C&W: Retail Rents Rise By 2% In MAD & BCN

17 August 2016 – Expansión

The recovery of the Spanish economy is causing demand for retail premises on the main streets of Madrid and Barcelona to increase, according to the latest quarterly Spain Country Snapshots report published yesterday by the advisor Cushman & Wakefield.

The real estate services company indicates that, taking into account the lack of available space in the prime areas of both cities, it is noteworthy that tenants are willing to pay higher rents in order to retain good locations.

The report also states that whilst rental prices have stabilised in the retail sector in general, they have increased by 1.9% in the prime areas of Madrid over the last year.

In addition, the report forecasts the opening of approximately 340,000 sqm of space dedicated to retail during the second half of the year across Spain. The new space will mainly be concentrated in three new shopping centres.

Good figures

Meanwhile, in the logistics market, Barcelona has reported some “outstanding” figures in terms of the leasing of space thanks, primarily, to the long-term project involving the implementation of Amazon’s logistics plant in Prat de Llobregat.

With this space, which measures 60,000 sqm, the city saw 161,000 sqm of space leased during the second quarter of 2016. The figure is similar to that reported in the same period in 2015 but contrasts with the 34,000 sqm of space leased in Madrid, according to data from the agency.

Cushman & Wakefield said that the forecast growth of the economy will have a positive impact on occupancy rates over the coming months.

In addition, it expects several operations to be signed before year end, after they were delayed from Q2.

Original story: Expansión

Translation: Carmel Drake

ABC Serrano Completes 2 Year Refurbishment

21 July 2016 – Expansión

After almost two years under refurbishment, the ABC Serrano shopping centre in Madrid, the former headquarters of the ABC newspaper and a property with more than one hundred years under its belt, is ready to secure new brands, attract younger customers and compete with the fashion houses and restaurants along Madrid’s golden mile.

The shopping centre, which has a retail surface area of 14,000 sqm and 255 underground parking spaces, spread over four floors, is accessible from both Paseo de la Castellana and Calle Serrano.

The co-Presidents of IBA Capital Partners, Thierry Julienne and Jesús Valderrama, explained in an interview with Expansión that, since the architect Mariano Bayón was commissioned in the 1990s to completely renovate the building and convert it into a shopping centre, ABC Serrano has not undergone any remodelling. “We have brought a sleeping beauty to life. It is another step in the regeneration of the city centre”, said Julienne.

The construction work, which began in Q4 2014 and which will be completed in September, had a budget of €15 million and has been complex. Firstly, because the building is a listed property for the purposes of cultural interest and, also, because the remodelling process has been undertaken in the presence of tenants and shoppers. “We have maintained an open dialogue with the Town Hall, which has guided us a lot”, explained Julienne.

The construction work at ABC Serrano, which has been owned by CBRE Global Investment Partners since February 2016 and in which IBA Capital participates as a shareholder and the manager of the asset, has focused on improving access between the floors and redistributing the retail space.

In this way, the flights of stairs have now been unified into a single core. In addition, the dome of the building, which was previously covered over, has been turned into a huge skylight allowing natural light to enter the building.

The construction work, which has been led by the architecture studio L35, will allow the shopping centre to secure new brands, attract customers on the weekend and improve the profitability of the asset. “We reject offers from tenants that do not fit with the centre’s image”, explained Julienne.

The co-Presidents of IBA indicated that the shopping centre, which has an occupancy rate of 70%, has signed new lease contracts with Habitat, which will open its new flagship store in a 900 sqm unit; as well as with a hand and footcare specialist D-Uñas, and Zooo-Huawei, the official technical service company of Huawei and Sony. In addition, tenants such as Neck&Neck, El Armario Francés, Sebago, Luis&Tachi, Lujans, Viena Capellanes and Calzedonia, amongst others, have renewed their contracts. “This is a trophy asset, both in terms of the location and because it is an iconic building with a new image”, said Valderrama.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Axiare Buys Four Retail Outlets In Almería For €20M

19 April 2016 – Valencia Plaza

Axiare Patrimonio has purchased four retail outlets in the Viapark retail park, located between Almería and Roquetas de Mar, for €20 million, according to a statement made by the Socimi to Spain’s National Securities Market Commission (CNMV) on Monday.

These four outlets, which have a combined gross leasable surface area of 15,745 m2 and more than a thousand parking spaces are leased in their entirety to Decathlon, Carrefour, Bricomart and Kiabi.

The Socimi has highlighted that these retail spaces have “excellent” visibility, are easily accessible from the A7, the Mediterranean Highway, and are located in an area of “limited” competition, which comprises a population of approximately 385,000 inhabitants, which increases during the holiday season.

The CEO of Axiare, Luis López Herrera-Oria, highlighted that, with this operation, the company is strengthening its presence in the retail outlet segment and is continuing to pursue its strategy focusing on offices.

Following this acquisition, the total investments made by Axiare increase to almost €900 million, with a portfolio of 31 assets in the Spanish real estate sector. 72% of the properties in its portfolio are offices, 14% are logistics platforms and 14% are primarily retail outlets.

For this operation, Axiare has been advised by Aguirre Newman for commercial matters and Gómez-Acebo & Pombo, Malcolm Hollis and Cushman & Wakefield in the due diligence process, meanwhile, Solvia has managed the sale of the properties on behalf of one of its clients.

Original story: Valencia Plaza

Translation: Carmel Drake

Retail Outlets On Secondary Streets Are Getting More Expensive

1 April 2016 – Expansión

Secondary commercial streets in Madrid and Barcelona are increasing in value and becoming an alternative to the traditional main streets, which often have low rates of availability and prohibitively expensive rents.

According to a study by Cushman & Wakefield, rather than opening stores in smaller cities, major brands prefer to expand their businesses into secondary streets in the main cities such as Madrid and Barcelona. According to the consultancy firm, in 2016, rental prices will increase by the most in these secondary streets, where prices have been stable and in some cases, have even decreased, in recent years.

The best example of this trend has been observed on Avenida Diagonal in Barcelona, which after a major regeneration has widened the size of its pavements, and so now represents a viable alternative to the main streets such as Paseo de Gràcia and Rambla Catalunya. In the renewed section of this shopping street, rents rose by 33% in 2015 to amount to an average of €55/m2/month.

La Diagonal thereby ranks in third place on the list of shopping streets in Europe where prices have increased the most, behind Via Montenapoleone, in Milán, (41.2%) and Via Condotti, in Roma, (37.5%).

The study also reveals a recovery in the rents of retail premises in other secondary cities in Spain, although in this case, for the time being, those increases have only been seen in the prime shopping streets. The greatest increases have been recorded in those cities that benefit from tourist with high purchasing power, such as Palma de Mallorca, Puerto Banús, Sevilla and Valencia.

Cushman & Wakefield includes retail premises from the main cities in Spain amongst the main focuses for European investment, alongside Germany, Sweden and Portugal.

Original story: Expansión (by M. Anglés)

Translation: Carmel Drake

Drago Buys Banco de Andalucía’s HQ For €25M

31 March 2016 – Expansión

Banco Popular has handed over the keys to Banco de Andalucía’s former headquarters to Drago Capital and a private Spanish investor. Yesterday, the parties signed the acquisition of the property, which had been up for sale for several years, for €25 million.

With a surface area of almost 8,300 m2, the building is located in the heart of the city, next to Avenida de la Constitución and Plaza Nueva.

Drago Capital will manage the renovation of the building itself to convert it into a hotel, which will open on the upper floors. It will also create a retail space with approximately 2,000 m2 of gross leasable space on the ground floor and mezzanine level.

According to sources at the company “the operation will contribute to the on-going regeneration of the area, one of the most iconic in the Andalucían capital”.

MacPherson Consultores will handle the marketing of the retail outlets, after “observing a great deal of interest for this location from major fashion brands and restaurants”, they added.

Original story: Expansión

Translation: Carmel Drake

Merlin Buys Galp’s HQ & Another Property In Lisbon For €103M

15 March 2016 – Expansión

The Socimi Merlin Properties has purchased two properties in Lisbon, one of which is leased in its entirety to the oil firm Galp, for a combined total of €103 million, and has whereby strengthened its presence in the Portuguese capital, where it has an office portfolio comprising three buildings with a total leasable surface area of 42,842 m2.

The real estate company has explained that the acquisition price was fully paid down using own funds, and so the acquisition will generate an initial gross yield of 7.4% and an initial net yield of 6.5%.

Specifically, Merlin has acquired the Monumental building (pictured above), located in Plaza Duque de Saldanha – in the heart of the city’s financial district -, with a total leasable surfacea area of 22,387 m2, comprising offices and retail space. 89% of the offices are leased, to domestic and international firms, such as KPMG, Marsh and Mercer. Meanwhile, the retail area has 41 outlets.

The other property it has acquired is the Torre A Building, with a surface area of 13,715 m2, spread over 16 floors and leased to Galp under a long-term contract. Torre A forms part of another office complex, which contains eight buildings that have a surface area of more than 70,000 m2 and 1,683 parking spaces.

Merlin, which focuses on the Iberian market, made its debut in Portugal last June with the acquisition of an office building in Lisbon for €18 million.

The office building, located in the Expo area, is fully leased to Novabase. Meanwhile, Fidelity has notified the CNMV that it holds a 3.55% stake in Merlin, which is worth €117 million at the current share price.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

ECI Puts 200 Properties Up For Sale For €1,000M

1 March 2016 – Expansión

Launch of Operation Batman / At the end of March, the retail giant will start to sell off dozens of logistics assets, supermarkets, offices and plots of land, in an effort to reduce its level of debt.

El Corte Inglés is making progress with its plan to divest its non-strategic real estate assets, in an effort to reduce its debt, with the launch of a huge real estate asset sales process. The retail giant is planning to put the For Sale sign up over a batch of 200 properties with an approximate value of €1,000 million.

This batch of assets includes up to 102 supermarkets – some of which are operational, whilst others are closed – , 32 logistics assets, which cover a surface area of 500,000 m2 and several plots of land. It also includes 50 high street retail outlets, with a combined surface area of 180,000 m2, and 20 office properties located in Madrid and Barcelona.

The process, dubbed internally as Operation Batman, is being coordinated by Morgan Stanley, which has collaborated with the El Corte Inglés in other operations. Meanwhile, Clifford Chance is responsible for providing legal advice.

According to sources close to the operation, the company intends to put this portfolio of assets up for sale at the end of this month. For the time being, the company has commissioned the valuation of the properties, with a view to receiving the first non-binding offers on 16 May and the definitive offers by the middle of July. The objective of Dimas Gimeno, the President of the El Corte Inglés, is to complete the asset sales before August.

The upcoming operation is attracting growing interest in the market. Most of the large funds, insurance companies and even some of the larger Socimis have expressed their interest in participating in the auction.

The company will accept offers for all of the properties, as well as for separate lots, if the potential purchaser is interested in buying, for example, only those assets linked to the logistics operations, the supermarkets or the offices. El Corte Inglés is not including the joy of its logistics crown in the lot: its megacentre in the south of Madrid. Nor is it willing to divest Torre Titania, or its historical headquarters in Hermosilla. (…).

Original story: Expansión (by R. Ruiz/A. Antón)

Translation: Carmel Drake

Deloitte: Retail Assets Threaten Office Dominance

25 February 2016 – Expansión

Office buildings, which were the kings of the real estate investment market in 2015, may be knocked off their throne this year by the shopping centre and retail outlet segment.

Last year, investment in Spanish real estate assets increased by 37% in total, to amount to €11,700 million. 57% of those assets were located in Madrid and 45% (of the total) were office buildings.

However, according to a report prepared by Deloitte, negotiations are currently underway for the sale of real estate assets worth €6,000 million, and 58% of those assets are shopping centres and prime retail outlets.

According to Javier García-Mateo, Partner of the Financial Advisory team at Deloitte, “the real estate investment market is showing some very positive signs: there is currently around €8 billion of foreign capital seeking profitable properties in good locations, with potential for rent increases”.

The volume (of investment recorded) in 2015 is going to be hard to beat, primarily, because it was an exceptional year in terms of the size of the assets that were put up for sale. “The owners of large assets took advantage of the abundance of capital to put their properties up for sale, such as in the case of Torre Espacio. But it is not typical for so many properties of that size to be sold in the same year”, he said.

At the moment, the sales of numerous first-rate shopping centres and retail premises are being negotiated, “but none are on the same scale as the Plenilunio sopping centre, which was sold last year for €375 million; all of the assets have asking prices of less than €100 million”, confirmed García-Mateo.

Purchaser profile

With the return of more traditional funds to the Spanish real estate market over the last two years, the opportunistic investor has been losing influence and currently accounts for just 7% of purchases. Forecasts indicate that the majority of investments will be made in core and core+ assets in 2016. According to Deloitte’s report, buildings that need renovating and to find a tenant in order to generate added value are also included within that 7%.

The study also reveals a significant shift in the market for financing. According to Ana Granado, Senior Manager in the Financial Advisory team at Deloitte, “domestic banks have eased their financing conditions significantly, for both offices and shopping centres, as well as for logistics assets, regardless of whether they are located in prime areas or secondary regions”. Costs are lower; the level of indebtedness is higher; and the (repayment) terms are longer, say the sources at Deloitte.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Mapfre Sold 45 Properties Worth €34.5M In 2015

23 February 2016 – Expansión

Mapfre is taking advantage of the emerging recovery of the Spanish real estate sector to accelerate the disposal of non-strategic assets from its investment portfolio. And, as a result, increase its economic return from the sale of homes, premises and offices, amongst others.

Last year, the insurance company sold 45 properties of different types for €34.5 million in total, according to its annual report submitted to the CNMV. The gross profit from these transactions amounted to €11.3 million, more than twice the amount recorded a year earlier from similar operations. In 2014, Mapfre reported profits of €4.5 million from the sale of properties.

The main asset sold in 2015 was a plot of land in Cotochico, Marbella (Málaga), which was disposed of for €12.2 million. Mapfre also sold the San Javier and San Antonio clinics in Bilbao for €4 million and €3.3 million, respectively. The other 42 properties sold by entity were “minor, non-significant assets”.

On the buy-side, the insurance group did not pass up the opportunity to acquire several iconic buildings. As such, it invested €82 million in the acquisition of a property in Madrid’s Plaza de la Independencia, 6. And, outside of Spain, it bought an office block in One Winthrop Square in Boston (USA) for €55 million. At the end of 2015, Mapfre held a property portfolio worth €2,267.7 million, which represented 4.9% of the entity’s total investment portfolio, which in turn amounted to €46,264.7 million and mainly contained sovereign debt (57.1%) and corporate fixed income (22.5%).

€943.4 million (41.6%) of the Group’s real estate portfolio related to facilities that it makes use of itself, in other words, retail outlets and offices that provide support to the insurance company’s administrative and commercial network. The remaining 58.4% (€1,324.3 million) comprises every kind of asset, available for sale and rent. The occupancy rate of its properties for rent increased slightly with respect to the previous year, to 85.9% at the end of 2015 (compared with 85.5% in 2014).

Unlike other investments in its portfolio, some of Mapfre’s properties are accounted for at book value, i.e. at acquisition cost, and not at market price. Thus, the group calculates that it has unrealised gains of €975 million. Meanwhile, the Group says in its annual report that “the unrealised gains will offset a decrease in property prices equivalent to approximately 30.06% of their own market value”.


Mapfre clarified to the CNMV that the Brazilian CEO, María Leticia de Freitas Costas, has not signed the 2015 accounts yet “due to her inability to attend the Board meeting”, and not because of any kind of disagreement.

Original story: Expansión (by M. Ponce de León)

Translation: Carmel Drake

Sareb To Allocate c.1,000 More Homes To Social Housing Stock

29 September 2015 – Expansión

The financial sector is continuing to make grand gestures towards society’s most underprivileged groups. Barely a week after the banks decided to add 4,000 homes to the Social Housing Fund (‘Fondo Social de Viviendas’ or FSV) taking the total number of homes to 10,000, Sareb is considering increasing its social housing stock by 1,000 to 3,000.

According to sources consulted, this possible increase comes at a time when almost all of the 2,000 homes that were initially allocated to the stock have been assigned.

Before the summer, Sareb had transferred just over 1,000 homes to Cataluña, Aragón, Galicia and País Vasco. But since then, negotiations with other autonomous regions, such as the Balearic Islands, Canary Islands and Castilla y León, have accelerated and an agreement is now close to being signed. Sareb is also holding talks with Castilla-La Mancha, Madrid, Cantabria and Comunidad Valenciana.

In addition to granting homes to autonomous regions for social purposes, the company led by Jaime Echegoyen (pictured above) is beginning conversations with several town halls, such as those in Madrid and Barcelona, to offer up homes in cases of emergency. The homes in question could be used by the town halls in the event that, for example, a building collapses or refugees arrive.

Help for entrepreneurs

Sareb has recently added a new initiative to its existing portfolio, with the aim of helping entrepreneurs. The company intends to implement a plan to offer cheap rents on retail premises and offices for new entrepreneurs. The plan would involve spaces being granted to certain corporate projects, with the tenants being required to cover the maintenance costs of the properties only. Sareb currently holds 3,500 retail outlets and offices on its balance sheet.

The drive from the banks to support social initiatives comes at a time when the rise of political parties such as Podemos is calling into question the banks’ activities, with measures such as the tax on empty homes introduced in Cataluña.

Besides its social initiatives, Sareb is also currently focusing on completing the migration of its assets from their former managers – entities that transferred homes and loans – to the new administrators: the platforms of Haya Real Estate, Altamira, Solvia and Servihabitat. This situation has caused a slowdown in house sales through the retail channel, but Sareb may offset that through the sale of large portfolios to funds before the end of the year.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake