Telefónica to Close & Sell Off 650 Telephone Exchanges between 2018 & 2020

16 March 2018 – Cinco Días

Telefónica is continuing its intense level of activity in the management and disposal of its assets (…). In this way, the telco has recorded an impact on Operating Income Before Depreciation and Amortisation (OIBDA) of gains from the sale properties in Spain of almost €180 million over the last three years. This maximisation in the value of these assets has generated a positive impact on the profitability of the company during a period marked by strong competitive pressure. In other words, these sales have helped to improve the results on firm’s income statement.

According to the company, in the accounts for the last three years, the impact of gains from the sale of properties in Spain exceeded €35 million in 2017 (…), €71 million in 2016 and €73 million in 2015.

In recent times, Telefónica has focused a large part of its real estate activity on adapting its infrastructure to the real needs of the business. In this sense, the most recent drive has been motivated by the process to shut down copper exchanges, accelerated by the migration of clients from that traditional technology to new fibre optic networks, which the company has rolled out right across Spain. With this change, those facilities are no longer necessary for the operations.

And this process is going to continue to the extent that more copper exchanges are closed, in accordance with the company’s plans. Thus, the operation may accelerate the sale of these facilities, which in many cases are located in important buildings in central areas of provincial capitals and other cities.

Overall, Telefónica plans to close 650 copper exchanges in total right across Spain between 2018 and 2020, as part of its program to modernise its infrastructure and shut down the ageing networks, according to explanations provided by the group at the recent presentation of its results for 2017.

For example, the telco has put up for sale the exchange that it owns in Gijón, in the heart of the shopping district of the Asturian city, for a price that could reach €12 million, according to reports in the local press.

In any case, its sales in recent times have affected different types of buildings. According to sources in the sector, in recent years, Telefónica has sold iconic buildings in cities such as Madrid, Barcelona, Valencia, Bilbao, Santander, Tarragona and Zaragoza.

Sources in the sector also indicate that the gains (from future sales) may be high given that in many cases the buildings are old, and were acquired or constructed by the company a long time ago.

Amongst other movements in the real estate segment, in 2016, the operator sold several buildings in Madrid, Barcelona, Santander and Zaragoza to Beach Bienes Inmuebles for almost €50 million.

In turn, at the beginning of 2017, Telefónica sold a building in the Argüelles neighbourhood of Madrid to the British real estate group Princeton Investments for almost €25 million (…).

Original story: Cinco Días (by Santiago Millán Alonso)

Translation: Carmel Drake

Telefónica Sells A Building In Madrid To Princeton For €25M

16 January 2016 – El Economista

Telefónica has sold a building with a surface area of 9,700 m2 located in the Argüelles neighbourhood of Madrid to the British real estate group Princeton Investments for around €25 million.

According to the British group, the operation, which was announced by Princeton Investments, represents a decisive step in its expansion strategy in Spain.

The real estate company highlighted that the building is in an “excellent location” for the development of luxury housing.

According to sources in the real estate sector, the price paid for the property amounts to around €25 million.

The building, a unique asset located on Calle Irún, next to Parque del Oeste, has a garden and a roof top pool with views over the Royal Palace and the Templo de Debod.

In addition, it has 350 parking spaces, a gym and common recreation rooms.

According to Princeton, the operation consolidates its investment position in Spain, a market in which it has already made several purchases.

In 2015, the British group acquired a building with a surface area of 10,600 m2 on La Cuesta de Santo Domingo, close to Gran Vía, also from Telefónica, for its subsequent rental.

In March 2016, Princeton bought a building with a surface area of 4,000 m2 next to the Google Campus in Madrid from Gas Natural to open a co-working centre.

That property, which is being renovated, has been leased to Regus and will be inaugurated in Q2 2017.

In parallel, the British group plans to launch a student hall of residence project in Valencia in a building that has a surface area of 10,160 m2.

Princeton is keen to replicate this model in other major university cities across Spain, including in Madrid and Barcelona.

Original story: El Economista

Translation: Carmel Drake