 2019 (…).

Original story: Inmodiario

Translation: Carmel Drake

Malaga, or How the Sun is Shining Again on the Costa del Sol

14 August 2018

With sales and prices in rapid ascent, the real estate sector is firmly committed to continuing the recovery of the property market in the Andalusian city.

The sixth largest city in Spain, with 569,002 inhabitants in 2017, Malaga is the Andalusian city where housing prices have increased the most in the first quarter of this year, according to data from Urban Data Analytics, with a year-on-year increase of 19.4%. According to data from the Ministry of Development, valuation prices rose by 10.8% to 1,506.8 euros per square meter. The increase was also substantial compared to the fourth quarter of 2017 when the square meter in Malaga was priced at 1,440.40 euros per square meter.

The recovery of the residential property market in the city on Spain’s Costa del Sol can be largely explained by the rapid pace of acquisitions, which are being carried out by domestic and international buyers, and which have steadily increased in recent years. While there were around 3,150 transactions in 2013, there were close to 5,000 in 2015 and over 7,000 in 2017.

Also, compared to the token level of new construction in other Spanish cities, new developments in Malaga have been substantial. Just in the first quarter of 2018, 242 purchases of new homes were finalised in the city, equivalent to 12.3% of the total.

In its report, Vision 2018: the Real Estate Market in Malaga, the consultancy Savills Aguirre Newman notes that the market’s strength in the city will cause the Costa del Sol to reach record sales for the year, adding that Malaga has positioned itself as the main power in Andalusia, even ahead of the capital, Sevilla.

Thus, the consultancy stresses that construction began on 5,236 homes in the Andalusian city, compared to the 2,980 in the capital. As for deliveries, Malaga finished a thousand more homes than Sevilla: 2,580 finished units compared to Sevilla’s 1,511.

Projects underway in Málaga

Faced with this data, operators such as VBare, Inbisa and Quabit have already finalised operations in the city, which also stands out for the demand for land for logistics platforms, large commercial projects and student residences.

In April, Quabit stated that it owns 200,000 square meters of land in the province of Malaga for the construction of 1,700 homes, equivalent to 20% of the developer’s portfolio of land. For its part, VBare completed the acquisition of 14 homes in the city in June for 1.35 million euros for placement on the rental market, for which it expects a profitability of approximately 5.1%. Gilmar, a real estate agency, also chose Malaga’s city centre as the site of its 32nd office.

With the presence of 40,087 companies, of which 87.1% are in the service sector, Malaga’s office market has also once again taken off. Another report by Savills Aguirre Newman places the occupancy rate of offices in the city’s prime area at 90%. Rents are also increasing, reaching 18 euros per square meter in the central street Larios. According to the consultancy, the trend will continue in 2018, which will cause buildings that have been unoccupied for nearly a decade to be taken up. The demand for land for logistics platforms is also increasing in the city, particularly for areas exceeding 5,000 square meters, which are rare.

On the commercial side, one of the larger projects underway is the Designer Outlet Centre, which Sonae Sierra and McArthurGlen have added to the Plaza Mayor shopping centre, with an additional 85,198 square meters (added to the rest of the existing complex), housing a total of 107 stores.

Also, the new wave of student residences has also reached the Andalusian city. Syllabus, a subsidiary of Urbania, will build a new student residence in the historic centre of Malaga in a ten million euro investment. The new development will have 143 rooms and an area of 4,600 square meters and will be ready by 2020.

Lastly, in June, the Malaga City Council approved a project for a luxury macro hotel in the city’s port. The hotel will be a 150-meter-high, 45,000-square-meter building that will be developed by the Qatari investor Abdullah Al Darwish. The building, which will involve an investment of 116 million euros and will be located in the Dique de Levante, will begin construction in 2020 and will be inaugurated three years later.

Original Story: EjePrime – C. De Angelis

Translation: Richard Turner


Dutch Fund Acquires ‘Mercado de San Miguel’ For Record Price

28 July 2017 – El Confidencial

The Mercado de San Miguel has a new owner. A Dutch fund specialising in the real estate sector has just taken ownership of this historical and iconic building in Madrid. And it has done so for €70 million, a figure that, in absolute terms is not by any means one of the largest in the market, but which, nevertheless, represents the most expensive transaction per square metre that has ever been closed in the Spanish real estate market.

According to sources consulted by El Confidencial, for every one of its 1,200 m2, the buyer has paid €60,000, an amount that breaks all real estate records and which represents, for the founders and promoters of the project, several times their original investment.

The person that has led this project from the beginning is Montserrat Valle Hernández, the majority shareholder of the company that used to own the market, El Gastródomo de San Miguel. She was the architect behind the renovation of this iconic building, which last year marked its first century of life.

Sources consulted explain that prominent shareholders also included bankers such as Pedro Guerrero Guerrero (President of Bankinter), Salvador García Atance Lafuente (former President of Morgan Stanley in Spain), Paul Gomero Vaquero (Private Banking Partner at A&G), as well as the well-known journalist Guillermo Fesser and the businessmen Víctor Josue Alarcón, Pedro Gómez Blazquez and Juan Ramón Ramírez Lozano.

Aguirre Newman participated in the operation, which was signed on Thursday at a notary’s office on Calle Serrano in Madrid. Aguirre Newman led the sales process and studied the various offers that were received from domestic and overseas groups, to bring this deal to a successful conclusion. Sources at the consultancy firm declined to comment on the transaction.

A centenary building

The unique Mercado de San Miguel, located in the square of the same name, next to Plaza Mayor, was acquired more than a decade ago by a group of companies led by Monserrat Valle with the aim of restoring it and turning it into a gastronomic centre.

On 13 May 2009, it reopened its doors, restoring the splendour that it enjoyed in its heydey. The building was constructed between 1913 and 1916 and was designed by the architect Alfonso Dubé y Díez. Nowadays, it still retains its original iron structure dating back to the beginning of the 20th century, which stands out as one of its greatest features (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Approval Granted For Sonae & MacArthurGlen’s Outlet Complex In Málaga

22 May 2017 – Eje Prime

The green light has been given for the creation of the Designer Outlet Center.

Sonae Sierra and MacArthurGlen have obtained a construction licence from the Town Hall of Málaga to build an outlet complex for fashion and accessories brands, next to the Plaza Mayor shopping centre.

The project, born out of a joint venture (Doc Málaga Siteco) between the Portuguese retail group and the British property developer, involves extending the shopping centre in Málaga by 85,198 m2, demolishing the existing night-time leisure areas and creating the Designer Outlet Center space.

To start the expansion works, Doc Málaga Siteco must pay an extra €2.5 million to the Town Hall for the completion of infrastructure work in the surrounding area. The renovated Plaza Mayor will have 107 stores in total, doubling the number of existing stores. It is expected to attract 2.4 million visitors per year.

McArthurGlen, which manages 22 retail complexes in Europe and Canada, closed 2015 with comparable sales €4,000 million, up by 10% compared to the same period a year earlier.

Sonae, meanwhile, owns a network of 250 stores in Portugal and launched thirteen Sport Zone shops and five Salsa outlets in Spain last year. The Sports&Fashion division, which includes the Salsa, MO, Sport Zone and Losan brands, amongst others, increased its turnover by 11.2% in 2016, to €1,439 million.

Original story: Eje Prime

Translation: Carmel Drake

Mazabi Invests €170M In Several Projects In Central Madrid

16 March 2017 – Mis Locales

Following its acquisition of Hotel Madrid and Teatro Albéniz for refurbishment, Mazabi has launched several other renovation projects in the area.

The first involves 3 residential buildings on Calle Los Madrazo. They are all classic buildings, constructed at the beginning of the 20th century, with protected façades and typical doorways. They house 25 homes in total, plus 4 retail premises measuring 1,600 m2 and a large, exclusive tertiary-use pavilion, located in the courtyard between the buildings. The buildings are situated in a very sought-after location in the centre of Madrid.

Meanwhile, Mazabi has also invested in two assets located close to La Plaza Mayor, where it will spend €50 million on the renovation and then put the properties up for long-term rent.

According to comments made by Juan Antonio Gutiérrez (CEO at Mazabi) “At Mazabi, we are continuing with our policy of combining business with aesthetics and traditional locations”. Hotel Madrid and Teatro Albéniz are clear examples, with the latter being declared a Property of Heritage Interest by the Community of Madrid. Mazabi is ensuring its survival and is thereby avoiding the loss of one of the most iconic spaces in the area.

The consideration paid was not disclosed, however, on the basis of market rental income that will be generated by these properties once the renovation work has been completed, they could be worth between €70 million and €80 million, according to one expert in the real estate sector.

Another one of Mazabi’s project involves a building in La Plaza Mayor in Madrid. There, it is going to refurbish the homes with the goal of long-term heritage. The existing tenant, so representative of the Plaza, will continue to occupy the building’s retail premises.

Moreover, in September, the firm is expected to start the refurbishment work at another of its projects, located on Calle Santa Catalina, 4, next to the Congress of Deputies, to reposition that asset in the market.

Mazabi closed 2016 with assets under management amounting to more than €1,050 million, with a presence in 14 countries and a team of 22 professionals located in Madrid, Bilbao, Barcelona and Marbella.

Currently, Mazabi has the “aim” of investing more than €300 million during 2017, focusing on these kinds of management projects, through investment vehicles with domestic and international partners. One of its projects includes a Socimi constituted through the contribution of long-term rental assets (retail premises, out-of-town retail stores, offices and hotels in Spain). The value of the assets in its current portfolios and the pipeline of expected purchases exceeds €100 million.

Original story: Mis Locales

Translation: Carmel Drake

Recovery Has Investors Stocking Up On Spanish Malls

11 February 2015 – WSJ

The Spanish shopping experience is getting a multibillion-dollar makeover as the nation’s economy improves and foreign investment flows in.

After a year of tepid recovery from recession, consumer spending is picking up. Retail sales rose 1.9% in November from the same month in 2013, the fourth consecutive monthly increase, after six years of decline. Although nearly a quarter of the workforce remains unemployed, the economy is expected to expand by 1.7% this year, compared with 1.1% in the euro area as a whole, according to the Organization for Economic Cooperation and Development.

That, in turn, is helping to fuel investment in the retail property sector. In all, investment in retail real estate totalled €3.34 billion ($3.78 billion) in 2014, nearly triple the amount of the previous year and topping the record of €3.1 billion in 2006, according to property consultant JLL, formerly known as Jones Lang LaSalle. At least 67% of investments came from outside Spain. There was more investment in retail than in any other class of commercial real estate over the past year, according to JLL.

International investors are expected to pump more money into retail properties this year, including new construction, according to Adolfo Ramirez Escudero, president of property consultant CBRE Group Inc. in Spain.

Much of the money will go toward large-scale projects that mix shopping and entertainment, known as retail resorts, as well as outdoor outlet malls that resemble small cities where shoppers can find discounted designer brands.

Developers see opportunities for strong returns because prices of land and buildings are still depressed six years after the financial crisis. With the prices of many commodities at relatively lower levels and Spain’s unemployment so high, builders can also construct projects at a reduced cost. Meanwhile, the number of tourists to Spain is at a record, bringing with them money to spend.

The entrance of big global investors is a sign that the Spanish market is stabilizing, said Pedro de Churruca, general director of JLL in Spain.

“People are clearly coming back to shopping centers as a consequence of higher disposable income,” said Ismael Clemente of Merlin Properties Socimi SA, Spain’s largest real-estate investment trust, which in July purchased Marineda City shopping center in La Coruña from a local developer for €260 million. The three-year-old retail complex is the second-largest in the country.

The shopping center opened “in probably the worst possible moment in Spain,” said Mr. Clemente, referring to Spain’s economic doldrums. “We saw that there was a clear upward movement expected in rent, so we thought it was an interesting bet.”

The U.K.’s Intu Properties PLC purchased Spain’s largest shopping center, Puerto Venecia in Zaragoza, for €451 million in December. The British real-estate investment trust also announced a partnership with Spanish developer Eurofund to build four more retail resorts in Spanish cities as part of a plan to invest £1.2 billion ($1.8 billion) over 10 years.

Construction on the first of these projects, Intu Costa del Sol in the Malaga suburb of Torremolinos, —is scheduled to begin in the second half of 2015 and be completed by 2018. The 1.9-million-square-foot development will include amenities Intu is known for: a minitheme park, a surf lake, artificial ski slopes and a gourmet market, as well as shops and restaurants of high-end chains.

Intu owns 18 U.K. shopping centers, but Spain is the company’s first international market, which it entered in 2013 with the purchase of Parque Principado shopping center in Oviedo.

“We’re keen to keep growing, and if we focus on the prime, best shopping centers in the market, there are few opportunities in the U.K.,” said Martin Breeden, regional director of Intu. “Spain is a market that seemed open to international investment and where, frankly, there are not a lot of good shopping resorts in existence.”

Intu has purchase options on land for similar developments in Valencia, Vigo and Palma de Mallorca.

The Intu Costa del Sol site is about 3 miles from Malaga’s most-visited shopping center, Plaza Mayor, which opened in 2002. Sonae Sierra of Portugal, which owns and manages Plaza Mayor, has joined with U.K.-based McArthurGlen Group and U.S.-based Simon Property Group Inc. to expand the 572,400-square-foot shopping area to include a designer outlet mall. The €115 million development will add 324,000 square feet of leasable area and be the first large-scale outlet mall in Andalusia. Construction is scheduled to begin in the second half of this year, and the first phase is set to open in 2017.

Joan Jove, McArthurGlen’s regional development director, said Plaza Mayor is a “very strong, established retail scheme” and the planned adjacent outlet mall will be one-of-a-kind in the region. Mr. Jove said the project is mainly targeted at the 10 million tourists who visit Costa del Sol each year.

Intu’s Mr. Breeden said he wasn’t concerned about competition. “We’re very confident that there will be fantastic demand for our project.”

Sonae Sierra said it also plans to spend €55 million to update four of its other shopping centers around Spain within the next five years.

Elsewhere, TIAA-CREF, a U.S. money manager, has formed a joint venture with Neinver, a Spanish outlet-mall developer, to create TH Real Estate, which will own properties in Spain and other countries. Among their projects is the €80 million Viladecans The Style Outlets in Barcelona, which is scheduled to open in 2016.

“There is still plenty of money chasing product, and plenty of people with big debt who want to sell product,” said CBRE’s Mr. Ramirez. “I expect big volume this year.” He said large transactions could start to level off by next year as prices increase.

Original story: WSJ (by Shaheen Samavati)

Edited by: Carmel Drake