Venezuelans Lead Ranking of Most Active Foreign Residential Investors in Madrid

5 June 2018 – La Vanguardia

Venezuelan immigrants lead the ranking of home acquisitions by foreigners in the Spanish capital, according to data from Redpiso’s Research Service.

This data represents an increase of 10% with respect to the previous year and places investments by Venezuelan immigrants above those made by the Russians and Chinese, who were, until now, the nationalities that purchased the most homes.

The typical investor profile are people with a medium-high purchasing power, educated and employed, who have lived in the country for no more than three years.

Above all, they are buying homes in the areas of Chamartín, Hortaleza, Salamanca and Retiro.

The average cost per home amounts to around €565,000 and purchases are mainly happening in the second-hand housing market, “given that the supply of new build properties is very low and even more so in these areas”, said Redpiso.

In terms of the rental market, the average number of contracts increased by 35%, with the average spend on rent by Venezuelans amounting to €1,700 per month with three-year renewable contracts.

To explain the factors driving this growth, sources at Redpiso allude “to the mass arrival of Venezuelan immigrants who are coming to Spain due to the controversial socio-political situation in their country, as well as the limited and increasingly more expensive supply of rental homes in Madrid”.

Original story: La Vanguardia 

Translation: Carmel Drake

La Liga Puts Its HQ Up For Sale For €3.5M

9 October 2017 – Eje Prime

La Liga is hoping to receive a bonus before Christmas. The football league association will complete its move to a new corporate headquarters before December and so plans to complete the sale of its current offices during the final stretch of 2017 or beginning of 2018, according to Palco23. The football clubs’ delegated commission approved the sale of the building at the beginning of the year and has now commissioned the valuation of the building before it puts it on the market: €3.52 million.

The valuation has been performed by an independent third party and has forced the entity chaired by Javier Tebas to recognise a loss amounting to €1.04 million. That is because the price that has been assigned to the property, located at number 10 Calle Hernández de Tejada, is lower than its net book value in the accounts.

The building has a surface area of just over 1,100 m2 and La Liga tried to squeeze into the various floors as it continued to grow. Nevertheless, two years ago, the association decided to rent some additional offices around the corner, and in the end, has decided to concentrate all of its activity in a single building, located just 800m away from the historical headquarters.

As such, the association that represents first and second division clubs will occupy four of the seven floors in Edificio Murano, located at number 60 Calle Torrelaguna. That building is owned by the real estate group Hispania, which has secured the occupation of more than 50% of the property’s surface area (7,574.6 m2) thanks to Spanish football.

The move will not only result in an improvement in the conditions of the 158 workers that La Liga employs, it will also allow the body to offer a more modern image. Compared to the antiquated facilities at Hernández de Tejada, the new headquarters will be located in a glass building with views of Avenida de América and Calle Arturo Soria.

The office market in Madrid

The office market is one of the most active in the Spanish real estate sector. During the first six months of the year, 275,037m2 of office space was leased in the capital, a very similar figure to that recorded during the first half of 2016. According to the real estate consultancy Aguirre Newman, activity has been improving throughout the 6 months.

Another significant feature in the market has been the recovery of large volume operations: 25 deals were signed for spaces spanning more than 3,000 m2, which accounted for 42% of the total volume of operations closed. Those figures include La Liga’s new building on Calle Torrelaguna.

The overall office availability rate in the market in Madrid has decreased significantly over the last six months, from 11.4% in January 2017 to 10.8% in July 2017, as the volume of available space decreased by more than 74,000 m2.

In terms of prices, during the first half of the year, average rents grew in all areas, to reach an average half-year a rise of 3.9%. The average rental cost in the capital’s business district rose to €28.94/m2/month, whilst average rents in the peripheral areas amounted to €12.61/m2/month.

The most significant increases in rental prices by area were recorded in the central business district, with an average rise of 7.7% in six months. That mainly occurred as a result of a change in companies’ requirements, since they are now prioritising location and building quality over rental cost.

Original story: Eje Prime (by M. Menchén and C. Pareja)

Translation: Carmel Drake

Gesvalt: Rental Prices Rise In Spain’s Prime Retail Spaces

31 March 2017 – Eje Prime

Rental prices in the retail market continued to rise in 2016. Rental prices on the prime high streets of the main urban areas in the country experienced a change in trend after an increase in their prices. High streets such as Portal de l’Àngel in Barcelona and Gran Vía in Madrid now have monthly rental costs of €270/m2 and €230/m2, respectively, according to the Market Study of Commercial premises, prepared by the valuation specialist Gesvalt.

Although the retail sector still represents a very attractive market, its volume decreased with respect to 2015, primarily due to the boom in the Socimis, which last year focused their attention on actively managing their portfolios, rather that making new investments like the year before.

In the Catalan capital, streets such as Paseo de Gracia, Rambla Cataluña and Avenida Diagonal saw prices stabilise at their 2015 levels. In Madrid, rental prices rose slightly with respect to 2015, with Calle Preciados once again the high street that recorded the most expensive prices in the capital, with rents of €255/m2/month. In Madrid, the significant increase in rents on Gran Vía saw prices rise from €205/m2/month to €230/m2/month last year.

In Valencia, rents in the prime areas rose by between 5% and 10%, and Calle Colón was the city’s most expensive street, with rents of up to €160/m2/month on its most exclusive stretches. In the city of Palma, prices remained stable with respect to the previous year on the city’s three prime streets.

“Meanwhile, it is worth noting the low and almost zero availability of large and flagship stores in all of the prime areas, due to the significant demand for that kind of property from the large brands”, said the study.

Sandra Daza, Director General at Gesvalt, said that, based on the results obtained, it is clear that “commercial premises are still the most profitable assets in Spain”. And she added that “buying a commercial property in a prime area in Spain and then leasing it out would currently generate a gross return of between 4.5% and 6%.

Original story: Eje Prime

Translation: Carmel Drake

Mitula: Rental Prices Soar In Spain’s Large Cities

25 January 2017 – El Mundo

The residential rental market is riding high at the moment and this good situation is reflected in rental prices, which are soaring in most of Spain’s major cities, according to a study by the home finder Mitula. Specifically, rental prices have increased by more than 60% in Barcelona over the last five years, whilst in Madrid, they have risen by almost 20% during the same period.

In this way, average rental prices in the Spanish capital amounted to around €1,048 per month in 2012, a figure that has grown in a sustained way over the last five years. By January 2017, the average rent in Madrid stood at €1,256, which represents an increase of 19.85%.

Other cities such as Barcelona and Palma have also seen their residential rental prices soar, but to an even greater extent. In the case of the Catalan capital, for example, the average rent has risen from €892 in January 2012 to €1,478 in January 2017, which represents an increase of 65.70%.

Palma has also seen its rental prices move upwards. A rental home in the capital of the Balearic Islands used to cost around €700 per month on average in 2012. Nowadays, the same property costs around €1,000 (€986), up by 40%, according to Mitula.

This upwards trend is being repeated in most of Spain’s major capitals, but there is one exception: Santander. The capital of Cantabria is one of the few cities where rental prices have remained practically frozen. At the moment, a rental home costs €649 per month, on average, which is 2.84% less than five years ago, when the figure stood at around €668/per month.

Original story: El Mundo

Translation: Carmel Drake

Office Rents In Madrid & Barcelona Are Still Very Competitive

19 September 2016 – Expansión

London: €116.25/sqm – and up to €198/sqm in the West End -. Dublín: €64/sqm. Frankfurt: €45/sqm. Madrid: €34.5/sqm. Barcelona: €28.5/sqm.

Spain’s two largest cities still have the lowest office rental costs in Europe. But, how are these costs calculated and why are Madrid and Barcelona still the most attractive cities in this sense?

A study prepared by the real estate consultancy Knight Frank compares average rents for prime offices, along with occupancy costs, which include amongst other items, taxes, services and establishment costs that companies deciding to open offices in these cities must incur.

For Raúl Vicente, Director of the Office Agency at Knight Frank, “if we compare our markets with those of our European counterparts, then the office markets in both Madrid and Barcelona are still more attractive in terms of costs”.

Moreover, the available supply is also greater and we are currently at a low point in terms of the rental cycle”. The Madrilenian market is proving to be particularly active and the sector may still generate lots of good news between now and the end of the year. Madrid leads the ranking of cities with the greatest potential for rental growth, followed by Amsterdam, Barcelona, Budapest, Lisbon, Milán, Paris and Stockholm.

Average rents have increased in some of these cities, including Madrid, but the price level is still a long way below that of other capitals such as London, where costs soar. The occupancy rate has grown in the Spanish capital by just 1% during the first half of the year and it is noteworthy that no major operations have been signed – i.e. those involving leases for more than 10,000 sqm of space – during the first six months of the year.

Despite everything, the real estate consultants are optimistic and they expect the Madrilenian office market to experience a better second half of the year. Madrid’s capacity to attract businesses is one of the variables that will help this improvement.

Original story: Expansión (by E. Viaña)

Translation: Carmel Drake

Rental Prices Will Rise On La Castellana After The Summer

6 July 2016 – Expansión

Madrid’s financial district is refreshing its image and prices are set to rise in the area after the summer. The Spanish capital’s La Castellana thoroughfare is aiming to attract tenants who are willing to prioritise the quality of space over rental costs.

Whilst investors remain attentive to the course of events unfolding in the City (London), following Brexit’s victory in the EU referendum held on 23 June, and the formation of a new Government in Spain after the election on 26 June, business is continuing as usual and the capital’s financial district is getting ready to open its doors to some new tenants. Some of the countries in the Eurozone may, over time, attract some of the activity that has been performed in the United Kingdom until now, and if this becomes a reality, Madrid’s financial district could represent a good option for companies currently headquartered in London.

Torre Europa is preparing itself to this end. Grupo Infinorsa has launched a process to renovate the property following KPMG’s departure and will allocate €20 million to the modernisation of its facilities. In the same way, GMP is in the middle of renovating the Castellana 77 skyscraper, known as Torre Ederra – the former headquarters of Saint Gobain – as well as Castellana 81 – Torre BBVA – to adapt them both to the new demands of the market. Another building that is looking for new tenants is Torre Picasso following EY’s move to Torre Titania. (…).

Sources at Cushman & Wakefield explain that demand is not growing in Madrid at the moment. “GDP levels are similar to during the years before the crisis, and so around 200,000 sqm of space is being leased out per year. The main explanation is uncertainty”. Moreover, it seems like the slowdown is more acute in the financial district, due to the quality of available stock and the cost. (…).

José Miguel Setién, Director of the Office Business at JLL, explains that renting in Madrid has been cheap until now and the price ratio is still very attractive when compared with other major European cities; this means that there is still a lot of potential in the Spanish capital. “Provided there are no political or structural macroeconomic problems, the figure trend is that the market will continue to rise”, he added.

The CEO of Aguirre Newman, Jaime Pascual-Sanchiz de la Serna, explained that offices in prime areas, as well as in the market in general, have been very static in terms of renovations and new projects. Pascual-Sanchiz says that several projects launched within the last 12 months will come onto the market within the next year. In his opinion, they will be a good indicator for measuring the evolution of offices. “The owners of those properties, including Pontegadea, Mutua Madrileña and the Consorcio de Compensación de Seguros do not have financial problems, and are not desperate to lease their properties at any price”. For the expert, although we are seeing small and medium-sized operations in the area, the large moves, which are more dependent on the domestic and international political situation, will have to be unblocked after the summer.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Office Rents Rose By 5% In Q1 2016

11 May 2016 – Expansión

The reactivation of the real estate market is also being reflected in the office segment. The average price of offices in Spain increased by 5% during the first quarter of the year, according to a report about the sector by the real estate portal misoficinas.es. The report indicates that the market is continuing its positive trend, but “in moderation”. Searches for offices centre around Madrid and Barcelona, which account for 75% of the total, and the prices of offices sought, at the global level, have increased with respect to the same period in 2015, by 7.81% in terms of the minimum price and by 2.81% in terms of the maximum price.

In Madrid, potential tenants focus on the financial district, Alcobendas and the west, which account for 90% of all searches. Users searched for office spaces that are 5% larger than in the same period last year in the centre of the capital. Also in the capital, the rental price of offices sought rose by 6.71% during the first quarter, to reach €12.31/sqm. The size of the spaces being sought in Madrid also increased, up from 585 sqm to 805 sqm.

In Barcelona, the size of the spaces being sought also increased, to reach maximums of 500 sqm during the first quarter, compared with 416 sqm during the same period in 2015. Nevertheless, the report noted a decrease of 5.47% in terms of the average price demanded, with the average price for office space amounting to €9.29/sqm. In this way, the average cost of leasing an office in Madrid is now 32.5% higher than in Barcelona, whereby increasing the differential between the two cities, up from just 17.4% in 2015.

In the rest of Spain, the average price sought rose from €5.86/sqm in 2015 to €6.01/sqm in 2016. The size of space sought also increased, given that in 2015, potential tenants wanted 211 sqm on average compared with 223 sqm in 2016.

Original story: Expansión

Translation: Carmel Drake