JLL: Prime Retail Rents Grew During Q1 2019

23 April 2019 – Eje Prime

The rental prices of prime premises are growing in Spain. In 2018, the rental prices of retail parks rose by 5.4%, whilst high street rents increased by 5% and shopping centre rents by 2.6%.

According to a study by JLL, the growth in the rents of prime premises in Spain is forecast to be amongst the highest in Europe over the next five years, albeit more moderate than in previous years.

Investment in retail assets amounted to €208 million during Q1 2019, with Corpfin’s acquisition of the retail space in Edificio España (Madrid) accounting for the lion’s share (€160 million). Yields remained stable during the quarter.

Original story: Eje Prime

Translation/Summary: Carmel Drake

TH Real Estate Changes its Focus in Spain to Purchase Logistics Properties, Offices & Alternative Assets

11 June 2018 – Eje Prime

After ten years in Spain, TH Real Estate is changing its focus in terms of acquisitions. The company, which has historically purchased retail assets in the country, is going to change strategy to strengthen its portfolio with logistics properties, office buildings and alternative assets, such as halls of residence for students. That is according to Marta Cladera (pictured below), Director General of TH Real Estate Iberia, talking to Eje Prime in an interview.

“Traditionally, and due to the type of active funds, we have been very focused on the purchase of retail products” – said Cladera – “Now, we want to nurture our portfolio with logistics buildings, offices and alternative assets, such as halls of residence”. “We are analysing the market, we have a good track record in other types of assets, and so we will be able to create a portfolio with new types of assets and we will begin this year”, she added.

TH Real Estate will carry out these purchases through its fund European City Fund, which is one of the most active at the moment in terms of acquisitions and which has sufficient resources to undertake new purchases. By type of asset, the plans in terms of alternative assets involve not only the purchase of properties but also “teaming up with other operators, which may be from other parts of Europe”. In this way, TH Real Estate will follow in the footsteps of other funds such as CBRE GI and Axa, which, in their strategy to enter the hall of residence business, purchased Resa, the largest student hall company in Continental Europe.

In terms of the office sector, Cladera assures that “the competition is fierce” and the supply “is scarce”. “We are looking for buildings costing upwards of €50 million, but the supply that we are finding is not prime and those that are prime due to their location need a lot of renovation work, and that is something that holds us back, given that the numbers have to make sense for us to proceed and we have to focus on returns”, said the director.

Currently, TH Real Estate manages a portfolio worth €103 billion around the world, although Spain represents a small proportion of that, accounting for just 2% of its total business. In the Spanish market, the company owns assets worth €2 billion. “Although it is small compared to other markets, you have to look at the evolution: when we arrived in 2007, the portfolio was worth €200 million, as such, the growth over the last ten years has been significant”, she said. TH Real Estate’s team in Spain comprises nine people.

Socimi: under consideration 

Although this move is still in an embryonic phase, TH Real Estate does not rule out joining the Socimi party that is raging in Spain with some of its assets (…).

Currently, TH Real Estate owns fifteen assets across the Iberian Peninsula, of which fourteen are located in Spain and one in Portugal. Of those, two are logistics assets (acquired in 2017), and the rest are retail properties. One of the formulae that the group has used in the country has been to create joint ventures with different players for the acquisition of assets. Such was the case of the purchase of 50% of Xanadú from Intu for €264.4 million, for example (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Office Inv’t in Madrid & Barcelona Rose by 70% in YTD Sept

27 November 2017 – Eje Prime

Madrid and Barcelona are continuing to take advantage of the boom in the office market. The sector, which accounts for 28% of all (tertiary) real estate investments in Spain, has its national breeding ground in the country’s two largest cities. During the nine months until September, the leasing of office space increased by 70% with respect to the same period in 2016, pushing up rental prices and also, reducing the available stock to a minimum. The forecasts indicate that the sector will close 2017 with a total of 780,000 m2 of space leased in Madrid and Barcelona alone: 460,000 m2 in the Spanish capital and 320,000 m2 in the Mediterranean city.

The leasing of office space grew by 21% in the third quarter in Madrid, where the leasing of workspace exceeded the 100,000 m2 threshold during the quarter to reach 102,000 m2. This increase is stimulating the sector, which by year-end may equal the total space leased in 2016 (450,000 m2).

