Tag: real estate investment

Real Estate Investment Plummeted by 86% in Q2

Investment in offices, logistics assets, retail properties and hotels plummeted by 86% to 200 million euros in the second quarter of the year.

During the second quarter of the year, operations worth just €200 million were closed in the Spanish real estate sector. That figure represents a decrease in investment of 86% compared to the same period in 2019, according to a study by JLL.

The decline leaves the sector’s performance for the first half of the year in negative territory, given that, with one week to go, the semester is set to end with a reduction in investment of 15% and a total investment volume of 2.5 billion euros, according to El Confidencial. Those figures could have been worse since they do include the sales of Intu Asturias and Puerto Venecia, which were initiated in 2019 but completed at the start of this year, with a combined volume of €800 million.

Real the full article in Spanish.

Real Estate Investment Reached €12 Billion in 2020

3 January 2020 – Real estate investment in Spain ended the year of 2019 with a total investment volume of approximately €12 billion, a drop of 35% year-on-year, according to a study by Savills Aguirre Newman.

Despite the seemingly steep fall in investment, the firm noted that demand remains robust, with prices forecast to increase by 3% to 4% in the coming year.

Jaime Pascual-Sanchiz, the CEO of Savills Aguirre Newman, averred that the decline was largely concentrated in the market for existing homes. The executive expects the continued growth of new developments, though at a reduced pace. Construction has declined in some specific markets, such as Madrid, Valencia, Malaga and some of the islands, which had seen extraordinary levels of growth last year.

Original Story: Expansión / Europa Press

Translation/Summary: Richard D. Turner

Henderson Park and Hines Aquire Barcelona Student Housing Scheme (ES)

Monday, 13 August 2018

Henderson Park, the European real estate investment platform founded by Nick Weber, and Hines have completed the acquisition of a site to develop a 750-bed student housing project in Barcelona, Spain. This is Henderson Park and Hines’ second student accommodation investment together following an earlier project in Lancaster, UK, and forms part of their joint venture to pursue value-added opportunities in the sector across Europe. The purchase price was not disclosed.

Occupying half of a city block in the 22@ Innovation District on the edge of Barcelona’s desirable neighbourhood of Poblenou, the joint venture’s latest project will see the development of a 20,000m², 750-bed student housing scheme, just 15 minutes’ walk from nearby university campuses. The JV is targeting to deliver the scheme for the 2021/2022 academic year.

The finished scheme, ‘Aparto Diagonal Mar’, will incorporate a range of shared amenities including a swimming pool, gym and sports facilities. Hines’ in-house operating platform, Aparto, will manage the asset once operational, to ensure an enhanced experience for its student residents.

Nick Weber, Founding Partner of Henderson Park, said: “The Spanish market, and Barcelona in particular, presents highly attractive supply and demand dynamics for an investment into the student accommodation sector, and we’ve identified a clear appetite for the kind of high-quality purpose-built product we plan to deliver in this transforming neighbourhood of Barcelona. We are pleased to further extend our partnership with Hines as student housing is an asset class with compelling underlying fundamentals across a range of different European cities.”

Lars Huber, CEO of Hines Europe, said: “The fundamentals of Barcelona’s student housing market are very strong, with an undersupply of quality accommodation, despite the popularity of its universities. 22@ Innovation District is set to provide a memorable living experience and is the ideal location for our Aparto management platform, with its strong placemaking and community focus. This investment demonstrates our commitment to the student housing sector as we continue to look for opportunities in core cities across the UK and Europe with growing and dynamic student populations.”

Original Story: http://europe-re.com/henderson-park-and-hines-acquire-barcelona-student-housing-scheme-es/65522

 

BNP Paribas: RE Inv’t Amounted to €2.45bn in Q1 2018

6 April 2018 – Expansión

The rate of growth of real estate investment in Spain is slowing down, although it retained its strength during the first quarter of 2018. The volume transacted during the 3 months to March amounted to €2.45 billion, having decreased by 27.5% with respect to the same period last year (€3.38 billion), a figure that included record operations such as the purchase of the Xanadú shopping centre for €560 million, which caused investment volumes to soar.

According to a report compiled by the consultancy firm BNP Paribas Real Estate, the retail segment led the investment ranking during the first three months of the year to account for 44% of the total volume transacted, in other words, around €1.08 billion. That was thanks to operations such as the sale of a portfolio of stores by Inditex to the German fund Deka for €370 million; the sale of Parque Corredor, in Torrejón de Ardoz (Madrid), for €200 million; and the sale of the Las Habaneras shopping centre in Orihuela (Alicante), for €160 million.

Retail was followed by the office and hotel segments, with a volume of around €350 million each, and the logistics segment with 10% of the total.

Residential assets also accounted for 10% of the total investment figure thanks to operations such as the purchase of a portfolio of 1,500 homes by Testa from CaixaBank for €228 million, whilst alternative assets gained traction to account for 7% of the total volume invested.

Assets

By type of investor, funds are becoming established as the main buyers of real estate, unseating the Socimis, which remain immersed in the asset management process and which are preparing to dispose of some of their assets.

David Alonso, Director of Research at BNP Paribas Real Estate, explains that the high volume operations currently in the pipeline indicate that the total investment figure for the year as a whole may well reach, or even exceed, the investment volume recorded in 2017.

The aforementioned operations include the portfolio of offices that Hispania has on the market, which has an estimated closing price of between €500 million and €600 million; three shopping centres that Sonae Sierra and CBRE Global Investors have up for sale worth around €500 million; a portfolio of four shopping centres owned by Unibail Rodamco; and several large office complexes in Madrid and Barcelona located in good areas of the market.

More caution

Luis Nuño, Director of Office Investment at BNP Paribas Real Estate, indicates that the market remains optimistic about the evolution of real estate investment in Spain, although with “more caution” than in previous years.

“Investors are going to have to propose more imaginative formulae and be more flexible if they want to access certain operations. Vendors’ expectations have been increasing gradually in recent years, making it more difficult to achieve the returns demanded by investors”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Deloitte: Tertiary Real Estate Inv’t Amounts to €9.7bn in 2017

27 December 2017 – Expansión

An increase in property prices has led to a 22% reduction in the purchase of non-residential assets in 2017 with respect to 2016.

The boom that has marked the real estate investment sector in Spain since 2014 is starting to show signs of slowing. That is according to the most recent non-residential investment figures, which, with just a few days to go before year-end, are reflecting a decrease of 22% with respect to 2016.

According to a market study performed by Deloitte Real Estate, investors spent €9.7 billion this year on tertiary properties (offices, hotels, commercial and logistics assets) compared with €12.4 billion in 2016 and €11.8 billion in 2015.

“With just a few operations still left to close before 31 December, which will amount to between €0.5 billion and €0.6 billion, tertiary investment has fallen by 22%. This decrease in activity is a sign that we have crossed the equator of the bullish cycle and that we are possibly starting a period of greater stability”, explained Javier García-Mateo, Partner in Financial Advisory at Deloitte.

The 22% decrease is due to a weaker second half of the year in terms of the rate of investment (…). During the third quarter, investment fell from €6.6 billion in 2016 to €1.6 billion this year, says Deloitte in its report. During the fourth quarter, the difference was a decrease of 42% (€2.8 billion compared with €1.8 billion). The decrease is more pronounced in the property segments that tend to lead absolute investment, namely, offices and retail assets. In the case of the former, investors have spent €2.3 billion in 2017, less than half the amount recorded in 2016 (€4.9 billion) and 2015 (€5.3 billion) (…). “Offices tends to be the segment that traditionally leads investment, but this year it has decreased by 55%. This is not due to a lack of supply, but rather the gap between the expectations of sellers and the offers from buyers. Moreover, some operations have been abandoned, such as the sale of Hispania’s portfolio”, said García-Mateo.

In this way, unlike in previous years, where large operations were closed during the final quarter of the year, such as Torre Foster – sold for €490 million at the end of 2016-, Torre Espacio – sold in November 2015 for €550 million – and Torre Picasso – sold for €400 million in December 2011 – this year, the most significant operation has been the sale of 50% of Torre Caleido on Paseo de la Castellana, for around €150 million, closed during the first quarter of the year.

In the case of retail assets, investment in shopping centres fell by 29% to €2.7 billion, despite record operations such as the one involving Xanadú, whilst the purchase of shops fell by 36% to €421 million.

“After 4 years of increases in valuations and the consequent decrease in yields, investment in offices and retail property is significantly less attractive than in the hotel and logistics segments, where there are up to 3 points of differential per year”, say the sources at Deloitte. The large hotel operations this year have included the purchase of Edificio España by the Riu Group and the sale of HI Partners, along with its 14 establishments, by Banco Sabadell to Blackstone for €630.73 million.

Cataluña

The 22% decrease comes at a time that is being characterised by the independentist challenge in Cataluña, although the uncertainty being generated in that region does not seem to have had an impact on real estate investment, at least not yet, according to García-Mateo. “In Cataluña, the absorption of office space has fallen and sales in shopping centres have also decreased, by around 10% with respect to Q4 2016, but investment has not been hit, as evidenced by Meridia Capital’s recent purchase of the Barnasud shopping centre and Invesco’s acquisition of the Mango facilities in Palau de Plegamans (Barcelona)”, he added.

In this way, the experts justify that the decrease in investment is due to a change in the cycle, following four years of rapid growth (…).

Nevertheless, the €9.7 billion spent during 2017 represents the fourth-highest figure in the historical series (dating back 13 years).

It was only in the last two years, as well as in the record year for the sector (2007), when investment amounted to €12.6 billion, that investment in non-residential assets exceeded the €10 billion threshold, according to Deloitte.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Savills: Spain Leads RE Inv’t in Southern Europe

12 December 2017 – Expansión

Real estate investment in Spain is on the verge of setting a new record and positioning the country as the leader of the sector’s boom amongst its counterparts in Southern Europe. Specifically, investment in the tertiary market (offices, retail, hotels and logistics assets) in Spain looks set to amount to €8.9 billion in 2017, which represents an increase of 5% compared to the previous year and the highest figure in a decade, according to a report from the consultancy firm Savills.

The report reveals the strong performance detected in the retail and hotel sectors and also highlights that the growth in e-commerce in Spain is expected to result in greater demand for logistics and storage space, a segment that has lagged behind the main markets in Europe until now.

Luis Espadas, Director of Capital Markets at Savills España, also points out that, to the extent that demand in the more traditional sectors grows, so investors are starting to focus on alternative products, such as student halls and nursing homes. “That market may be small still but it has the potential to develop more attractive returns and price differentials”.

Other countries

The recovery of the sector in Spain has been followed by an upturn in other countries such as Italy, Portugal and, more recently, Greece and Cyprus. In this way, after a few years of weak investor activity, the volume of investment in Southern Europe increased by 277% in 2017, compared to the minimum of €5.2 billion recorded in 2012.

Overall, total investment volumes increased by 8% YoY. The markets in Southern Europe now account for 10% of the total investment in the European Union, compared to the 5% that they represented in 2012. “Economic growth, the decrease in unemployment rates and renewed consumer confidence are attracting investors back to Southern Europe”, says Alice Marwick from the Europe Research department at Savills.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Laborde Marcet: RE Inv’t Amounted To €6,230M In H1 2017

3 August 2017 – El Mundo

Investment in real estate amounted to €6,230 million during the first half of 2017, in terms of non-residential property, according to data published by the real estate and wealth manager Laborde Marcet.

By sector, retail accounted for 42% of the total (€2,619 million), ahead of the office sector, which represented 25.5% (€1,588 million). Meanwhile, the hotel sector accounted for 23% (€1,433 million) and logistics assets the remaining 9.5% (€590 million).

The founding partner of Laborde Marcet, Miquel Laborde, said that the real estate sector is reaching “maximum levels” in terms of the final prices of operations given that the “the difference between demand and supply causes prices to rise, although that pushes down the yield on those assets”.

During the second quarter of 2017, the figures show a QoQ decrease. In the period from April to June 2017, €2,710 million was invested in non-residential real estate operations, down by 23% compared to the first quarter of 2017, when €3,520 million was invested.

By sector, during the second quarter of 2017, retail accounted for 41.5% of the total investment (€1,124 million), followed by the office sector, which represented 26.6% (€720 million). Meanwhile, the hotel sector accounted for 24% of the total (€650 million) and the logistics sector the remaining 7.9% (€216 million). All of the sectors saw their investment figures decrease with respect to the first quarter 2017, with the exception of offices, which increased their market share by 1.9 percentage points.

If this trend continues during the second half of 2017, the tertiary real estate sector would see total investment in real estate for the year reach almost €13,000 million, which would represent an increase of 16.75% with respect to the data recorded in 2016, when investment for the year amounted to €11,134 million.

Original story: El Mundo

Translation: Carmel Drake

JLL: RE Inv’t Amounts To c.€6,000M In H1 2017

27 June 2017 – Expansión

Investment in the real estate sector is registering record-breaking figures in the Spanish market once again. With three days left until the end of the first half of the year, the sale of buildings and land during the first six months of 2017 amounted to €5,991 million, according to the real estate consultancy firm JLL. “There is a lot of money ready to invest in Spain and when products come onto the market, the interest is unleashed. Investors still think that Spain has a lot of potential and that rents are going to rise, accompanied by the forecast economic growth in the country”, explained Borja Ortega, Director of Capital Markets at JLL.

The real estate investment of almost €6,000 million represents an increase of 70% compared to the figure recorded during the first six months of 2016 (€3,548 million), of which €3,000 million corresponded to non-residential asset purchases.

By type of property, offices and commercial assets account for most of the operations. “There is complete faith in Spain, with a clear commitment to both Madrid and Barcelona, and investors continue to seek out good spaces, which they will be able to lease easily”, said Ortega.

In the case of offices, the volume invested during the first six months of 2017 amounted to more than €1,200 million, up by 55% compared to the first half of last year. However, the forecast for 2017 as a whole is that office investment will reach €2,400 million, in line with 2016. During the first few months of 2017, several major operations were completed, such as the sale of Torre Agbar in Barcelona – which was acquired by the Socimi Merlin for €142 million – and the purchase of the Isla Chamartín complex in Madrid, which the fund Lone Star sold for €103 million. “In the case of Barcelona, the cumulative investment volume recorded since the start of the year amounts to €510.65 million, which means that it is almost equal to the total amount invested during the whole of 2016, when €521.50 million was spent in the city – this demonstrates the strong investor appetite that has characterised this first half of 2017”, said sources at the consultancy firm.

Towards a record year

Like in 2016, commercial assets (in particular, shopping centres) have knocked offices off of the top of the ranking as the asset that accounts for most investment. In this way, so far in 2017, investors have spent more than €2,400 million on commercial assets. Their purchases include the shopping centre that has starred in two operations in the last six months: Xanadú. This establishment, which is located in the Madrilenian town of Arroyomolinos, was acquired at the beginning of the year by the British group Intu Properties, which paid the fund Ivanhoe Cambridge €530 million. Three months later, Intu sold 50% of the centre to the manager TH Real Estate for €264 million.

The strong performance of the Spanish real estate sector during the first half of the year means that it is lining itself up for a record year. “Whilst last year, investment amounted to around €9,500 million, this year, I am sure that it will rise by 15%, to reach figures close to the records of 2007″, said Ortega.

In this sense, it is expected that several new operations will close before the end of the year, such as the sale of the Socimi Hispania’s office portfolio, worth €550 million; and of logistics land to be developed and the batch of Rea residences, by the manager Azora. “Now, the core funds are going to play a greater role, taking advantage of the exit of other more opportunistic and value-added investors, which are going to start selling off products that they purchased in recent years”, said the director at JLL.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

CBRE: Madrid Is EMEA’s 3rd Most Attractive City For RE Investors

30 March 2017 – Mis Oficinas

Madrid is the third most attractive city in Europe, the Middle East and Africa (the EMEA region) for real estate investment. At least that is according to the “Global Investors Intentions 2017” report compiled by CBRE, the leading real estate consultancy and services company in the world, based on a survey of 2,000 international investors.

According to the study, London leads the ranking of the most attractive cities for real estate investment, after it was chosen by 17% of investors. It was followed by Berlin (15.8%) and Madrid (8.4%). Amsterdam and Paris complete the top five (…). For the first time in 2017, cities such as Hamburg and Milan did not appear in the top ten, due to growing concerns from investors about (high) asset prices in some of Europe’s most established markets, following years of increases.

“Madrid is a very attractive city for international investors for a variety of reasons. Prices here are still below those of other markets, and in recent years, some very interesting renovation and development projects have been launched. Similarly, rental income is forecast to rise. These factors caused investment in the Spanish capital to exceed €4,000 million in 2016”, said Paloma Relinque, National Director of Capital Markets at CBRE Spain.

Meanwhile, Spain is ranked sixth in the list of the most attractive countries to invest in, whereby maintaining its top-10 position, against competition from all of the countries in Europe, the Middle East and Africa. In this sense, Germany is the market of choice for 22% of those surveyed as an investment market in 2017. It is followed by the United Kingdom (20%), Eastern Europe (10%), Scandinavia (10%) and The Netherlands (9%).

In terms of the sectors that these investors plan to invest in, the office market was mentioned the most, by 34.7% of investors. It was followed by the industrial-logistics sector, chosen by 25.9% of respondents. Nevertheless, one of the most interesting conclusions was the growing appetite for alternative assets, in which 7 out of every 10 real estate investors are now investing. Specifically, real estate debt is the segment that is sparking the most interest amongst investors (31%), followed by leisure and entertainment (27%) – which is the segment that grew by the most in comparison to the previous year – and student halls of residence (25%).

On the other hand, the report described investors’ main concerns for 2017. The most frequently mentioned concern was the risk that interest rates rise more quickly than expected, a fear cited by a quarter of the investors surveyed. It is noteworthy that, despite the numerous elections on the horizon in Europe and their possible implications for the sector, investors place greater importance on the economic climate than on geopolitical matters. The third concern is the fact that prices are forecast to increase and the risk of a possible bubble. (…).

Original story: Mis Oficinas

Translation: Carmel Drake

CBRE: RE Inv’t In 2017 Will Exceed €13,600M

16 January 2017 – Cinco Días

Merlin’s purchase of Torre Agbar in Barcelona and the agreement signed between the Baraka group and the chain Riu to open a hotel in Edificio España in Madrid, both announced last Thursday, are major real estate operations that are not only defining the start to 2017, they are also marking the sector’s entry into a new cycle. That is one of the conclusions of the Real Estate Trend Barometer compiled by CBRE and published on Friday, which calculates that non-residential real estate investment in 2017 will exceed the figure recorded in 2016 (€13,600 million).

The reasons given by the consultancy firm for this optimism include the economic recovery and the political stability following the formation of the Government. Nevertheless, it alerts that there are also risks for the sector from the volatility on the international stage and specifically due to Brexit. “There is no reason to think that 2017 will be worse than 2016”, said Adolfo Ramirez-Escudero, President at CBRE, who forecasts a “very active” investment market this year. That situation results from improvements in rental income for all assets: offices, retail, residential and logistics.

In this sense, the office market offers the greatest possibilities. Although in 2016, the amount of new space leased decreased (with only three operations exceeding 10,000 m2, compared with nine in 2015), CBRE considers that it was the political uncertainty that caused that downturn. Now that that uncertainty has been resolved, the operations that were not signed last year will be completed instead in 2017.

The logistics segment occupies second place in terms of the opportunities it offers investors, given the strength of ecommerce and the needs of companies in the sector such as Amazon. Next comes the hotel sector, where the specialist consultancy firm Irea forecasts investment of €2,000 million over the next year. In this context, the residential market also stands out and CBRE expects to see a recovery there for the first time since the crisis. In fact, it predicts that demand for new homes will increase by 180,000 units between 2010 and 2025. (…).

This improvement in residential housing will force real estate developers to play an important role. (…). That will be the case, for example, of the new real estate companies created from scratch by international funds, including Dospuntos (owned by Värde Partners) and Neinor Homes (owned by the fund Lone Star).

In terms of investor profile, family offices and private investors will gain weight compared to last year, Socimis will continue to play an important role for another year. Value added funds (which invest in renovations) and institutional entities (such as insurance companies) will also be key players. Nevertheless, opportunistic investors – those who look for bargains – who were very active in the depressed market of 2014 and 2015, will now exit the arena. According to Ramírez-Escudero, that shows that the market is now more mature. (…).

Original story: Cinco Días (by Álvaro Bayón)

Translation: Carmel Drake