Tag: renovation

Jianlin Presents His Plans For Edificio España

29 January 2015 – Expansión

The Wanda Group, controlled by the Chinese magnate Wang Jianlin, will invest €114 million on the refurbishment of the Edificio España in Madrid and a further €30 million on the project to regenerate the surrounding area.

The plans of the Chinese businessman Wang Jianlin, owner of the Wanda Group holding company, to convert the Edificio España in Madrid into a luxury hotel, residential and retail complex, take an important step forwards today. The Executive of the Community of Madrid will discuss the modification to the General Urban Development Plan at their Government Board meeting. Following approval by the Town Hall of Madrid, it is expected that the Government of Ignacio González will also vote favourably.

The proposal, presented by the Santander Group (which owned the building until last summer, when it sold it to Wang Jianlin for €265 million) and supported by Wanda Madrid Development (which formalised the purchase of the building before a notary of 30 July) will result in changes not only to the historical building in the capital, but also to the area surrounding it.

Jianlin has committed, together with other businesses, such as the VP Group, controlled by Vicente Pérez, to finance some of costs of the area’s regeneration, which includes the expansion of the pedestrian area (by 12,500 sqm) and the construction of an underground walkway between Calle Ferraz and Calle Bailén. Jianlin will contribute around €30 million of the total €79.5 million to be invested, according to sources close to proceedings. 51% will be borne by the concessionary companies to be awarded the new car park in the area, according to the Town Hall.

In addition to the €265 million Wanda paid Santander to acquire the property and the €30 million it will invest in the regeneration of the plaza, the Chinese group will invest a further €114.085 million in the renovation of the building, designed by the architectural firms Foster and Lamela, which have worked together before on other projects, such as the construction of Terminal T4 at Madrid’s Barajas airport.

Comprehensive renovation

The Edificio España will be fully refurbished on the inside (the building will be completely gutted), whilst on the outside, only the main façade will remain, together with part of the sides and the existing chamfer on the rear façade (located between Calle los Reyes and Calle Maestro Guerrero).

The new project will put an end to the rear façade, designed as a “comb”, which creates five interim patios and provides access to the San Marcos church and the neighbourhood of San Bernardo from Plaza de España.

In addition, the new Edificio de España will have almost 10,000 sqm of underground space, which will be used to expand the parking area, increasing it from its current size of 2,473 sqm to 12,000 sqm, which will result in 318 more parking spaces.

In exchange for the extension of the car park, Wanda must grant 10% of this space to the Town Hall for public use or pay for that space separately. According to the proposal presented to the town hall, the Chinese investor will choose the second option.

The size of the residential area, which will include around 380 homes, and the hotel space will barely change: decreasing from 40,883 sqm to 37,916 sqm in the case of the former and from 22,720 sqm to 22,000 sqm in the case of the hotel.

The main change proposed by Wanda will affect the retail area, whose space will be increased from 3,687 sqm to almost 15,000 sqm. The aim is to create a “large retail space” between the ground floor and the third floor. “We expect to house a variety of retail activity, primarily clothing and accessory stores”, they say in the proposal.

The building work will take place between 2016 and 2020 and it is expected that the homes will be completed between 2019 and 2021. The construction work is expected to create almost 4,000 jobs, between direct and indirect roles. Once completed, 185 people will work in the hotel and retail space in the Edificio España.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Renta Plans To Buy €500m Worth Of Buildings In Spain

23 January 2015 – Expansión

The real estate company Renta Corporación has begun 2015 with its eye once again on acquisitions. With a healthy balance sheet and the threat of bankruptcy behind it, the company has agreed an alliance with two overseas funds to buy buildings amounting to €500 million in Madrid and Barcelona this year.

Under the plans, Renta Corporación will contribute 10% of the capital and will act as the manager of the transactions, whilst the funds will provide the remaining 90%. Together, they will spend €250 million and the other half, up to €500 million, is expected to be financed by banks.

One of the funds is Kennedy Wilson Europe Real Estate, with whom the real estate company signed a partnership agreement last December. And its alliance with the second investment fund is in the “advanced” stage, explains the Chairman of Renta Corporación, Luis Hernández de Cabanyes.

The €500 million will be used to acquire a range of buildings including offices, residential properties, hotels, shopping centres and land. Renta, which has historically focused on the purchase, renovation and sale of residential buildings, will hereby enter other segments of the real estate market.

At the end of December, Kennedy Wilson Europe Real Estate and Renta Corporación closed their first purchase under the new alliance, in Madrid. The target, an office building in Calle Santísima Trinidad, will be converted into luxury homes, with a planned investment of more than €5 million.

The Chairman of Renta Corporación considers that “financing will experience an upturn over the next twelve months”. The banks “are in much better shape, from a solvency perspective, than in 2008”, he said.

Hernández de Cabanyes points out that Renta Corporación’s vocation has always been the purchase of “buildings with potential for value generation”. Now, with the help of these funds, “we have the peace of mind that comes from having more financial muscle”. It may take anything from six months to four years for the alliance between Renta and these funds to make purchases, create value and realise sales.

According to Hernández de Cabanyes, the prices of buildings in Madrid and Barcelona are currently 55% of the peak values they reached in 2007. In the case of land, its current value amounts to just 25% of the prices seen before the burst of the housing bubble.

In November, Sareb, Popular, ING and Banco Caixa Geral all invested in the share capital of Renta Corporación, in exchange for the cancelation of their debt in the company.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake