BNP Paribas: RE Investment Rose by 8% in 2018 to €11.6bn

9 January 2019 – El Periódico

The volume of annual investment in the Spanish real estate sector amounted to €11.63 billion in 2018, which represented an increase of 8% compared to 2017. If we add the corporate operations with underlying real estate to that volume, then the figure increases to €19 billion, which represents an investment record since the end of the crisis, according to the latest report from BNP Paribas Real Estate in Spain. The report highlights that interest from investors in the Spanish real estate sector in 2018 was at its highest level for a decade.

During the fourth quarter of the year, the volume of direct investment in real estate assets – offices, logistics warehouses, hotels, retail and residential – amounted to €3.7 billion in total, which represented an increase of 58% YoY. The evolution of investor activity, therefore, exceeded the expectations of the sector at the beginning of the year.

“The good times that the fundamentals of the market are enjoying, with occupancy levels at maximums and rents that are stable or expanding in the most consolidated markets, together with the surplus capital and the limited alternatives offered by other financial products, have fostered a frenetic pace of activity in the investment market”, explains the report.

By type of asset, the commercial sector (retail) was the star of the year. The volume invested in commercial assets during 2018 amounted to €4.28 billion, which represents an increase of 23% compared to 2017. During the fourth quarter, investment reached €1.26 billion, and so the sector achieved a quarterly market share of 35%. The largest operation during the final quarter of the year was the purchase of a portfolio of three shopping centres – Max Center, Gran Casa and Valle Real – by Sonae Sierra and Perter Varbacka for €485 million.

Commercial yields

Demand from investors for high street retail assets was high, given that they consider them to be a very stable product. Similarly, there was a high interest in land for the development of retail parks, in light of the scarce supply of this type of asset. The yields continued at 3.00% for prime premises; between 5.00% and 5.25% for prime shopping centres; and at 5.75% for prime retail parks.

In terms of the office market, the investment volume recorded during the fourth quarter was €986 million taking the total figure for the year to €2.228 billion. That represented a slight YoY decrease of 4%. The shortage of products for sale meant that fewer operations materialised in 2018 than in 2017. The prime yield in the office market remained at 3.25% in Madrid and 3.50% in Barcelona.

The logistics market continues to rise. The increase in e-commerce and the strong performance of the consumer sector and the economy, in general, have encouraged investment in this type of asset. The investment volume registered during the fourth quarter of the year amounted to €400 million, whilst the total figure for the year (€1.3 billion) represented a new investment record, and an increase of 30% compared to 2017. The shortage of products, combined with the high investment pressure resulted in a considerable adjustment in yields, which amounted to 5.30% in the prime logistics market in the fourth quarter of 2018.

Investors

Investment funds were the great stars of the market, representing 61% of the total volume transacted in 2018. Socimis have been very present in the investment market, both on the buy and sell sides in the main land transactions to develop new products. Finally, the presence of family offices (private investors) stood out, with acquisitions, in general, for volumes of less than €50 million.

Alternative investments remained in the spotlight of investors, who were mainly attracted by student residences, clinics and nursing homes for the elderly. The cumulative volume invested in those types of assets amounted to €600 million in 2018.

Original story: El Periódico (by Max Jiménez Botías)

Translation: Carmel Drake

Caser Buys an Office Building in Central Madrid

14 December 2018 – Eje Prime

Caser has acquired a prime asset in Madrid. The Spanish insurance company has purchased a building on Calle Velázquez measuring 5,460 m2. The property, which is occupied in its entirety, is home to commercial premises and offices, according to a statement issued by the company.

The property is located at number 94 of the central street in the Spanish capital and its surface area is distributed over the semi-basement floor, the mezzanine floor and six upper floors. The amount of the operation has not been disclosed and the deal has been advised by the consultancy firm Savills Aguirre Newman.

The building, which dates back to 1920, is being incorporated into Caser’s real estate portfolio, which comprises assets located in Madrid as well as in other cities around the country. Of the properties in the Spanish capital, the firm’s headquarters in Las Tablas stand out, as do the assets distributed in strategic locations such as Calle Alcalá, Plaza de la Lealtad and Julián Camarillo, where Eurovision has just leased offices, as revealed today in Eje Prime.

Original story: Eje Prime 

Translation: Carmel Drake

Bankia Relaunches Sale of c/Alcalá 1 With Asking Price of €20M

16 April 2018 – Eje Prime

Bankia can’t make up its mind about c/Alcalá 1, one of its star assets in the centre of Madrid. The Spanish bank has put paid to the first process that it opened at the beginning of the year and is now launching a new round with a minimum sales price of €20 million, according to sources in the sector.

In the previous bid, which several investment funds participated in, the finalists were Arcano and Renta, after both submitted offers amounting to around €18 million, as revealed by Eje Prime.

Despite the offers, Bankia has now decided to seek refuge in a clause that allows it to exit the process if none of the bids proved attractive and has opted to launch a new tender with a higher minimum asking price, whereby taking advantage of the boom in the market.

The asset, which due to its façade would interest restaurant operators more than fashion retailers, has two floors: the first spans 458 m2, whilst the basement measures 405 m2.

The building, constructed in 1880, has a total surface area of 3,209 m2 and has housed the offices of the Community of Madrid’s Ministry of Finance and the Economy. Although it currently houses offices, compatible uses also include a hotel, commercial, administrative, healthcare, education and even residential (…).

Bankia’s other prime assets

In addition to the property on Calle Alcalá, Bankia’s asset portfolio contains a second property located in a prime enclave in the centre of the Catalan capital. That building is the former headquarters of Bankia in Barcelona, located at number 9 Plaza Cataluña. The property has a surface area of 1,000 m2 and has attracted attention from a large number of operators.

Although the objective with the branch in Madrid was to sell it, the strategy with the property in Barcelona is not so clear. According to explanations provided by the entity to Eje Prime, there are several options on the table, including a sale, but also the rental of the building to an operator or even investing in the property to renovate it (…).

Original story: Eje Prime

Translation: Carmel Drake

Renta & Arcano Bid for Bankia’s Former Branch on c/Alcalá (Madrid)

5 April 2018 – Eje Prime

The number of parties interested in one of Bankia’s star commercial assets in Madrid is being whittled down little by little. As Eje Prime revealed, last month, the entity opened an auction for its branch located at number 1 Calle Alcalá. After a period receiving offers, Arcano and Renta have been chosen to participate in the final round. Within the coming days, a decision will be taken as to who will end up acquiring the asset, according to sources close to the auction, who indicate that Arcano is currently best positioned in the race.

According to the same sources, a third group reached the final round but then withdrew due to the value that the asset may reach in the last round of offers. Arcano is one of the best-positioned players given the type of property up for sale; in recent months, it has acquired a handful of other assets with similar characteristics, such as the store at number 202 Calle Bravo Murillo that it purchased from Redevco for €12 million.

The highest offers submitted to Bankia for this latest asset amount to around €18 million, with those presented by Arcano and Renta Corporación proving most attractive to the banking institution (amounting to €18.3 million and €18.2 million, respectively, according to sources close to the operation). The asset, which is likely to interest restaurant operators rather than fashion firms given its (limited window) façade, comprises two floors: the first spans 458 m2, whilst the basement measures 405 m2.

In the event that Renta Corporación’s bid proves successful, something that is unlikely according to market sources, it could be the first move in a larger deal to acquire the whole building. Renta Corporación does not specialise in commercial assets but is an expert in the acquisition of entire buildings for their subsequent renovation. Moreover, the building did go up for sale in 2014.

Indeed, following the success of the sale of several assets, such as those located at numbers 18 and 3 Gran Vía for more than €26 million, and at number 8 Plaza Chamberí for more than €40 million, the Community of Madrid decided to try its luck with this property, located on Calle Alcalá, for which it was asking €10.7 million at the time.

The asset, constructed in 1880, has a total surface area of 3,209 m2 and used to house the offices of the Community of Madrid’s Ministry of Economics and Finance. Although nowadays it is used as offices, and its compatible uses include hotel, commercial, administrative, healthcare, education and even residential. Nevertheless, the Community of Madrid pulled out in the end and did not end up selling the building.

Bankia’s other prime assets

In addition to the premises on Calle Alcalá, Bankia’s portfolio of assets contains a second branch located in a prime enclave in the Catalan capital. It is the former headquarters of Bankia in Barcelona, located at number 9 Plaza Cataluña. That property has a surface area of 1,000 m2 and has received attention from a large number of operators.

Sources are Bankia have explained to Eje Prime that whilst the aim with the branch in Madrid was to sell it, the plans for the property in the Catalan capital are not as clear. According to the entity, it is considering several options, including a sale, but it may also lease the property to an operator and even invest in generating value from the asset by undertaking a renovation (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

IBA Capital & CBRE GI Sell Preciados 9 to Generali

15 March 2018 – Eje Prime

A new prime retail operation has been closed in the capital. The fund manager IBA Capital, together with CBRE Global Investment, has closed the sale of number 9 Calle Preciados in Madrid to the real estate vehicle of the insurance company Generali, Generali Real Estate. The Italian group has paid €100 million for the asset, which is going to be home to the future Pull&Bear store on that street, one of the most expensive in Spain for opening a store.

The property, which has a surface area of more than 3,000 m2, was the first building that El Corte Inglés sold in the Spanish capital and fired the starting gun for the policy of real estate divestments by the distribution group.

The asset, located in the so-called Golden Triangle of Madrid, was built in the 1940s. The building overlooks the confluence of the areas of Sol, Preciados and Gran Vía, and has a commercial surface area of more than 2,100 m2, distributed over six floors.

The operation, which has been brokered by the real estate consultancy Colliers, has been in the pipeline for six months, but the parties have not signed the agreement until now. In this way, IBA Capital is continuing to transform its asset portfolio in Spain.

Founded in 2013, IBA Capital is headed by Thierry Julienne and Jesús Valderrama, founders of the investment vehicle. The group has the capacity to manage all kinds of real estate assets and, currently, manages assets with a value of approximately €1 billion.

IBA Capital’s activity is divided into three lines of business. The company is continuing to acquire new assets following a phase of “prior selection of opportunities and a process of internal analysis”, according to sources at the company. IBA Capital also manages and sells assets, as well as controls the Socimi Zambal.

Its current portfolio comprises more than a dozen assets situated in prime locations of Madrid and Barcelona for the most part. They include number 18 Gran Vía and the ABC Serrano shopping centre, which have been acquired for their subsequent renovation and enhancement.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Lladó Family Buys Office Building in Madrid from Axiare for €30M

22 December 2017 – Eje Prime

Axiare is ending the year by starting a new divestment phase and the Lladó family is growing its portfolio of assets. José Lladó, President and majority shareholder of Técnicas Reunidas, is exercising his real estate leg with the purchase of a building on Calle Fernando el Santo, owned by the Socimi Axiare, for €30 million. The asset will become the new headquarters of the European investment fund Eurofund Capital Partners.

The Socimi has begun its divestment phase and has decided to get rid of its Fernando el Santo property, a prime building located in the centre of Madrid, for which it will receive proceeds of €30 million.

The property, measuring 3,254 m2 spread over six floors, is located at number 15 Calle Fernando el Santo.  It has 42 underground parking spaces and currently houses the headquarters of the Argentinian embassy and consulate in Spain. It is adjacent to the current residence of the Argentinian ambassador.

The Socimi has obtained a return of 82% from this asset in just three years, after having purchased the property in 2014 for €16.5 million. Moreover, the building’s rent has risen by 43% during the three years that the company has managed it.

The new owner of the building is the Lladó family, which in recent months has opted to acquired assets located in prime areas where the value of those assets may exceed their prices over the coming years. Before acquiring this property from Axiare, the company purchased another building from the Socimi Hispania, which will house the future headquarters of the law firm Uría y Menéndez for €29 million.

In recent years, the owner of Técnicas Reunidas has also purchased a building at number 2 Marqués de la Ensenada, located just a stone’s throw from Plaza Colón in Madrid, for €6 million. In July 2014, the family office also purchased a building from Vía Célere at number 15 Paseo de Recoletos, for almost €20 million. The Lladó family also owns the property at number 33 on the same street.

Axiare starts divesting at the height of its takeover bid

The Socimi Axiare, which on the offensive, after Colonial launched a takeover bid to take control of the Socimi, is beginning a new divestment phase with the sale of this asset.

Axiare’s portfolio appeals to Colonial because it mainly comprises offices (74%), but also contains other types of assets, such as commercial premises, which account for 9% of the total, and logistics assets, which represent 18% of the total. The Socimi is led by Luis Alfonso López de Herrera-Oria.

The main assets of Axiare, whose tenants include companies such as eBay, Cuatrecasas, Konecta, McKinsey&Company and Alantra amongst its clients, are its office buildings on Calle Sagasta in Madrid, measuring 7,054 m2; on Calle Velázquez, measuring 16,816 m2; and on Calle Manuel de Falla, measuring 6,252 m2.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake