Savills IM: Inv’t of €500M per Year Until 2022 Following Purchase of Aguirre Newman

26 June 2018 – Eje Prime

Savills Investment Management (Savills IM) is getting its chequebook out in Spain. The fund manager of the real estate consultancy firm is looking for new investments in the country six months after integrating Zaphir Asset Management into its structure under the framework of the acquisition of Aguirre Newman by Savills. Savills IM’s plans involve investing €500 million per year in Spain until 2022.

According to explanations provided by Fernando Ramírez de Haro, Director of the Savills IM office in Spain, speaking to Eje Prime, the fund manager forecasts building an asset portfolio on the Iberian Peninsula worth €2 billion, up from its current value of €480 million.

The company is now starting an ambitious positioning strategy in Spain, “having completed the integration of Zaphir”. Ramírez de Haro, who leads Savills IM’s office following the corporate operation, served as the Director General of Zaphir since 2007. Savills announced the acquisition of Aguirre Newman in July last year, but the operation was not completed until December when Savills IM integrated Zaphir.

The company is currently analysing investments worth €750 million in Spain, although the group is also considering entering the Portuguese market. Even though in 2017, the company’s most active markets were the United Kingdom, Italy and Japan, the forecasts of Ramírez de Haro indicate that Spain will become the fourth most important European market for the group, behind the United Kingdom, Italy and Germany.

Savills IM’s current portfolio in Spain comprises thirteen assets or projects. Half of them correspond to investments in offices, 25% to retail, 17% to residential and 7% to logistics, according to Ramírez de Haro. One of the most recent operations signed by the group was the purchase, in May, of a hypermarket operated by Eroski in San Sebastián for €48 million.

The executive maintains that the company is looking for opportunities across the four segments, especially in retail and offices. “I do not want to say that logistics is not important, it is and very much so, but it is the segment that is suffering from the most acute shortage in terms of supply”, he said. “In terms of retail, a negative vision is coming from the USA, but for us, that is not the case, provided you look for assets that are not so dependent on online sales, such as retail parks, high street stores, outlets and shopping centres linked to food”, he maintains.

Savills IM combines three types of operations: the first is the management of funds raised in Europe (especially in Germany): the second involves the mandates of global investors; and the third is to support value-added funds in their investments in Europe. Whilst in the first case, the average investment in terms of own funds is between €20 million and €80 million, international mandates tend to be upwards of €100 million and value-added operations typically range between €15 million and €100 million.

The fund manager has a workforce of sixteen people in Spain, fifteen of whom come from the former Zaphir structure and one from Savills IM. The group expects to have 22 employees in five years time.

On the global stage, Savills IM has a workforce of 300 employees and eighteen offices. In 2017, the group recorded transactions worth €5.5 billion: €4.5 billion in Europe and €1 billion in Asia. The company plans to spend €1 billion in own funds in 2018 for the acquisition of new assets in Europe and Asia.

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

Translation: Carmel Drake

Merlin Sells Endesa’s HQ In Málaga To Family Investor

17 May 2017 – 20 Minutos

The consultancy firm Aguirre Newman has led the sales operation of Endesa’s headquarters in Málaga, a property owned by Merlin Properties and located on Calle Maestranza, number six, in the La Malagueta neighbourhood.

The building, which is leased to the electricity company, has a gross leasable area of 2,046 m2 and was constructed between 1930 and 1940. The asset may be used for compatible purposes in additional to its existing use as offices and it will continue to serve as the headquarters of the energy company in Málaga.

Merlin Properties, the leading listed real estate investment company (Socimi) in the acquisition and management of tertiary real estate assets on the Iberian Peninsula, entrusted the sales process of the real estate asset to Aguirre Newman, according to a statement from the consultancy firm. (…).

According to several sources in the sector, the buyer is a family investor.

Original story: 20 Minutos 

Translation: Carmel Drake

CBRE: A Third Of Barcelona’s New Homes In 2017 Will Be Luxury Properties

20 December 2016 – La Información

One third of the 764 new homes that are going to be built the city of Barcelona in 2017 will be luxury, according to data from the real estate consultancy CBRE, which reveals that most of the property development activity in the city will be centred around: El Eixample (439 homes), Sants-Montjüic (126) and Sant Martí (100). The consultancy also forecasts a gradual increase in prices.

The Director of the CBRE office in Barcelona, Anna Esteban (pictured above), explained at a press conference on Monday that the new luxury homes are not only being constructed in the upper area of the city, but also in the centre and along the sea front, in line with the significant demand from international investors.

The Vice President of CBRE in Spain, Enrique Martínez Lagun, noted that this demand for high standing homes is linked to the attraction of international companies, which consider that Barcelona offers a very good price-quality relationship.

Esteban revealed that “several large multinational companies will announce that they are moving some of their operations to Barcelona” in 2017, although she pointed out that they will have trouble finding the large spaces that they need. As such, she predicts that there will be some major renovation projects in the Catalan capital to meet demand, given that there are insufficient plots of land available to build from scratch.

The city is planning to build around 200,000 m2 of office space over the next few years, although 100,000 m2 of that space has already been committed to clients, which means that the other half is still available. The area that is expected to see the most significant growth is the 22@ district, where 65,000 m2 of space is under construction, one project is due to be started and four others are being assessed. The current stock of office space there is practically full and rents are similar to those charged in the city centre. (…).

Essential renovations along La Diagonal

Esteban also said that Paseo de Gràcia has lost 80,000 m2 of office space over the last few years, due to changes in the use of properties towards more profitable activities, such as retail, residential and hotels. She calculates that more than 60% of the office buildings on the Avenda Diagonal thoroughfare require major renovations to adapt them to current demand and ensure that they do not become obsolete. She also predicts that the Plaza Europa and Almeda Park area will see higher occupancy rates and rents once the 22@ area has become more established.

The lack of supply to meet the high demand for offices has meant that Barcelona has seen the highest increase in rental income in Spain in recent years, up by 21% since 2014. Rents are forecast to grow by a further 7% in 2017, making it the second European market in terms of forecast rental growth, behind Madrid.

For the Catalan logistics sector, CBRE forecasts a 5% increase in rents in 2017, following growth of 8% since 2014, making it the highest ranking European market in terms of rental growth in this segment. (…).

Original story: La Información

Translation: Carmel Drake

Deloitte Is The Leading Advisor Of Shopping Centre Deals

20 October 2016 – Expansión

The Big Four are positioning themselves as major players in the market to advise real estate operations and are gaining ground in a segment that has been dominated by other players until now. The professional services firms are looking for new business niches in order to generate returns and strengthen their audit businesses, which generate significant recurring income for their balance sheets, but which are now mature markets, with limited margin for growth.

This effort has led the Big Four to dominate the transaction advisory sector and, in the case of Deloitte, it has managed to gain a foothold in the market that has been particularly dominated by real estate consultancy firms until now: the shopping centre segment.

Specifically, the company chaired by Fernando Ruiz now leads the ranking after participating in almost half of the major operations closed in 2016 to date. So far this year, transactions amounting to almost €2,000 million have been signed in the shopping centre segment, which has become one of the star products of the real state market, boosted by the economic recovery and improvement in consumption.

In this growing market, which still has further potential for growth, Deloitte has earned its place as an advisor of choice. Specifically, the professional services firm achieved a market share of more than 50% of the transaction volume, outperforming CBRE, with 32%, PwC, with 7% and JLL and Savills, with 4% each.

Deloitte participated alongside CBRE in the largest operation of the year so far in the shopping centre segment: Diagonal Mar (Barcelona). The asset was acquired by Deustche Bank from Northwood over the summer for almost €500 million. Deloitte advised the buyer whilst CBRE advised the seller.

The professional services firm has also advised Carrefour on its purchase of 36 supermarkets from Eroski for €205 million and TPG’s acquisition of the L’Aljub shopping centre in Elche (Alicante) for €100 million. Another major operation closed this year in this segment involved the Gran Via de Vigo shopping centre, which was acquired by Lar España in a deal advised by another Big Four firm, PwC.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Irea: Hotel Inv’t May Reach €2,000M This Year

20 June 2016 – Expansión

Hotel investment in Spain may reach €2,000 million this year, according to estimates made in a study compiled by the real estate consultancy Irea.

Between January and May this year, based on provisional data, investment in the purchase of hotel assets in Spain amounted to €611 million, down by 14% compared to the same period in 2015.

Nevertheless, this investment level is very significant for the real estate consultancy, in comparison with the trend seen during the first five months of the year over the last ten years.

In terms of the volume of hotel assets sold, the figure is very similar to the same period in 2015. During the five months to 31 May 2016, 39 hotels have been bought and sold (compared with 42 last year), nevertheless the number of rooms transacted has decreased by 42.2% from 8,673 to 4,993 so far in 2016.

Increase in the average price paid per room

According to Irea, this implies a considerable increase in the average price per room from €81,000 during the period from January to May 2015 to €122,000 during the same period this year.

For the consultancy firm, this increase is primarily explained by the sale of Villamagna in Madrid (in Q1 2016), at a price of €1.2 million per room, which represents the highest price ever paid per hotel room in Spain.

In addition, the study shows that no hotel portfolios have been sold so far during the five months to May, compared with four that had been sold during the same period in 2015.

It is worth noting the Socimis’ commitment to the hotel sector in the short and medium term, a formula that is currently accounting for all of the operations associated with repositioning assets and adapting them to suit the premium segment.

Experts in the hotel sector agree that the level of growth in this industry may continue in Spain if the hotel supply is renewed and updated in line with the expectations of international tourists, in addition to the investment in technology and the search for customer loyalty.

Original story: Expansión

Translation: Carmel Drake