In the Spanish capital, the central business district (CBD) continues to be the location of choice for companies, with an occupancy rate that accounts for 50% of the whole city. Between June and September, 73 operations were signed in Madrid, in other words, fewer than the 90 contracts that were signed during the same quarter last year, according to a report compiled by the consultancy firm Cushman & Wakefield.

In Barcelona, by contrast, the leasing of office space decreased by 56% during the third quarter (…) to 56,700 m2. On the other hand, of the 291 operations closed between June and September in the city, only 6% exceeded 2,000 m2; instead, contracts for spaces measuring less than 500 m2 predominated (61%), resulting in an average leased surface area of 900 m2. Similarly, in the Catalan capital, where the cumulative absorption has increased by 12% in 2017 compared to 2016, technological companies are the most active, accounting for 39% of the office space rented in the Mediterranean city, ahead of the industrial sector (11%).

The 22@ district, an area of constant growth, is home to 46% of the offices of companies headquartered in Barcelona. The rest are located in the centre (36%) and on the outskirts, where 18% of companies are situated.

Two of the largest operations carried out in Spain in the last quarter in this tertiary sector featured WeWork, one of the main players in the coworking segment. The US company leased 6,500 m2 of surface area in the Luxa building in the 22@ district of Barcelona and another 5,500 m2 of space at number 43 on Madrid’s Paseo de la Castellana.

90% occupancy rates

One of the challenges for the office sector in 2018 is going to be increasing its stock. Currently, the availability of space in Madrid and Barcelona is at minimum levels. In the Spanish capital, the supply of workspace has decreased to 12% of the total land constructed for that purpose, whilst in Barcelona, the figure is even lower, at 8%.

To this end, the plan for next year is to incorporate 139,000 m2 of new stock in the Catalan city and 80,000 m2 of space in Madrid. This lack of space has driven up rents, which are currently priced at €32/m2/month in the prime areas of the Spanish capital and €22.75/m2/month in Barcelona.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Miu Miu Moves Into Store On C/Serrano 54

20 October 2017 – Eje Prime

Change of tenants on Madrid’s most luxurious street. The luxury firm Miu Miu, owned by the Prada group, is finalising the opening of a new establishment on Calle Serrano, a store that was occupied until now by the historical shoe shop Lurueña.

Prada will thus become the tenant of the Lurueña family, which owns the property. The establishment, measuring more than 250 m2 over two floors, is located at number 54 Calle Serrano. According to sources in the sector, the operation has been brokered by Cushman & Wakefield.

As well as the chain of shoe shops and the management of its premises (many of which it owns outright), the Lurueña family also operates another business line, franchising restaurants. Until 2006, Lurca, a company owned by the Lurueña family, was the second largest franchisee in Spain of the chain Burger King. One branch of the family is still linked to the restaurant sector as franchisees of the 100 Montaditos breweries and the pizza chain Papizza.

The family’s decision to generate returns from its premises by leasing them out instead of operating them commercially is not unique. In Barcelona, the owners of the also historical Mercería Santa Ana (haberdashery) have done the same thing in Portal de l’Àngel in Barcelona, the most expensive street in Spain for opening a store. The owners have moved their business to a neighbouring street and have leased the premises to Oysho, Inditex’s underwear chain.

Until now, Miu Miu operated in the Salamanca neighbourhood in a smaller store at number 72 Claudio Coello. Meanwhile, Prada has its flagship store on Calle Serrano, at number 25.

So far in 2017, the luxury thoroughfare in the capital has seen numerous changes of tenants. At the beginning of the year, the jewellery firm Carrera and Carrera launched a flagship store at number 27, measuring 150 m2.

In recent months, it has been joined on Calle Serrano by two other luxury firms: Salvatore Ferragamo, which took over from Lladró at number 68 and Kenzo, which chose number 17 to open its first establishment in Madrid.

Original story: Eje Prime (by I. P. Gestal and C. Pareja)

Translation: Carmel Drake

Inv’t In Retail Assets Exceeds €1,800M In YTD16

8 September 2016 – Expansión

So far this year, transactions amounting to more than €1,800 million have been completed (in the retail sector). Moreover, the development market is expected to be reactivated.

After years of low and moderate activity in the retail sector, the exit from the crisis represented a turning point and the last two years have been particularly intense in terms of investment in shopping centres and retail parks. In addition, experts forecast that sales growth will continue during 2016, along with the development of new projects.

In this way, whilst investment in the office segment has moderated during 2016, following the significant activity that was registered there last year, activity continues a pace in the shopping centre sector and, records are being broken, such as, for example, with the sale of Diagonal Mar (Barcelona) for €493 million in August.

Growth in income

Thus, during the first eight months of the year, investments amounting to more than €1,800 million have been made. The big four have strengthened their position as advisors to these types of operations. For example, Deloitte was the buy-side advisor in the Diagonal Mar deal, whilst CBRE advised on the sell-side.

Growth in the economy, as well as an improvement in consumption have represented a wake-up call for shopping centres and, in 2016, sales are expected to grow and the promotion of new projects is expected to be reactivated. Moreover, given that sales are growing at a faster rate than the volume of visitors to shopping centres, the ratio of spend per visitor is also improving. Thus, as a result of the good results and the demand for premises, rents in prime shopping centres increased in 2015 for the first time since the outbreak of the crisis, by between 5% and 10% on average, according to a report from CBRE.

Last year, investment in shopping centres and retail parks exceeded all expectations, with a total volume of €2,650 million. In terms of the profile of investors, the Socimis were the major players, with Merlin and Lar leading the charge, along with fund managers.

According to CBRE, although the economic and political uncertainty is concerning buyers, it has not affected investment activity in retail assets. The consultancy firm estimates that 2016 could end with a total investment volume of €2,000 million in the shopping centre sector.

“Opportunistic funds that invested between 2012 and 2014 are busy divesting in 2016, having reached their target returns much sooner than expected. Institutional investors, which have a much lower cost of capital, are now taking over the reins, now that the yield offered by shopping centres in the rest of Europe is lower than in Spain, despite the fact that the evolution of the consumer environment is less favourable than in our country. We have never before enjoyed such a favourable environment for completing transactions in Spain”, explained Javier García-Mateo, Partner in Financial Advisory at Deloitte.

For José Manuel Llovet, the Director of Retail in Spain at Lar, shopping centres have great potential. “Sales are increasing along with consumption, which means that shopping centres are managing to achieve much higher rent increases than offices, which have not ended up experiencing the improvements that were expected at the beginning of the recovery”, explained Llovet.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

The Resurgence Of Spain’s RE Market: Who’s Who?

11 July 2016 – Expansión

Spain’s real estate companies are making a name for themselves on the European map, particularly thanks tothe merger of Merlin and Metrovacesa. The Socimis and funds are also boosting the sector and are throwing themselves into the tertiary business. (…).

Following its merger with Metrovacesa, Merlin now owns assets with a gross value (GAV) of €9,317 million and a net value of €4,927 million. This portfolio of assets have catapulted it into the top ten ranking of the largest listed Socimis in Europe, all of which have a GAV of more than €9,000 million. The largest three are Unibail Rodamco (€37,800 million) Klepierre (€22,100 million) and Land Securities (€18,700 million). Merlin is ranked eighth. Unlike its European counterparts – who are much more specialised but who have a presence in more countries – Merlin is focusing its activity in Spain, although it does own some assets in Portugal and has a more diversified portfolio.


The operation between Merlin and Metrovacesa “is a clear sign of the professionalization of the sector”, according to Humphrey White, CEO of the consultancy firm Knight Frank (…).

Other, smaller Socimis are also competing in the race to grow in size, such as Axiare, Hispania Real and Lar España, which have also gained prominence in the sector. A tier below, we find other Socimis such as Cuatro, Promorent and Mercal Inmuebles, which are listed on the specialist MAB market.

Other Socimis

“One of the first effects of this merger is that the other Socimis are going to have to following the path adopted by Merlin and carry out operations of this kind, so as to place themselves at the same level in the market”, says Borja Ortega, Director of Capital Markets at JLL.

Compared with Merlin, the other Socimis in Spain are much smaller in terms of asset values. Specifically, Hispania, with GAV of €1,500 million; Lar, with €1,050 million; and Axiare with around €900 million, are above or near the threshold of €1,000 million, but light years away from the €9,300 million held by the newly merged Merlin. The large players in the capital markets, such as Blackstone and Fidelity, are demanding liquidity (in terms of share trading) from the listed companies to invest in their share capital. (…).

In this way, the Socimis are facing up to companies with a long history in the real estate sector, such as Colonial, which specialises in prime offices in Barcelona, Madrid and Paris, with assets worth almost €7,000 milion. Colonial, chaired by Juan José Brugera, is currently evaluating the possibility of investing in other European cities, particularly offices in prime locations. The company, one of the real estate companies that survived the burst of the bubble, has just approved the distribution of its first dividend since 2008. It has also launched an investment plan whereby it will allocate €400 million to the acquisition of real estate assets and undertake a €265 million capital increase.

In addition to the Socimis, another major player that has burst onto the new property map with a vengeance is Pontegadea, the investment arm of the founder of the textile empire Inditex, Amancio Ortega.


Pontegadea’s assets, worth more than €6,000 million, are located across a dozen countries in Europe, America and Asia. The company invests in buildings where some of its Zara mega-stores are opening in major cities, such as New York, Boston and Milan. In addition, it has purchased unique office buildings in prime areas such as Torre Picasso in Madrid, considered its largest single investment to date (€400 million). It also owns hotels, such as the one it has just purchased in New York for €68 million from the fund KHP Capital Partners. (…).

Original story: Expansión (by G.Martínez and R.Arroyo)

Translation: Carmel Drake

Blackstone, Cerberus, Arcano & Others Head To The Beach…

30 May 2016 – El Confidencial

(…). Just over a year and a half ago, the large real estate investment funds were concentrating their activity in Spain’s two large (regional) capital cities (namely, Madrid and Barcelona). Nevertheless, the saturation of operations and a gradual increase in prices (there is no sign of a bubble in either city, but there are increasingly fewer bargains to be had) has forced investors to explore new locations, in cities that are one step down in terms of size and population, but where there is significant latent demand, and above all, very attractive prices for operations with payback periods of five or seven years. Valencia and the Valencian Coast are in the spotlight, according to sources from an important real estate consultancy firm headquartered in the city, which has participated in some of the largest transactions completed in recent months.

Blackstone, Cerberus, and even the Real Estate division of managers such as Arcano, have been exploring and closing operations in the Valencian market for more than 12 months now, primarily acquiring debt portfolios secured by well-located residential properties and focusing on upper-middle class segments of the population with a certain amount of liquidity and the capacity to borrow. The assets acquired include not only finished promotions, but also urban land, such as the case of a group of plots located in Nou Campanar, which Sareb has just sold to the US fund Castlelake. The land used to be owned by Juan Armiñana, one of the local property developers who made his fortune during the real estate bubble and was destroyed following the crash, leaving behind a small empire of bankrupt companies and millions of euros of debt from the banks.

The presence of a fund like Castlelake in this type of operation is striking because two years ago, no-one would have imagined such a fund exploring operations beyond Madrid or Barcelona. Last year, Sareb sold it 76,000 sqm of residential land in the Madrilenian town of Boadilla del Monte for around €13 million. In the cae of Nou Campanar, the consideration has been lower, given that the plot of land measures just 12,000 sqm and has a buildability of 40,000 sqm.

The funds are exploring “prime” areas of the city of Valencia, both in the centre and along the seafront, as well as along the Patacona beach area, where there is still some undeveloped land and several developments for sale, in the hands of financial institutions. In the same way, local investors, such as the Zriser Group (Pablo Serratosa) are looking to launch a residential development in the vicinity of the Ciudad de las Artes y las Ciencias. (…).

Five year payback periods and returns of 20%

The logic behind these investments tends to have a common element – payback periods of just over five years with average returns of 20%. These deals are conceived from a purely financial point of view, but they include agreements with construction companies when they involve land development and sales plans. (…).

Original story: El Confidencial (by Víctor Romero)

Translation: Carmel Drake

Socimi Fever Shakes Up The Stock Market

28 September 2015 – El Economista

After a flurry of activity during 2015, Spain now has 14 listed Socimis, of which 10 trade on the MAB. And this figure is expected to continue to grow over the coming months.

Last week, two Socimis went public on the Alternative Investment Market (‘Mercado Alternativo Bursátil’ or MAB). The first, Autonomy Spain, debuted with an increase of 1.52%, to €16.75.

Autonomy is the parent company of a group that currently comprises two sub-Socimis. The group’s real estate portfolio contains six office buildings – five located in the Community of Madrid and one in Cataluña.

A day later, it was the turn of the Socimi Corpfin Capital Prime Retail II, which became the tenth real estate investment company to go public on the MAB.

The company, which has already invested €75 million in retail premises in “prime” areas of Madrid, San Sebastián, Burgos and Vitoria, expects to invest a further €35 million before November 2016, whereby taking its total investment to €110 million.

This is the first Socimi that the private equity firm Corpfin Capital has listed publicly. The firm also has plans to list another Socimi, Corpfin Capital III, through which it holds joint investments in 8 real estate assets.

The week before, Zaragoza Properties, which owns a stake in the Puerto Venecia Shopping Resort shopping centre in Zaragoza, debuted on the MAB.

Also this year, the Socimi Obsido entered the market for small companies. Its growth plans involve the purchase of hotels in Spain’s principal tourist destinations.

In addition, Trajano Iberia debuted on the stock market (in July). It is managed and promoted by a division of Deutsche Bank, and focuses on “semi prime” offices in Madrid and Barcelona; “prime” offices in secondary cities, shopping centres, and logistics assets.

Also in July, Mercal went public with a portfolio of assets in strategic locations in Spain. Four months before that Uro Property Holding, which owns one third of Santander’s bank branches, began trading on the MAB with a valuation of €259.7 million.

The Socimis Entrecampos, Fidere and Promorent also trade on the MAB, but the largest Socimis, namely Merlin Properties, Hispania, Lar España Real Estate and Axiare, all trade on the main stock exchange. Between them, they had purchased assets amounting to more than €3,100 million as at the middle of August, strengthened by the funds raised through their respective capital increases.

Even Acciona is evaluating the possibility of creating a Socimi for its real estate assets, and this Monday, the General Shareholders’ Meeting of Testa is expected to approve the conversion of the company into a Socimi after it was acquired by Merlin.

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

Investment In Shopping Centres Exceeds €1,000M In H1 2015

1 July 2015 – El Confidencial

During the first three months of 2015, investment in shopping centres tripled to €520 million, compared with the €150 million recorded during the first quarter last year. In fact, in barely three months, the figures exceeded the sum of those recorded between 2010 and 2013. As such, the sector will close the first half of the year with total investment of just over €1,000 million and will reach €3,000 million within 19 months.

Those are the forecasts made by the consultancy Knight Frank, which expects that 2015 will close above the historical average, but that the investment volumes seen last year will not be repeated.

“Whilst 2014 and 2015 so far have been characterised by investment in prime shopping centres, of considerable size, the next few months will see investment opportunities involving smaller, core plus and value add products, in secondary cities”, says Elaine Beachill, Capital Markets Manager at Knight Frank. “Over the last 18 months, activity has focused on the best streets and areas of Madrid and Barcelona, but from now on, we will see transactions right across the country”.

In terms of the performance of shopping centres, Knight Frank highlights the strong results of smaller local centres, located in urban areas and secondary cities with a significant area of influence. The segment least affected by the crisis has been the prime High Street. Rents in retail stores on the main streets have remained stable and they have experienced low vacancy rates. “In fact, there is a significant shortage of space on the prime High Street and when a store becomes available, it is leased out very quickly”, says Félix Chamizo.

Nevertheless, established secondary sites – traditionally in less demand – have been the first choice for certain foreign brands setting up in Spain for the first time. That is the case of Hema, Dealz, Tiger and the Chinese retailers Mulaya and Okeysi. There is growing interest from retailers and investors in the area around la Puerta del Sol. Projects in the surrounding area, such as Canalejas, indicate a possible increase in rents in the area and certain retailers are already taking up position.

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake