Blackstone, Lar, Crown…the Appeal of the Port Feeds Valencia’s Logistics Boom

18 November 2018 – El Confidencial

The growth of cargo traffic at the Port of Valencia and its role as a maritime port of entry for the ‘hinterland’ that runs from the central area of the Mediterranean to Madrid and its metropolitan area, are feeding a boom in logistics operations in the area around the capital of the Community of Valencia. Large funds and multinationals such as Blackstone and the US manufacturer of metal containers for the agro-food sector, Crown Holdings, have pounced on the chance to occupy spaces in well-communicated areas, either to develop projects for third parties or to set up shop themselves ahead of forecast growth in operations towards clients located in the area.

The latest operation has been finalised very recently with the acquisition by Grupo Lar of a plot measuring 40,000 m2 for the construction of a warehouse measuring 25,000 m2 in Quart de Poblet, next to the access point to Valencia along the A-3 motorway, which connects the city with Madrid.

That ring road and the industrial estates located either side have been experiencing important movements for several quarters. Business sites such as those in Loriguilla and Riba-Roja are on the verge of saturation and are still welcoming new projects, such as the logistics platform that MRW inaugurated in July on the El Oliveral site. That same month, Blackstone acquired Lar España’s logistics portfolio for €120 million, which included land for development in Cheste (also on the A-3 axis) and a warehouse in the Juan Carlos I Park in Almussafes, where the Ford factory and an important proportion of its auxiliary industries are located. The speculative bet of the US investment bank is seeking to take advantage of the shortage of land dedicated to storage and transport management operations that is starting to be seen in Valencia.

Last year saw record leasing figures, with more than 220,000 m2 of space leased, up by 69% with respect to the previous year, according to a report compiled about the logistics market in the city by CBRE, one of the most active consultancy firms in this real estate segment in Valencia and its metropolitan area. The increase in leasing in Valencia is running in parallel to the market in Madrid, which rose by 100%, and despite a notable decrease in Barcelona, which saw a sharp drop in the volume of surface area leased (…).

CBRE has identified three major areas for logistics operations. The first is the town centre and the first storage arc focused on serving the city and its surroundings. The second arc is very closely related with companies linked to the port activity. That is where the Riba-roja, Loriguilla and Cheste industrial estates are located, on the motorway that connects Valencia with Madrid. Then, there are the new logistics developments that are being built in the north in Parc Sagunt (…).

The potential demand is high, estimated at 1.7 million m2 across the three rings, according to estimates from CBRE. But the lack of available plots in prime areas is endangering the “major opportunities in the business”. The returns on those well-located plots are the highest (6.75%) of any of the main European centres, above those in Madrid and Barcelona (5.85%). “There is a general need for new at risk developments”, said the consultancy firm rather than for “turnkey” projects, which the local property developers have been focusing on until now.

Original story: El Confidencial (by Víctor Romero)

Translation: Carmel Drake

On the Hunt for Capital: Socimi Quonia Considers Issuing Bonds to Finance its Growth

11 July 2018 – Eje Prime

Quonia does not want to put any limits on its capacity for indebtedness. The company is considering carrying out a corporate bond issue to increase its financing options and, whereby, continue with its development plan, according to explanations provided by the company’s CEO, Eduard Mercader, speaking to Eje Prime. Through this move, Quonia would also open itself up to institutional investors.

The fact that Socimis must dedicate at least 80% of their profits to dividends “limits their capacity to accumulate debt”, explains Mercader. In this way, the main option for these types of companies when they are looking to grow is primarily through capital increases. However, the company’s executive is looking for “alternative formulae”, to apply “in the short term”.

Mercader’s decision to resort to bonds is also a consequence of the difficulties faced when completing capital increases with investors outside of Europe, such as in this case. Quonia was created in 2014 by the Mexican investors Divo Milán and Ana Saucedo and investors from that country currently contribute the majority of its resources.

Quonia has just completed a €3 million capital increase, although the company had approved the possibility of raising up to €26.5 million. Before the end of the year, the company will obtain another €1 million through the capitalisation of investor loans.

Although the resources forecast by the Socimi were greater, Mercader says that the final amount does not limit the company’s development plan. “We adapt ourselves to the capital that we receive”, says the executive, and adds that Quonia “is continuously raising funds”.

After its launch with the purchase of an asset in Barcelona, Quonia has been attracting different investors from Mexico, Europe and the USA. In July 2014, the company adopted the Socimi regime and in July 2016, it made its debut on the Alternative Investment Market (MAB) where it is currently listed.

“We are very much a real estate Socimi, we do not have a financial profile at all”, explains Mercader – “we buy assets with a lot of potential”. The company’s portfolio currently comprises seven assets, located in Barcelona, Lagreo and Sevilla, of a residential, hotel and commercial nature. The valuation of the company’s portfolio in October 2017 amounted to €85 million, with a gross value of €57 million.

The company is currently finalising the sale of one of its properties. Specifically, the building located at number 166 Calle Balmes in Barcelona. It is an eight-storey residential property, with commercial premises on the ground floor, constructed in 1930 in the rationalist style. Both this property and the one at number 45 on the same street are being used as residences for students.

Quonia, whose average investments range between €10 million and €13 million, is on the lookout for opportunities in Spain to continue growing its portfolio. With Barcelona and Madrid always in its sights, the company is branching out to new destinations for its new investments in cities such as Málaga and Sevilla, as well as País Vasco, where it is analysing several operations. Palma is another city where it is considering investing (…).

Original story: Eje Prime (by P. Riaño and J. Izquierdo)

Translation: Carmel Drake

JLL: Madrid is one of the World’s Most Attractive Real Estate Markets

6 March 2018 – Expansión

Madrid is one of the most attractive cities in the world for investing in the real estate sector and now competes with the global giants. That is according to a report by the real estate consultancy JLL, which places the Spanish capital on the second tier of the ranking. On the first tier, it places the planet’s seven major cities – London, New York, Paris, Singapore, Tokyo, Hong Kong and Seoul – which are now being chased by the so-called “contenders”, which are those cities that have experienced the most rapid growth in terms of real estate investment over the last decade and which, nowadays “have better development and attraction power” for large investors. Besides Madrid, the cities that stand out in this ranking are Los Angeles, Shanghai, Beijing, Amsterdam, Chicago, Toronto, San Francisco, Washington DC and Sydney.

Meanwhile, Barcelona is placed in the group of cities that stand out for their degree of influence at the global level, a category that it shares with Brussels, Frankfurt, Genoa, Kyoto, Miami and Vienna. “They are cities that have the most stable real estate markets due to their strategic locations for taking transnational decisions, hosting cultural events and doing business”, says the report Cities of the World: Cartography of Success, prepared by the consultancy firm in collaboration with The Business of Cities.

To prepare this ranking, the report is based on a rating system that takes into account 44 variables. They include the size of the markets, the infrastructure in place, the presence of large companies, the capacity to attract talent, telecommunications and the commitment to specialisation and innovation.


In the case of Madrid, JLL highlights several aspects that place the Spanish capital on a clear trajectory towards the real estate peak: “Robust infrastructure, global connectivity, a large number of international conferences and conventions and a solid reputation”.

Another one of the elements that makes Madrid one of the major global destinations for real estate investment “is the forecast growth in office rents”. Not in vain, the Spanish capital is the European city where office rental prices are forecast to grow by the most during the period 2018-2020 (+3.6%), followed, incidentally, by Barcelona (+3.1%) and ahead of Manchester, Helsinki and Lisbon, according to JLL.

It is worth remembering that Madrid and Barcelona are the clear leaders in terms of the growth in residential asset prices in Spain. Homes became 17.1% more expensive in the capital of Spain and 14.8% more so in the Catalan capital, which lost ground in the last few months of the year due to the secessionist challenge, according to Tinsa. In any case, homes are still 20.3% more expensive in Barcelona than Madrid.

The appeal of Barcelona

In addition, Madrid is ranked as the fourth favourite city for commercial brands looking to locate stores, after London, Paris and Milan. Barcelona also features in the top 10: it occupies seventh place.

(…) In this regard, JLL highlights several aspects that justify its added value, such as “its tourist, cultural and business appeal”. Moreover, it points out aspects such as the fact that Barcelona is the fourth-ranked city in Europe in terms of visitor numbers.

The consultancy firm also emphasises Barcelona’s growing reputation as a smart city, “in large part thanks to the influence that the development of the 22@ business area has had in Barcelona. It has been erected as a technological hub, where large companies and start-ups are committed to setting up shop” (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Socimis & Property Developers: Two Sides of the Same Coin

4 March 2018 – Expansión

Property developers and Socimis are two sides of the same coin on the stock market. The two large segments of the listed real estate sector in Spain are moving at different speeds on the stock market after the 2017 results season. Whilst the Socimis, which specialise in the rental of non-residential buildings, are maintaining their cruising speeds, the purely residential property developers are being punished by investors, especially in the case of Neinor.

The company led by Juan Velayos has recorded a share price decrease of 18% this year, reaching its lowest levels since it started trading on the stock market at the end of March last year.

The property developer has just presented its results for 2017, which reveal that it registered a loss of €4.6 million despite generating revenues of €225 million. Moreover, just €77 million of the revenue figure proceeded from the property development business, with the delivery of 313 homes, a rate that is well below the 4,000 units that the firm promises to reach within two years (2020). For 2018, its objective is to hand over 1,000 homes. Investors have penalised the announcement that the company is not going to be able to maintain the volume of house deliveries forecast in its initial roadmap either this year or next.


The market’s reaction against Neinor has been virulent. “The time it takes to obtain licences is getting longer and the curve of expected deliveries for 2019 is being delayed until 2020”, explains Velayos, who acknowledges that “we measured poorly”. The company has revealed that it is going to change its strategy of buying only “finalist” land (plots that already have the necessary licences for development) and is going to invest €200 million buying land under management, which is more abundant in terms of supply but which will involve much longer construction times.

Like Neinor, Aedas is also trading below its debut price on the stock market. Its share price has lost just over 9% of its value so far this year and did not vary following the results. During its first year of activity, the real estate company created with land purchased by the fund Castlelake over the last few years recorded revenues of €38.6 million, with a net margin of €12.2 million and a loss of €40.1 million. The losses are due primarily to non-recurring expenses relating to the company’s stock market debut, which had a negative impact of €31.55 million, and a one-off cost of €26.1 million linked to the incentive plan for senior management (…)

Following the cumulative punishment this year, the discount on the net value of their assets amounts to around 5% in the case of Neinor and reaches the double digits in the case of Aedas. But, are they attractive prices? (…). For the time being, analysts are maintaining their ‘buy’ recommendations for the pair (…).

Moreover, the experts consider that both Neinor and Aedas have a bullish potential of around 35% from their current levels (…).

In the case of the classic real estate companies, the results have been varied. Quabit (…) saw its turnover decrease significantly, by more than 80%. The company has handed over just six homes this year, after years focusing on its financial restructuring and the sale of its stock. Now, it has launched an ambitious business plan, which will allow it to resume its property development activity and its share price is up by 6% on the stock market so far this year.

Meanwhile, the Socimis are experiencing a different reality. The four large real estate investment companies (…) debuted on the stock market in 2014 with a combined valuation of €2.6 billion and no assets on their balance sheets. Now, their combined market capitalisation stands at more than €9.3 billion and their portfolios are worth more than €18.6 billion. Including Colonial, the combined profit of these companies has grown by almost €1 billion YoY.

The valuations of the Socimis are much more adjusted. The large players have closed the first two months of the year with share price gains of between 4% and 5%, with the exception of Axiare, which has been limited by the takeover price set by Colonial (…).

Original story: Expansión (by Rocío Ruiz and Enrique Utrera)

Translation: Carmel Drake

C&W: 130,000 m2+ Of Office Space Leased In Sant Cugat Since 2015

7 November 2017 – Eje Prime

The office business in Cataluña is not all about Barcelona. Sant Cugat del Vallès has become the most sought-after office sub-market on the periphery of the Catalan capital, not only for users but also for investors and property developers. More than 130,000 m2 of space has been leased there in the last three years, according to the Marketshot report, compiled by the real estate consultancy firm Cushman & Wakefield.

In 2015, more than 75,000 m2 of office space was leased in this Barcelona town. Sant Cugat del Vallès has always played an important role in Barcelona’s office space leasing figures. In the years 2015 and 2016, 54 rental operations were closed in Sant Cugat covering a surface area of 104,000 m2 (27% of the total signed in Barcelona as a whole).

The most important operations, including turnkey projects, in terms of size in recent years have been: Stradivarius (with 26,400 m2), Laboratorios Echevarne (with 12,000 m2), Mapfre (with 10,000 m2) and Natura Bissé Internacional (with 9,200 m2).

“Although the sub-market is maintaining the tone, the volume of absorption in 2017 has not exceeded 18,000 m2 (7% of the total leased in Barcelona)” – explain sources at the consultancy firm – “Nevertheless, we are not surprised to see fewer operations, given that the supply has been decreasing and the limited space that is still available is very fragmented”.

There is more than 115,000 m2 of potential office space in Sant Cugat, of which 100,000 m2 is located on buildable land. The potential for stock growth in the area is significant and, if all the projects come to fruition, the office park in this sub-market could increase by 22%.

As a result, the plots of land have great potential to respond to the lack of space in the area. “The Can Sant Joan and Can Ametller areas stand out for being home to the most iconic projects. Moreover, they are very well connected through their access to both public and private transport”, explain sources at the consultancy firm.

The increase in activity in the office market in Barcelona, the appeal of different business areas, other than the CBD and the city centre, added to the pre-leasing formula, which is present in the Barcelona market again for the first time since 2008, are all driving up rents. In the last year, the maximum rent in the peripheral areas rose by 7.5%; the minimum had been maintained between 2013 and the first quarter of 2017, but then the first significant increases started to be seen.

Original story: Eje Prime

Translation: Carmel Drake

CBRE: Real Estate Inv’t Will Exceed €13,000M In 2017

5 October 2017 – Expansión

Real estate investment in Spain is continuing to enjoy happy times, with on-going growth and record-breaking figures.

Between January and September, €10,300 million was spent on real estate assets, up by 58% compared to the same period last year, say sources at the real estate consultancy firm CBRE. Between July and September, the volume of investment moderated with respect to the “extraordinary figures” recorded during the first half of the year, to amount to more than €2,700 million. “This data is very positive and confirms investors’ appetite for the Spanish real estate sector”, said Adolfo Ramírez-Escudero, President of CBRE España.

By type of property, retail assets and hotels are the investment focus, accounting for 26% and 23% of the total, respectively, although all of the assets are experiencing growing interest. “Domestic and international investors are continuing to see Spain as a market with great potential and are showing interest in the full range of asset types”, say sources at CBRE.

In total, the retail sector accounted for €2,700 million of the total investment during the first 9 months of 2017, comprising both shopping centres and high street premises. Meanwhile, operations such as the purchase of Edificio España by the hotel chain RIU for €272 million increased investment in hotel assets during the first nine months of the year, by more than 122% with respect to the same period in 2016, to reach €2,390 million. Another type of asset that saw an exponential increase in its investment was the logistics business, which grew by 153%, to amount to more than €1,500 million. In the case of offices, investment rose by more than 38% to reach €1,542 million, whilst investment in residential assets fell by 32% to €617 million.

Buyer profile

By nationality, overseas investors accounted for 67% of the total volume spent, compared with domestic buyers (22%) and Socimis (10%) – which, although they are Spanish companies, are mostly financed by international capital -. “Last year, Socimis accounted for 43% of real estate investments. Nevertheless, this year, their role has been moderated and they have only participated in 10% of the transacted volume”, explain sources at CBRE.

The replacement of Socimis – which are focusing on managing their portfolios and selling their first non-strategic assets this year – is being led by foreign funds, with new profiles and nationalities closing operations in Spain. Such is the case of the Australian firm Macquarie, which has purchased Empark.

In fact, overseas investment in 2017 has been led by buyers from the Middle East and Asia Pacific, which account for 31% of the total volume of international investment. They are followed by US funds, which account for 18%, and buyers from France, with 17% of the total share, say sources at CBRE. “Overseas investment has increased by 73% with respect to the same period last year, to reach €6,747 million, backed by an increase in investment from most countries, with the exception of the USA and Germany, whose investment volumes have decreased by 36% and 48%, respectively.

Thanks to the good behaviour of the market during the first 9 months of the year, experts predict that 2017 will close with investment of more than €13,000 million, in line with the volumes registered in 2016 and 2015, which were characterised by several large corporate operations.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Catella Accelerates Its Investments In Spain

19 September 2017 – Expansión

Catella Asset Management is stepping on the accelerator in Spain. The Swedish fund manager, which arrived in the country just two years ago and which has already invested €150 million in assets, plans to boost the pace and make purchases amounting to €350 million over the next two years, whereby taking the firm’s total investment volume in the country to €500 million, according to Javier Hortelano, Managing Partner at Catella Asset Management in Iberia.

Until now, the company has undertaken five transactions in the residential rental market – four properties in Madrid and one in Barcelona – and has participated in the purchase of two shopping centres. Specifically, the fund manager has bought the Portal Mediterráneo shopping centre in Vinaroz (Castellón), together with the fund Aberdeen, and the El Manar retail complex in Massalfassar, in the Valencia metropolitan area, with the Belgian investor Mitiska Reim. In both cases, Catella is responsible for managing the assets.

The fund manager, which is listed in Stockholm, has a presence in 12 countries and manages assets worth around €3,400 million in Europe. “Spain is one of the markets that the firm is backing the most. Until now, we have invested €150 million, but the group’s ambitions go beyond that, given that we consider that the Spanish market offers a lot and has great potential”, he adds.

Spain ranks in the group’s Top 5 behind Scandinavia, Germany and France. Hortelano revealed that Catella is already analysing assets and expects some of the operations under consideration to materialise within the next couple of months. Specifically, the manager expects to invest €60 million in the residential sector before the end of the year.

Operations under consideration

In the future, the company will continue investing in the retail and residential sectors, where it is considering entering new locations such as Valencia, Málaga, Sevilla, Alicante, Madrid, Bilbao, San Sebastián and Vitoria, where it is identifying opportunities. “There is an increase in demand, oriented towards leasing. Spain is gaining ground, in line with other European countries, such as Germany and the United Kingdom”, says Eduardo Guardiola, Partner at the firm.

Guardiola believes that Spain suffers from a lack of supply and professional management in the residential rental market, which is adding to greater potential demand.

Moreover, the firm is considering entering other tertiary markets and wants to invest in offices and halls of residence for students. “Catella has a fund that invests in halls of residence for students at the European level. It is a very interesting asset, with lots of potential in Spain”, say the partners.

Both have a long history in the real estate sector. Before joining Catella, Hortelano was a Partner at PwC and previously served as the Director General of Operations at Redevco and was a member of the Dutch multi-national’s Board of Directors. Meanwhile, Guardiola has held positions of responsibility at PwC, Bouygues and Decathlon.


In terms of the real estate market, Catella believes that Spain is consolidating its position as one of the most attractive markets in Europe, but that, after years of rising returns, the sector has entered a new phase in which, in order to create value, you have to invest capex, professionalise the management and improve the rental market. “We have the opportunity to go from being an opportunity country to being a core country with a recurrent volume of investment every year”, say the executives.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hispania Plans To Invest €300M In Hotels In 2017

5 June 2017 – Expansión

The Socimi, managed by Azora and in which George Soros holds a stake, debuted on the stock market in March 2014, with the aim of raising funds with which to buy assets over a three-year period and to improve them.

For the next three years, it planned to focus on managing those assets, with a view to selling them all before March 2020 in order to ensure that its shareholders made profits on their investments

Now, this plan will continue for some of its current portfolio, specifically, for its rental homes (worth around €230 million) and offices (around €520 million), whereas for its hotel assets (more than €1,200 million), “it now makes the most sense for us to change shareholders”, explained the Director General of Hispania and Director of Corporate Development at Azora, Cristina García-Peri.

The idea of selling the assets, making cash and distributing it with a large dividend made sense where we were dealing with diverse assets, but nowadays 70% of Hispania’s portfolio “is worth more together than separate”, she said.

For this reason, the Socimi is going to divest its residential rental assets, homes that it is selling off one by one, and the 25 office buildings that it holds in Madrid and Barcelona.

The gross value of those offices amounts to €520 million although, it is likely that the sales price will be higher because the company has received indicative offers for values that exceed that figure, said García-Peri, who highlighted that these types of assets are still proving to be “very attractive” because rental prices are rising and interest rates are still low.

In terms of its hotels, Hispania, which currently owns 37 establishments, will continue buying new units until the end of the year, given that its shareholders decided that the acquisitions should continue beyond March, the deadline that had been set initially.

“We are looking at block operations as well as certain individual deals”, explained the Director at Hispania, who said that they are continuing to focus on vacation hotels where international clients predominate.

“We have a fantastic portfolio in a very powerful industry, which has a lot of potential to keep growing. It is a product that allows us to diversify”, she added.

García-Peri underlined that, for this reason, bringing about a change of control is now the most “efficient” option for the current shareholders.

The Director said that she doesn’t know whether any of Hispania’s current shareholders will continue with the company beyond 2020. She also discounted the possibility that any hotel group could be interested in buying Hispania’s assets because many of the establishments are managed by operators with lease contracts that span more than ten years.

“We have created an alternative portfolio, with a product that is very well understood”, highlighted García-Peri, who confirmed that Azora will continue investing in hotels, “without a doubt”, both in Spain and overseas, and that it may continue managing Hispania beyond 2020, if the new shareholders so wish.

Currently, Hispania’s major shareholders include Soros Fund Management (16.678%) and FMR (7.589%).

Original story: Expansión

Translation: Carmel Drake

Knight Frank Sees Significant Growth Potential In Spain

30 June 2016 – Expansión

According to Humphrey White, the CEO of Knight Frank in Spain, the country has sufficient structures in place to be able to grow at a good pace over the coming years and to be one of the driving forces in Europe.

Brexit led to a general fall in European stock markets, an increase in the risk premium and the devaluation of the single currency, but since Monday, all of those indicators have been gradually returning to normal.

According to Humphrey White, Spain may benefit from this situation following the Partido Popular’s victory in the general elections, because it has the ideal space for the development of the economy.

The stable outlook for the Spanish economy is based on the following arguments: Spain has some of the best infrastructure in the European Union in terms of ports, airports and railway networks. In addition, unitary labour costs in Spain are amongst the lowest in the EU – which benefits companies wishing to transfer their company headquarters to Madrid or Barcelona.

In this sense, it is also necessary to point out that the real estate market in the Spanish capital is below those of other European capitals, such as Dublin. Furthermore, Madrid has become an indisputed hotbed for companies in the Information Technology and Communication sectors.

Not only that, financing is becoming accessible for individuals and companies once again and there is real movement in the labour market – although there is still a long way to go.

Original story: Expansión (by Alex Lázaro)

Translation: Carmel Drake