Funds, Socimis, El Corte Inglés & Seur Compete in the Urban Logistics Segment

9 March 2019 – Expansión

Investors and logistics operators alike are setting their sights on urban hubs to benefit from the boom in e-commerce. According to data from CBRE, investment in the logistics sector is thriving – it amounted to €2 billion in 2017, €1.5 billion in 2018 and is forecast to reach €1.2 billion in 2019. Active players in the sector include the Singapore sovereign fund through its Socimi P3, Blackstone, Prologis, Logicor, CBRE GI and Montepino, and Merlin, amongst others.

Urban hubs are gaining significant weight in the sector thanks to their ability to reduce transport costs, avoid the new traffic restrictions and resolve the problem of product returns.

According to the CNMC, Correos and Correos Express currently deliver 44% of all packages in Spain, followed by MRW and Seur (14% each) and DHL (4.5%).

In terms of retailers operating in this space, Amazon set the ball rolling by opening a logistics centre in the heart of the Eixample district of Barcelona and in the Méndez Álvaro area of Madrid. Other large retailers are following suit by opening distribution centres inside major cities, such as Decathlon, MediaMarkt, Ikea, Aki, Carrefour and Worten.

The investment firm Azora has also announced its intention to invest €250 million in logistics hubs in urban centres, which it will lease to delivery specialists such as Seur, DHL and MRW. Seur already has eleven urban logistics centres and plans to open another nine this year. Meanwhile, DHL already has ten such hubs and plans to open two more this year.

In the same vein, the department store giant El Corte Inglés has also launched an ambitious omnichannel logistics strategy, which will convert its 94 shopping centres into storage points for the management of online purchases.

Original story: Expansión (by I. de las Heras & R. Arroyo)

Translation/Summary: Carmel Drake

Corestate Acquires 24 Commercial Properties for €212M

9 November 2018 – Eje Prime

Corestate has acquired a portfolio of retail assets. The Luxembourg-based fund manager has purchased 24 commercial properties, located in 17 German cities, for €212 million. The properties comprise a total surface area of 100,000 m2.

The tenants of these assets include retailers such as New Yorker, Rewe, Müller and Dm. With this operation, Corestate is fulfilling its latest investment program launched in April, through which it plans to invest €250 million in total, according to reports from Property EU.

“Our investors are still convinced by the success of retail assets in the pedestrianized areas of medium-sized and prosperous German cities”, said Thomas Landschreiber, co-founder of Corestate. “We will continue with this focus and we will also diversify our range of products in the retail sector with more investment programs”, he added.

Corestate arrived in Spain in 2015 hand in hand with the Villar Mir Group, but it has a long history in markets such as Germany, where it owns 6,000 beds in student halls of residence. The company’s investments include retail assets (with premises on the high streets of medium-sized German cities), offices, residential and micro-flats.

Original story: Eje Prime 

Translation: Carmel Drake

CBRE: Investor Interest in High Street Stores Skyrockets

5 July 2018 – Cinco Días

Stores on the most commercial streets of Spain have become an object of desire for investors in the real estate market. Large funds and insurance companies alike are investing in these types of assets and experts predict that a new record is going to be set in the segment this year.

Investors are expected to spend around €1.1 billion on these types of commercial premises in 2018, according to forecasts from the consultancy CBRE. That figure would exceed the amount invested in high street stores in 2017 by €300 million, equivalent to a growth rate of 36.9%. Of interest are shops on commercial thoroughfares such as c/Preciados and c/Serrano in Madrid and Paseo de Gracia and Portal de l’Àngel in Barcelona. In fact, those two cities accounted for 79% of total investment last year. “Nevertheless, other cities in Spain are on the rise and there is growing demand for investment products in cities such as Bilbao, Valencia, Sevilla and Málaga”, according to the report “The Keys to Retail in Spain”, published by CBRE yesterday.

Investors regard these types of well-located assets as a good option for placing their money, a solid alternative in the context of low-interest rates and because these high street stores perform better (than other commercial assets) in the face of competition from online retailers. Currently, according to CBRE; the returns on these properties amount to 3.5% in Barcelona and to 3.25% in Madrid; in other cities (with more risk), the returns are greater.

The stars of these acquisitions are mainly the large funds. Hines, M&G, AEW, Thor, Union Investment, CBRE GI and Deka. “In 2017, in addition, an insurance company entered the high street sector for the first time: Generali acquired the Pull & Bear store on Calle Preciados in Madrid”, according to the report. Other active players include the Socimis, such as Tander, Ores, and Silicius, which have started to express interest.

In terms of large operations so far this year, in January, the German fund Deka acquired 16 Inditex stores for €400 million. Another significant operation was the acquisition of Mercado de San Miguel by the Dutch fund Redevco, for €70 million.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

British Fund Buys Modoo Shopping Centre in Oviedo from Alpha Real Capital

22 January 2018 – Eje Prime

The shopping centre that Calatrava designed for the heart of the Palacio de Congresos in Oviedo has a buyer. Modoo, owned until now by Alpha Real Capital, has been acquired by a British investment fund. Created by the famous architect Santiago Calatrava, this complex is located in the Buenavista neighbourhood of the Asturian capital.

The sale and purchase negotiations have also resulted in the arrival of a new manager for Modoo in the form of Estabona Management, which has already announced its plans to renovate the shopping centre, as well as to add a cinema and include more spaces. The operation, led by Estabona, was signed on 31 December 2017, the last day of the period set to agree a sale, according to reports from La Nueva España.

Located in the upper area of Oviedo, inside the city’s Palacio de Congresos, the complex was acquired by Alpha Real Capital in 2014, when it purchased the property from the Dutch firm Multi Development.

Estabona, which already has a presence in Spain in the Albacete Imginalia shopping centre, has proposed a renovation plan for Modoo. The shopping centre has a surface area of 40,000 m2 and is home to renowned retailers such as Primark and El Corte Inglés. This will not be the first space restructuring that has been requested for the shopping centre, given that Alpha Real Estate and its former managers, JLL, tried to incorporate a cinema and make significant changes to the land in the past, but that construction project never got off the ground.

Original story: Eje Prime

Translation: Carmel Drake

Bankia & Apollo Go To Court Re Sale Of Finanmadrid

3 October 2016 – Expansión

Both entities are waiting for the discrepancies that arose from the sale of Finanmadrid to be resolved. The sale was completed in 2013 for €1.6 million

Fracciona Financiera Holding, the subsidiary of Apollo, filed the first lawsuit, in which it claimed €8.5 million from Bankia due to discrepancies in the sale and purchase contract based on the determination of the sales price for Finanmadrid.

The contract included clauses that have an impact on the basis of the evolution of various parameters. These conditions have been common in multiple sales operations closed in the financial sector since the outbreak of the crisis. The asset protection schemes (EPA), which cover the buyers of former savings banks, are the most visible example of these types of operations.

Bankia has responded to the lawsuit filed by Apollo, with its own claim for €6.4 million.

Finanmadrid, which used to specialise in offering consumer credit through retailers and car dealerships, has now been integrated into Avant Tarjetas, a subsidiary of Evo Banco, controlled by Apollo. Previously, it was integrated into Fracciona Financiera Holding. In the company’s accounts from last year, the audit report explains that “in the opinion of the company’s legal advisors, an unfavourable outcome from the lawsuit (with Bankia) is remote, nevertheless, the shareholder (Apollo) would financially support any contingency that may arise in the event that no provision has been recognised”.

Before the integration, Finanmadrid reduced its share capital by €2.24 million to absorb losses and so it was left at €2.79 million.

Apollo’s claim against Bankia forms part of a broad range of claims against the entity chaired by José Ignacio Goirigolzarri. In total, the bank faces claims amounting to €390 million, not including the claims relating to its debut on the stock market and the sale of its preference shares.

Claims

The largest claim, amounting to €165 million, is one presented by ING Belgium, BBVA, Santander and Catalunya Banc against Bankia, ACS and Sacyr. (…).

The construction group Rayet also claims €78.2 million from Bankia for what it considers are accounting irregularities and for differences in the valuation of plots of land linked to the debut of Astroc on the stock market in 2006, an operation piloted by the former Caja Madrid.

The bank has 305 legal proceedings open relating to derivatives with claims amounting to €38.8 million.

Original story: Expansión (by E. del Pozo)

Translation: Carmel Drake

Ivanhoé Puts Madrid’s Xanadú Shopping Centre Up For Sale

14 September 2016 – Cinco Días

It is going to be one of the largest operations in the real estate market. The Canadian giant Ivanhoé Cambridge has begun the process to prepare the sale of the Xanadú de Arroyomolinos shopping centre (in Madrid), one of the largest five shopping centres in Spain. The aim is to close the transaction during the first half of 2017.

Several real estate brokers have already registered their interest and, in turn, have started to sound out potential investors with high purchasing power, given that it is expected that the operation price will exceed €500 million; that would represent a record figure for a transaction involving a shopping centre in Spain.

Madrid Xanadú was inaugurated in 2003. The property was developed by a joint venture between the US multi-national The Mills and the Spanish company PGC (Parcelatoria Gonzalo Chacón), which sold its stake to its American partner a year later. The real estate company Ivanhoé Cambridge acquired the centre in 2007 for €770 million, in an operation that included two other retail complexes in the UK and Canada.

Located 29 km away from the centre of Madrid, Xanadú was an innovation more than a decade ago as it included an artificial ski slope, open all year round. The centre has a gross leasable and leisure area measuring 152,000 sqm, exceeded only by Puerto Venecia (Zaragoza), Marineda City (A Coruña) and Parquesur (in Leganés, Madrid), according to data from the Spanish Association of Shopping Centres and Retail Parks (AECC). The centre is home to range of stores including the Inditex group, H&M, Apple and Primark. Hipercor and El Corte Inglés also have shops there, although those assets would fall outside of this transaction.

The search for investors

Various source in the sector have confirmed that Ivanhoé Cambridge has commissioned the US real estate broker Eastdil Secured to start designing the sales process. It is likely that the firm will look for a partner with a presence in Spain (one of the large specialist consultancy firms) with more knowledge of the local market. The aim is that the process to look for possible buyers will begin between October and November so that an agreement can be reached from the beginning of next year onwards.

Eastdil Secured was in fact responsible for selling the Diagonal Mar shopping centre in Barcelona this summer to Deutsche Bank for €493 million, in a record deal that demonstrated investors’ confidence in the economic recovery in Spain and in the local real estate sector after the harsh years of the crisis, which began in 2008.

Expected to fetch at least €450 million

The various sources disagree with respect to the possible price of this asset, saying that it could range from €450 million to more than €500 million. In its favour, this shopping centre is one of the largest in the country, it houses many of the major retailers, and it also offers a vast leisure space. But, unlike Diagonal Mar, it is a long way from the city centre. Meanwhile, a spokesman for Ivanhoé Cambridge explained that the firm does not comment on “market speculation” about the investment strategy.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Investment In Shopping Centres Exceeds €1,000M In H1 2015

1 July 2015 – El Confidencial

During the first three months of 2015, investment in shopping centres tripled to €520 million, compared with the €150 million recorded during the first quarter last year. In fact, in barely three months, the figures exceeded the sum of those recorded between 2010 and 2013. As such, the sector will close the first half of the year with total investment of just over €1,000 million and will reach €3,000 million within 19 months.

Those are the forecasts made by the consultancy Knight Frank, which expects that 2015 will close above the historical average, but that the investment volumes seen last year will not be repeated.

“Whilst 2014 and 2015 so far have been characterised by investment in prime shopping centres, of considerable size, the next few months will see investment opportunities involving smaller, core plus and value add products, in secondary cities”, says Elaine Beachill, Capital Markets Manager at Knight Frank. “Over the last 18 months, activity has focused on the best streets and areas of Madrid and Barcelona, but from now on, we will see transactions right across the country”.

In terms of the performance of shopping centres, Knight Frank highlights the strong results of smaller local centres, located in urban areas and secondary cities with a significant area of influence. The segment least affected by the crisis has been the prime High Street. Rents in retail stores on the main streets have remained stable and they have experienced low vacancy rates. “In fact, there is a significant shortage of space on the prime High Street and when a store becomes available, it is leased out very quickly”, says Félix Chamizo.

Nevertheless, established secondary sites – traditionally in less demand – have been the first choice for certain foreign brands setting up in Spain for the first time. That is the case of Hema, Dealz, Tiger and the Chinese retailers Mulaya and Okeysi. There is growing interest from retailers and investors in the area around la Puerta del Sol. Projects in the surrounding area, such as Canalejas, indicate a possible increase in rents in the area and certain retailers are already taking up position.

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake