Savills: RE Investment in Europe will Amount to €230 bn in 2019

17 March 2019 – Expansión

Real estate investment in Europe will amount to €230 billion in 2019, according to a report by Savills Aguirre Newman and as such will exceed €200 billion for the sixth year in a row.

The main focus continues to be placed on Germany, the UK and France, but other markets such as Poland, Denmark, Finland and Portugal are expected to exceed their average investment volumes over the last five years in 2019.

Savills predicts that the main investors from outside Europe will come from the USA, Singapore and South Korea, like in 2018.

Investors are particularly interested in the logistics segment, and the residential sector in Europe’s major cities.

Original story: Expansión 

Translation/Summary: Carmel Drake

Socimi VBare Acquires a Building in Madrid for €5.3M

9 January 2019 – La Vanguardia

The Socimi VBare Iberian Properties Socimi has purchased a building comprising 27 homes and 2 commercial premises in Madrid for €5.3 million plus transaction costs.

In order to purchase the property, which is located on Calle Vallehermoso in Madrid, VBare has signed a mortgage loan with Banca Pueyo for €3.43 million, contributing the rest of the purchase price through available cash.

The property is mainly dedicated to residential use and the expected net approximate yield will amount to 4.3% once the refurbishment work has been completed.

The building has a surface area of approximately 1,500 m2 and is the second most significant acquisition carried out to date by VBare in terms of investment volume, after the operation it completed on Calle Luchana in Madrid in October 2018.

Original story: La Vanguardia

Translation: Carmel Drake

BNP Paribas: RE Investment Rose by 8% in 2018 to €11.6bn

9 January 2019 – El Periódico

The volume of annual investment in the Spanish real estate sector amounted to €11.63 billion in 2018, which represented an increase of 8% compared to 2017. If we add the corporate operations with underlying real estate to that volume, then the figure increases to €19 billion, which represents an investment record since the end of the crisis, according to the latest report from BNP Paribas Real Estate in Spain. The report highlights that interest from investors in the Spanish real estate sector in 2018 was at its highest level for a decade.

During the fourth quarter of the year, the volume of direct investment in real estate assets – offices, logistics warehouses, hotels, retail and residential – amounted to €3.7 billion in total, which represented an increase of 58% YoY. The evolution of investor activity, therefore, exceeded the expectations of the sector at the beginning of the year.

“The good times that the fundamentals of the market are enjoying, with occupancy levels at maximums and rents that are stable or expanding in the most consolidated markets, together with the surplus capital and the limited alternatives offered by other financial products, have fostered a frenetic pace of activity in the investment market”, explains the report.

By type of asset, the commercial sector (retail) was the star of the year. The volume invested in commercial assets during 2018 amounted to €4.28 billion, which represents an increase of 23% compared to 2017. During the fourth quarter, investment reached €1.26 billion, and so the sector achieved a quarterly market share of 35%. The largest operation during the final quarter of the year was the purchase of a portfolio of three shopping centres – Max Center, Gran Casa and Valle Real – by Sonae Sierra and Perter Varbacka for €485 million.

Commercial yields

Demand from investors for high street retail assets was high, given that they consider them to be a very stable product. Similarly, there was a high interest in land for the development of retail parks, in light of the scarce supply of this type of asset. The yields continued at 3.00% for prime premises; between 5.00% and 5.25% for prime shopping centres; and at 5.75% for prime retail parks.

In terms of the office market, the investment volume recorded during the fourth quarter was €986 million taking the total figure for the year to €2.228 billion. That represented a slight YoY decrease of 4%. The shortage of products for sale meant that fewer operations materialised in 2018 than in 2017. The prime yield in the office market remained at 3.25% in Madrid and 3.50% in Barcelona.

The logistics market continues to rise. The increase in e-commerce and the strong performance of the consumer sector and the economy, in general, have encouraged investment in this type of asset. The investment volume registered during the fourth quarter of the year amounted to €400 million, whilst the total figure for the year (€1.3 billion) represented a new investment record, and an increase of 30% compared to 2017. The shortage of products, combined with the high investment pressure resulted in a considerable adjustment in yields, which amounted to 5.30% in the prime logistics market in the fourth quarter of 2018.

Investors

Investment funds were the great stars of the market, representing 61% of the total volume transacted in 2018. Socimis have been very present in the investment market, both on the buy and sell sides in the main land transactions to develop new products. Finally, the presence of family offices (private investors) stood out, with acquisitions, in general, for volumes of less than €50 million.

Alternative investments remained in the spotlight of investors, who were mainly attracted by student residences, clinics and nursing homes for the elderly. The cumulative volume invested in those types of assets amounted to €600 million in 2018.

Original story: El Periódico (by Max Jiménez Botías)

Translation: Carmel Drake

BMB Launches a Socimi to Invest €100M in Industrial Warehouses

16 October 2018 – Eje Prime

BMB Investment Management is betting on the tertiary sector. The fund manager is finalising the launch of a new Socimi to invest €100 million in the purchase of industrial warehouses.

After entering the residential market with two Socimis (Optimum Re Spain and Optimum III Value-Added Residential), the company led and chaired by Josep Borrell is now looking for higher returns with its latest firm, Optimum Rentals Socimi. This new investment vehicle will focus on the acquisition of assets that offer returns of between 6.5% and 10%, according to reports from Expansión.

The intention of BMB is that 80% of the budget will be allocated to the purchase of industrial warehouses, leased to solvent tenants and located in the industrial parks of Madrid and Barcelona.

Similarly, although Borrell rules out investing in logistics, he does not shy away from the idea that the fund may also take advantage of an opportunity or two in the residential sector or even in the hotel or retail markets.

Optimum Rentals Socimi is starting life with an initial budget of €100 million, of which €50 million will proceed from own funds and the remainder, from bank financing. Sources at the manager confirm that the plan is to maintain the fund in an independent way so that it will live off of its own income. Investors in BMB’s third Socimi are expected to include both institutional and real estate players, and the percentage of international capital is expected to be high.

Original story: Eje Prime

Translation: Carmel Drake

Corp Promotors Acquires Plot Next to La Sagrera Station in Barcelona for €10.4M

17 October 2018 – Europa Press

The real estate company Corp Promotors has acquired a plot of land spanning 1,512 m2 located next to the future La Sagrera AVE train station in Barcelona for €10.44 million.

The Catalan firm has fought off competition from three companies in the bid for the plot, which was opened by the public company responsible for the development of the station, an entity in which the Ministry of Development, La Generalitat de Cataluña and the Town Hall of Barcelona all hold stakes.

The plot, which is located in an area that has “great potential for growth” in Barcelona, can be used for building both homes and commercial premises.

Specifically, it has a buildability of 8,221 m2, of which 7,346 m2 will be used for homes and the remaining 875 m2 will be used for shops.

The land forms part of the plots freed up for railway use generated by the construction of the station. The amount obtained from its auction will contribute to financing the new railway.

In fact, the joint venture company that is developing the station has obtained 63% more than the estimated sales price for this plot, of €6.4 million. That was what allowed Corp Promotors to acquire the land and fight off competition from the other three firms that were also bidding for it.

The company behind the construction of La Sagrera station is owned by the Ministry of Development through its companies Adif, which holds a 37.5% stake, and Renfe, which owns another 12.5% stake. The Town Hall of Barcelona owns 15% and La Generalitat the remaining 25%.

Original story: Europa Press

Translation: Carmel Drake

Blackstone Crowns its Position as the Largest Property Owner in Spain

18 September 2018 – Cinco Días

Blackstone likes Spain. And specifically, the Spanish real estate market. In recent years, the fund manager has made several large purchases linked to property in the country, displaying its enormous financial capacity to handle operations of any size.

In fact, the fund has now become the largest real estate owner in Spain, where it owns assets worth more than €20 billion, according to the figure compiled by Europa Press, placing it well ahead of the largest Socimis, such as Merlin (€11.785 billion) and Colonial (€11.19 billion).

The fund quickly saw an opportunity with the Testa operation, given that some of the shareholders wanted to exit the company, such as the clear case of Merlin, and the willingness of Santander and BBVA to sell.

The acquisition of 50.01% of Testa Residencial from Merlin, BBVA and Santander for €948 million – an operation that is still open to the other shareholders – followed the very recent purchase of the Socimi Hispania, a transaction worth more than €1.9 billion. Initially, Blackstone agreed to acquire the 16% stake owned by the investor George Soros, and then it launched a takeover bid for the rest of the company. In that case, it acquired 46 hotels, which were added to the 15 it had already acquired from Sabadell and whereby the largest owner of rooms in Spain was born.

In July, Blackstone acquired a logistics portfolio from the Socimi Lar España for €120 million. And recently, it was revealed that Blackstone and Centerbridge had teamed up to submit an offer for Santander’s headquarters in Boadilla del Monte (Madrid) amounting to €3 billion, in a bid that ended at midnight yesterday.

In Spain, Blackstone’s largest operation was undoubtedly the purchase from Santander of 51% of Popular’s real estate business for €5 billion. But that was not its only bank-related deal. It also acquired the portfolio linked to the property of the now extinct entity CatalunyaCaixa. The fund created the company Anticipa Real Estate to manage those toxic assets and it has been putting some of those foreclosed homes up for rent through its various Socimis: Albirana and Torbel (flats acquired from Sabadell), which are both listed on the Alternative Investment Market (MAB).

Moreover, one of Blackstone’s first operations was also one of the most contested politically by the leftist groups, when in 2014, it acquired 1,800 social housing properties from the Town Hall of Madrid for around €130 million – those homes currently form part of the portfolio owned by the Socimi Fidere.

Blackstone entered the property market in Spain in 2014 on the hunt for bargains following the crisis, firstly focusing on bank portfolios. But the recent acquisitions of Hispania and Testa take the US giant in another direction. There is enormous liquidity in the market, which has given a great investment capacity to these funds. Now, it is sounding out opportunities in which to invest in through its funds in real estate as an alternative to public debt with higher returns.

This New York-based firm, which is led by Stephen Schwarzman (pictured above) as its President and CEO, is the largest manager of real estate funds in the world, with $19.4 billion in assets under management, according to its results for the first half of the year.

Original story: Cinco Días

Translation: Carmel Drake

Corpfin Sells 13 Commercial Premises to Swiss Life for €83M

10 July 2018 – Idealista News

The Swiss do not only come to Spain to go on holiday. Through its real estate arm, the insurance company Swiss Life has purchased thirteen premises from the fund Corpfin Capital Prime Retail Assets (Ccpr) for €83 million.

The sales have been carried out through the two Corpfin Socimis that are listed on the Alternative Investment Market (MAB): Corpfin Capital Prime Retail II Socimi (Ccpr II) and Corpfin Capital Prime Retail III Socimi (Ccpr III). The contract for the sale of the portfolio was signed in June, according to Idealista News.

Swiss Life is investing in Spain for the first time. It already tried to enter the  Iberian real estate market with the acquisition of a package of offices from Hispania. The Socimi, which put that portfolio up for sale for €500 million, subsequently pulled out of the sale following the public takeover bid from Blackstone and the political instability in the country.

With assets worth €69.2 billion in the Pan-European market, Swiss Life focuses its investment in the office business, which accounts for 37% of its portfolio, followed by the residential business with 32%. Retail accounts for just 16% of its investments and the remainder of its portfolio is split between the logistics sector, the hotel segment and alternative assets.

In the case of Corpfin, the group founded by Javier Basagoiti created a new Socimi in April with €400 million to invest in high street stores. The roadmap for Basagoiti’s company involves raising €200 million this year to double the capital by the end of 2021.

Original story: Idealista News

Translation: Carmel Drake

BCA: How one Architecture Studio Became a Leading Player in Barcelona’s 22@ District

7 May 2018 – Eje Prime

Albert Blanch and Merche Conca founded BCA in 1994 without a portfolio of clients and working from the living room at home. 25 years later, the architecture studio is a leading player in Barcelona, where it has carried out projects with Socimis and funds such as Colonial, Lar and Blackstone, and has generated an assembly line in which thirty of its own professionals work on 45 projects each year. That number is the average that Blanch likes working with – “fifteen projects coming in, fifteen underway and fifteen being completed”, says the architect – who, from his office in the Sant Gervasi-Galvany neighbourhood, confirms to Eje Prime that, “when projects don’t come to your door, you have to go and look for them”. It was this approach that enabled BCA to overcome the crisis without leaving Barcelona and to grow its turnover by 200% over the last few years.

Proof of this is its presence in the 22@ district, the new fashionable neighbourhood for the tertiary sector in Barcelona. In the so-called technological hub of the Catalan capital, a melting pot for large office projects being developed in the city, BCA has worked on fifteen jobs, including the Cornerstone building, the UA1 property and Torre Pujades (…).

But in order to handle this volume of buildings in the most rapidly growing prime area of Barcelona, BCA has had to win the trust of various real estate players over the last two decades. Once again, Blanch refers to his motto of not waiting for the opportunities to come to you. In this way, he and Conca launched their studio with clients that were “very important but with very small projects, including several in the banking sector”, says the architect. Leading entities in Cataluña such as La Caixa and Banco Sabadell backed their firm, which started out designing bank branches, “a product that its very limited from an architectural point of view but for which there was a lot of demand at that time and that guaranteed us income to allow us to survive”, adds Blanch.

That specialisation carried out by BCA also boosted the growth of the studio. Heads of the banks that they worked with recommended Blanch and Conca to their superiors for most high-profile projects such as entire buildings and regional offices, but “combining these larger jobs with the bank branches, that was our formula for success”, says the architect.

The remodelling of Vía Augusta, 21 for Colonial launched them into the office sector 

The next success story came with the complete remodelling of a building owned by Colonial on the corner of Vía Augusta and Diagonal, in the heart of Barcelona. That project, which was completed in 2000, “really put us on the map in the office sector”, says Blanch. More than one property developer and fund called at BCA’s door after that and allowed the firm to participate in larger projects (…).

Following the building on Vía Augusta 21, many more projects emerged, mainly in Cataluña but also in Madrid, the Community of Valencia, Navarra, Murcia, the Canary Islands and Aragón. And BCA does not only survive on offices. The studio also carries out projects in the residential, hotel, facilities and urban planning sectors (…).

Like many other large architecture studios, BCA has also undertaken work at airports. The firm won a public tender to expand Terminal C at El Prat (…).

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

Vitruvio Doubles its Real Estate Portfolio to €107M

1 May 2018 – Expansión

The Socimi is growing its real estate portfolio following the integration of CPI (the investment vehicle of Banca March’s manager), the entry of the Borbón family and several purchases.

The Socimi Vitruvio closed last year with a 91% increase in profits and a 95% leap in revenues. “Vitruvio closed a very positive 2017 with a 130% increase in EBITDA, and the doubling of its size, as well as of its number of properties and tenants. And all of that, whilst maintaining a very low level of indebtedness: from 35% in December to 24.6% at the end of the first quarter”, highlighted Joaquín López-Chicheri, CEO of Vitruvio.

This outstanding growth is due, to a large extent, to the integration of CPI, a real estate investment vehicle created by Consulnor (the manager in which Banca March holds a 48% stake).

The agreement, which was closed at the end of 2016 and formalised during the second quarter of last year, involved the incorporation of around twenty properties into Vitruvio’s portfolio, which closed the year with 36 assets worth €107 million. “We doubled the number of assets in the portfolio and their value between 2016 and 2017. Moreover, the average appreciate in the value of the portfolio was 7.85%, plus dividends”, explained the senior executive.

Dividend

In total, the listed real estate company (which has been trading on the MAB since July 2016) recorded revenues of €4.1 million, an EBITDA of €2.3 million and a profit of €1.1 million.

On 11 May 2018, Vitruvio is going to pay an interim dividend of €0.05 gross per share against its profits for 2018, as part of its quarterly dividend payment policy. In 2017, it paid 15% more than expected, distributing dividends amounting to €1.014 million in total.

“Vitruvio is the Socimi with the most disperse shareholding, excluding the Socimis owned by banks, with 206 shareholders at the end of 2017 and 284 as at 31 March 2018”, said López-Chicheri.

Currently, Vitruvio’s real estate portfolio is split between residential (38%), commercial (28%), offices (22%) and logistics assets. By location, 78% are situated in the central area of Madrid capital, 10% in Vizcaya and 4% in Barcelona.

Brand new projects

Following the strong results recorded in 2017, the Socimi plans to continue its good run, with a further increase in revenues, thanks to the incorporation of two high-profile assets, which are currently undergoing renovation: Sagasta 24 (pictured above) and Fernández de La Hoz 52, where building work is going to be completed this month (May). “The rental of both buildings is going to multiply turnover next year. In the case of Sagasta, we expect revenues to increase by four-fold, whilst in the case of Fernández de la Hoz, where the investment has been much lower, we estimate that the increase will be 1.7 times”.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

A Family Office Buys a Mixed-Use Building in Centre of Barcelona for €7M

19 April 2018 – Mis Locales

The real estate consultancy firm Laborde Marcet has brokered the sale of a building for more than €7 million in the heart of the El Raval neighbourhood, in the district of Ciutat Vella. The property, located at number 18 Carrer Sant Rafael, has been purchased by a local family office.

Completely renovated, the building comprises five commercial premises and homes spanning around 70 m2 each, most of which are furnished. The average price per square metre exceeds €3,300/m2 and the yield amounts to 3.5%.

Gerard Marcet, founding partner at Laborde Marcet, says that “these types of buildings enjoy the locations, yields and prices that fit perfectly with the objectives of many investors. They are safe assets and so they are not associated with property speculation or very high returns and risk, but rather they are suited to investors who want good stable properties that will generate fixed returns and protect their wealth against future inflation rises, given that the rents are linked to variations in CPI”.

Ciutat Vella, a district that forms part of El Raval, attracts many operations for both the purchase of buildings and the purchase and rental of commercial premises. In fact, a vast proportion of the operations brokered by the Retail team at Laborde Marcet are located in that area of the city. In this way, over the last year, the consultancy firm has advised large brands from the beauty, fashion and restaurant sectors, such as Primor, Visionario, Toni Pons, Aragaza, Celeste, Change Group, ARTEspañol and The Ranch SmokeHouse for the rental of premises in strategic areas of Ciutat Vella.

Original story: Mis Locales

Translation: Carmel Drake