RE Inv’t Reached €1,977M In Barcelona In 2015

16 January 2016 – El País

Real estate investment reached record figures in Barcelona last year. It amounted to €1,977 million in total, up by 43% compared with 2014, and exceeding even the levels seen before the crisis. The recovery in the office market primarily drove the trend, although there was also another important factor: overseas investment. According to a report by Aguirre Newman, foreign buyers accounted for 55% of all investments, and that percentage increases to 85% if we consider the Socimis’ shareholders. The remaining capital is local.

Investors’ need to seek reasonable rates of return explains their interest in Barcelona, according to the CEO of Aguirre Newman in Barcelona, Anna Gener. In her opinion, neither the sovereign process being undertaken by the Generalitat or the hotel moratorium imposed by Barcelona’s Town Hall have scared off investors, and her views are supported by the figures. The Catalan capital has continued to attract the same rate of investment as the rest of Spain, which amounted to €10,790 million in 2015, another historic record.

“Investment has grown a lot, given that the must talked about exodus of businesses did not happen”, explained Gener yesterday, who added that real estate advisors are more concerned about finding available supply for potential institutional investors, who have traditionally ben conservative when it comes to investing. She said the same thing applied in the case of hotels, which in Barcelona accounted for investment amounting to €347.5 million, despite the decision by the Barcelona en Comú Government to block new openings. “Hotels in Barcelona are so profitable that everyone wants hotels and the moratorium removes competitors from the sector”, said Gener, who predicted that the price of hotel licences will increase as a direct result of the Government’s measure.

The office market is still the most active segment, after achieving a rental volume of 400,000 m2 and total investment of €885 million, up by 52% compared with a year earlier. Aguirre Newman thinks that the major problem is the scarcity of supply in premium areas, which is putting upwards pressure on prices. Its major client this year has been la Generalitat, with the operation to concentrate offices from different departments in the Zona Franca, in one of the large facilities measuring 46,000 m2. There is no availability in the city centre for offices measuring more than 1,500 m2.

Another sector that is rising from the ashes is residential, with growth of 43% and an average price rise of 8% last year. The consultancy firm predicts an increase in the number of projects involving renovations and changes in use to luxury residential, with international buyers dominating the segment. In these high-end cases, Aguirre Newman forecast that prices may even reach €10,000/m2.

The forecast for this year is that investment across the whole real estate sector (in Barcelona) will amount to €2,000 million once again.

Original story: El País (by Dani Cordero)

Translation: Carmel Drake

RE Investment Amounted To €8,500M In H1 2015

5 August 2015 – Cinco Días

The real estate market has been particularly active in H1 2015, as the new cycle of economic recovery gets underway. That was the main finding from the data published on Monday by the Association of Real Estate Consultants (‘Asociación de Consultoras Inmobiliarias’ or ACI), an organisation created in 2013 by the leading consultants in the sector.

If we exclude investment in housing, the volume of transactions amounted to €8,500 million during the first half of this year, whereas the figure reached just €3,500 million during H1 2014. As such, more than 2.4x as much money has been invested in Spain so far this year compared with the same period last year.

“The real estate market in Spain is showing strong signs of recovery, however we are seeing variations by asset, location and geography”, said Ricardo Martí-Fluxá, President of the ACI. “If we also consider that the fundamentals of the economy are indicating a clear, stable and sustainable upwards trend, then we can say that now is a great time for investors to acquire assets”, adds this career diplomat, who was the Secretary of State for Security in President José María Aznar’s first Government (PP).

“By type of investor, the Socimis and investment funds have been the most active purchasers, followed by private investors and property developers, amongst others”, according to a statement from the association. During H1 2015, 49% of all purchases were made by Socimis, followed by specialist investment funds (23%) and private investors (13%).

In fact, the Socimi Merlin Properties closed the largest transaction when it acquired Testa for €1,793 million, although the operation will be completed in several stages between now and 2016, when the Socimi will eventually acquire 100% of Sacyr’s former real estate company. Since the first Socimis debuted on the stock exchange just over a year ago, they have become key players in driving the recovery of the RE market.

Another one of these large firms is Hispania (in which the investor George Soros holds a stake), which invested €670 million between March last year and June this year. Meanwhile, Axiare has assets amounting to €571 million and Lar España has a target investment total of between €750 million and €850 million, which it plans to achieve during the coming months.

Original story: Cinco Días (by A. Simón)

Translation: Carmel Drake

CBRE: RE Investment Grows By 51% To €5,264M In H1 2015

6 July 2015 – Expansión

Five star hotels, commercial premises on the country’s most iconic streets, large shopping centres and office buildings. All of these assets have changed hands in recent months in the Spanish real estate market, which has been extremely active in recent months.

Between January and June, real estate investment (which includes offices, shopping centres and retail premises, logistics warehouses, hotels and residential assets) amounted to €5,264 million, according to the consultancy CBRE. That figure soars to €8,434 million if we include the purchase of the real estate company Testa by the Socimi Merlin Properties.

The amount represents an increase of 51% compared with the first half of 2014, a figure that itself represented a two-fold increase with respect the previous year. Thus, total investment during the first half of the year increased from €697 million in 2012 to €1,455 million in 2013, to €3,475 million last year and to more than €5,200 million in 2015, according to CBRE. (…).

By quarter, the volume invested in the second quarter (from April to June) was slightly lower than during the first quarter: €2,337 million compared with €2,928 million. “The decrease in the second quarter was due to the fact that some transactions were delayed and also because some very large deals were closed during the first quarter, including Gran Vía 32 and Plenilunio”, explains Paloma Relinque, Investment Director at CBRE.

By asset type, offices and retail assets (both large shopping centres, as well as shops on the main streets of Madrid and Barcelona) have featured in the largest deals. In the case of offices, highlights include the sale of Ahorro Corporación and Sareb’s headquarters on Castellana 89 (Madrid) to the March family for €147 million. In terms of retail premises, in April, the insurance company Axa paid €308 million to the Socimi Uro Property for 400 Banco Santander branches.

There have also been important transactions in the hotel sector, including the sale of the Hotel Ritz, which was transferred for €130 million. (…).

Types of investors

Although the investment growth trend seen in 2014 was repeated during the first half of 2015, there was a change in the mix of investors by nationality. Whilst at the beginning of last year, the more opportunistic US funds accounted for 53% of transactions, compared with British and German funds, which accounted for 5% and 1% of deal respectively; during the first half of 2015, US funds accounted for just 21% of total volumes, whilst investors from the UK accounted for 22% of deals, followed by Canadian funds (9%) and German funds (6%), according to CBRE.

Moreover, the Socimis Lar España, Merlin Properties, Hispania and Axiare are still the major players in the market for real estate investment. “The Socimis are performing very well, which is great for the sector because they purchase office buildings, for example, to refurbish them and add value, which improves the real estate stock”, says Lola Martínez, Director of Analysis and Investment Strategies at CBRE.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Deutsche Will Invest €200M In 2015 Through Its RE Fund

1 June 2015 – Expansión

Following the arrival of the first investors, which had a more opportunistic profile, the Spanish real estate market is now starting to show the first signs of stability, with the arrival of more conservative investors. That is the case of the German institutional funds, which manage the savings of wealthy investors and insurance companies in the European country.

These German funds include Ara (Alternative and Real Assets), which is the real estate division of Deutsche Bank. “There is a clear commitment to the recovery of the Spanish real estate sector. In 2014, investment in the non-residential sector amounted to €8,000 million, but we should remember that at the peak of the boom, that volume amounted to €11,000 million. We believe that there are still a lot of good products that have not yet come onto the market”, explains Carlos Manzano, head of Real Estate España at Deutsche Asset & Wealth Management.

For this year, Ara has set a target of investing around €200 million in property in Spain. “We have the capacity to invest twice as much as we (currently) hold (in the portfolio)”, he says.

Change of course

The former Reef has focused its activity in recent years on managing its portfolio, which has included a few divestments. “Pre-2006, we made a lot of investments but then we stopped investing due to the crisis and focused on managing. Now the market has changed and we believe that there is still a lot of good property that has yet to come onto the market”, he explains.

One of their recent major transactions included the purchase of a batch of 1,350 branches from BBVA in the summer of 2009. Those properties, managed by Magic Real Estate, ended up in the hands of the Socimi Merlin Properties. “We decided to sell BBVA’s branches even though there was a business plan (for them) until 2018. But we wanted to take advantage of the opportunity in the market and in the end we obtained a better return than we initially expected. In December, we also sold an office building in Las Rozas (purchased in 2011). But we do not want to be sellers in the Spanish market, but rather buyers. We have now divested everything that we wanted to”.

Currently, Ara is on the look out for good assets. “There are lots of German funds and private clients that are expressing their interest and their preferences have not changed. They are looking for good assets in central locations. It is a product profile that is hard to find”.

Its targets include offices, commercial assets and logistics warehouses; these products are “very much in vogue”, according to the head of the German fund.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake