Tag: return

Madrid’s Office Market in 2019: Stable Yields & Investment of €3bn

20 February 2019 – Eje Prime

Investment in offices in Madrid is on the rise. Total investment of €3 billion is forecast in the office market in the Spanish capital this year, which will see it maintain the yield for prime offices at 3.75%. In terms of office rents, a boom of 9.8% is forecast, along with a decrease in the availability rate, which is set fall from 11.6% in 2018 to 9% in 2021. Modest growth forecasts for the sector, with a lower supply of prime spaces, are going to contribute to an increase in rents.

With this data, Madrid is positioning itself amongst the capitals with the lowest yields on its luxury offices, with a figure comparable to those of Singapore (3.34%), Amsterdam (3.35%) and Paris (3%), but well below those of Moscow (8.5%) and Washington DC (6.2%), according to the Global Outlook 2019 report, compiled by Knight Frank.

In terms of the growth forecast for office rents, the Spanish capital is expected to maintain stable growth (…).

In terms of the availability rate, Madrid is forecast to decrease from 11.6% in 2018 to 9% in 2021, placing it amongst the cities with most available offices, well below Berlin, with a forecast rate of 2.2% (…). Available prime offices will also decrease, which will lead to a rise in rents. According to the study, this is the result of the recovery of the residential market, which is also sparking interest amongst investors.

One of the greatest opportunities in the sector are the coworking offices, which are transforming conventional offices into new spaces for working and incentivising employees. “Whilst some markets are reaching maturity, at the global level, we expect to see a boost to this business in 2019”, say the authors of the report.

In summary, the office market in Spain is expected to be relatively stable during the year ahead, despite global challenges (…).

Original story: Eje Prime (by Marta Casado Pla)

Translation: Carmel Drake

Merlin to Invest €500M to Double its Logistics Portfolio

15 February 2019 – Eje Prime

Merlin Properties is also joining the logistics boom. The real estate company is preparing a new development plan for warehouses and storerooms to double its existing logistics portfolio in Spain and Portugal over the next four years. The objective of the company is to incorporate an additional 1 million m2 into its portfolio in this sector with an investment of €500 million, according to reports from Cinco Días.

The real estate company, which forms part of the Ibex 35, already owns logistics platforms spanning 1.1 million m2, spaces that are leased to various operators in the sector. Currently, Merlin is developing the so-called plan Best II, scheduled for 2021, with the construction of 500,000 m2 of logistics space in Madrid, Guadalajara and Toledo, and it is already working on Best III, which sources at the company explain will add another 500,000 m2 by 2023, in that case also on land in Portugal.

With the construction of these warehouses, Merlin’s objective is to diversify its portfolio and improve its yield, given that these types of assets offer a higher return. Currently, the Socimi owns assets worth €11.8 billion, of which €780 million correspond to logistics properties, accounting for just 6.7% of the portfolio.

Original story: Eje Prime 

Translation: Carmel Drake

Excem to Promote 5,000 Luxury Homes in the Costa del Sol & Murcia

21 November 2018 – Eje Prime

Excem is increasing its commitment to the luxury residential sector. The company owned by the Hatchwell family has set itself the objective of promoting 5,000 luxury homes on the Costa del Sol and Murcia, within the context of the development of its LOV Real Estate division. To launch these homes, which will follow in the footsteps of a development on Calle Fuencarral in Madrid, Excem has created the brand Solomon Homes.

Excem’s plans with LOV Real Estate involve starting to promote its entire land bank in 2019. The first projects to be commercialised in the south include four promotions in Condado de Alhama, one of the best resorts on the Costa Cálida. In that complex, LOV has already started work on the construction of Villa Primavera, Villa Amapola and Villa Atardecer, as well as Edificio Poniente. The company plans to hand over those homes next summer.

Further south, on the Costa del Sol, the property developer is finalising the signing of several projects with “the same model of avant-garde and unique architecture” in the area, on the fashionable coastline of the Spanish residential market. The company expects to achieve a return of more than 20% in each of its projects.

The starting point for luxury

Nevertheless, Excem’s starting point with LOV Real Estate will be a 25-home development on Calle Fuencarral in Madrid. The group’s first development will involve an investment of €14 million and will be located at number 142 of the Madrilenian street, right in the heart of the Spanish capital.

The company has already started work and its pre-sales amount to 80% with just four homes left to market. The buyers include investors and architects, explain sources at Excem (…).

The property developer plans to handover those homes, which will have between one and three bedrooms, before the end of 2019. The homes will have surface areas ranging from 55 m2 to 175 m2, and prices starting at €400,000, and going up to €1.5 million (…).

Excem: true to its roadmap 

The last investment vehicle launched by Excem Real Estate, the real estate division of the Excem Group, was Siwork, specialising in co-working and for which the group has partnered with WeWork, as Eje Prime revealed. With Excem Capital Partners Siwork, the group stays true to its roadmap: to be present in the Spanish real estate sector with three Socimis, diversified by type of asset and focused on millennial clients.

The first of the three companies launched by the Israeli family in Spain was Excem Capital Partners Sociedad de Inversión Residencial. Specialising in rental housing aimed at millennials, the company debuted on the Alternative Investment Market (MAB) in July worth €17 million. Currently, the company owns 28 assets in Spain and has several shareholders ranging from private investors to business people and family offices.

Besides Excem Capital Partners Sociedad de Inversión Residencial, the Hatchwell family also operates in the Spanish real estate sector with Situr, a firm specialising in tourist properties such as apartments and hostels. The investment target for this second Socimi is approximately €250 million between now and the rest of 2018. The company has set itself the objective of having 3,500 beds in a dozen buildings, located primarily in Madrid and Barcelona, as well as in other tourist cities around the country.

With the activation of Siwork, the plans for this new company involve carrying out an investment of €200 million to acquire a dozen buildings in Spain’s main cities.

The Hatchwell family’s links with the real estate world date back to the beginning of the 1970s, when Mauricio Hatchwell Toledano founded the group, specialising first in cement and later in technology and real estate. Nowadays, the company is led by his children David, Philip and Kareen Hatchwell Altaras.

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

Socimi Vitruvio to Sale its Industrial Assets worth €12.8M

2 November 2018 – La Información

The Socimi Vitruvio, which focuses on the residential market, wants to take a new step on its journey and get rid of its industrial assets. In this way, the Socimi, which has Joaquín López-Chicheri as its CEO, will focus on the residential sector, above all, although without neglecting its commercial assets or offices. On the other hand, it will dispose of the least glamorous part of its real estate portfolio, its logistics warehouses.

This part of its business, worth €12.8 million, according to the company’s own accounts, generates a return of 9.3% – the highest of any of its divisions – and has an occupancy rate of 100%. Despite that, the company’s plans involve forgetting about these types of assets, which they consider to be “residual” and “non-strategic”.

“We have always thought that residential is the safest type of asset”, say sources at the company. On the other hand, they recognise that diversification is due, in large part, to the need to generate higher profits to access dividend payments to shareholders. “Residential has the capacity to generate a lower recurring return, unless you assume one more level of risk”, said the CEO of the firm.

Where are this Socimi’s industrial assets located? The firm led by López-Chicheri owns properties of an industrial nature in Mercamadrid and Yunquera de Henares, a town close to Guadalajara.

The first of them, located in the aforementioned distribution platform, has a market value of €2.82 million, which represents a price of €526/m2. The second, on an industrial estate in the town of Yunquera de Henares, Guadalajara has a market value of €5.2 million. That asset has a surface area of 13,587 m2 and a price of €381/m2.

The Socimi that now wants to divest the logistics component of its assets has a “patrimonialist” vision, according to its CEO. In this way, the firm has diversified its assets to reduce risks. “The portfolios that traditional patrimonialist firms have are normally distributed between residential, well-located commercial premises and offices. And that is what Vitruvio has”, said the executive.

This real estate investment company was constituted in June 2014, under the Socimi tax regime. Since then, it has undergone several capital increases – raising almost €30 million in total – to acquire assets and position itself ahead of its stock market debut.

The bell was rung in July 2016, two years after its creation, at a price of €12.63 per share and with 126 shareholders. Nowadays, Vitruvio’s shares are listed on the Alternative Investment Market (MAB) through the fixing system – with two daily auctions – at a price of €13.70 per share.

In January of that same year, the company carried out its largest capital increase to date raising €11.5 million. Thanks to that, the number of assets increased along with their value to exceed €100 million.

Original story: La Información (by Lucía Gómez)

Translation: Carmel Drake

Madrid Nuevo Norte’s New Offices will be Home to 125,000+ Employees

22 October 2018 – Eje Prime

Madrid Nuevo Norte, the focus of the recently announced new homes, is also going to be home to a business centre. Offices are going to be built in the financial epicentre of the Spanish capital to house 125,472 employees in total. Moreover, the district is going to be home to the tallest building in Spain, with up to seventy floors.

The project is going to house the Chamartín Business Centre, where almost all of the properties for businesses are going to be located. They will house two thirds of the 1.5 million m2 that are going to be dedicated to offices in Madrid Nuevo Norte, according to reports from Cinco Días.

The volume of business in terms of office development will exceed €10 billion; in the case of house building, that figure will reach €3.0 billion. The project’s economic report shows a range of profitability from the real estate business in the new district of between 11.2% and 16.4%.

After several adjustments, Madrid Nuevo Norte has decreased its total buildability by 21%, down from 3.37 million m2 per the initial plan to 2.66 million m2. Similarly, the district has been divided into four areas: Chamartín station, the business district, Fuencarral-San Roque-Tres Olivos and Fuencarral-Las Tablas. Each one will have its own timetable and urbanisation costs.

The project is going to be financed almost in its entirety by the landowners, which will disburse an average of €1.2 billion. With the aim of covering the urbanisation costs, the Town Hall of Madrid will spend €307.89 million, which will be added to €24.78 million from the Community of Madrid and €220.49 million from Adif, the concessionaire of the rights.

Original story: Eje Prime

Translation: Carmel Drake

MK Premium to Invest €8M in Asset Purchases in Barcelona

17 October 2018 – Eje Prime

MK Premium is focusing on Barcelona. The company led by the brothers Daniel and Sergio Leiva is going to invest €8 million in the acquisition of assets in the metropolitan area of Barcelona. With this commitment, the company will make its debut in municipalities such as L’Hospitalet de Llobregat, Badalona and Santa Coloma de Gramenet.

For Daniel Leiva, one of the co-founders of the company, “the time has come to expand our business opportunities to other municipalities bordering the Catalan capital, where there are real estate products that fit with our business model”.

The Catalan family office expects to announce its first purchase in the metropolitan area of Barcelona in the coming weeks. Moreover, the company is going to continue to renovate its properties to improve their conditions and returns.

These plans coincide with MK Premium’s business strategy over the medium term. The company is planning to expand its capital estate by 50% and to extend its presence to other cities in Spain.

Founded in 2012, MK Premium owns buildings in Madrid and in Portugal – it first expanded to that country at the end of December. The Spanish real estate firm is planning to increase its real estate investment by 15% this year and close 2018 with a profit, following the acquisition of more than eighty assets.

Original story: Eje Prime

Translation: Carmel Drake

Vbare Acquires 14 Homes in Málaga for €1.35M

28 June 2018 – Eje Prime

Vbare is branching out of the Spanish capital. The Socimi has made the leap to Málaga with the acquisition of a block of residential assets for €1.35 million. This operation forms part of the company’s growth plans after it carried out a €3.2 million capital increase in June.

According to a statement filed by Vbare with the Alternative Investment Market (MAB), this week, the company has signed the acquisition of a batch of fourteen homes on Calle Eugenio Gross in Málaga. The operation, which has been financed using the company’s available cash, was initiated in May when the company signed the deposit agreement.

Twelve of the homes acquired are leased and the remainder are vacant, “but in optimal conditions for their immediate rental”, according to the company. Vbare estimates a return of approximately 5.1% once the building has been fully let at market rents.

So far this year, Vbare has carried out five operations in the residential and commercial sectors. The Socimi ended the first quarter of the year with 210 assets under management and has set itself the objective of expanding its portfolio to include up to 261 residential units under management.

VBare is a real estate investment vehicle specialising in the acquisition and management of residential assets for their rental. The company was constituted in March 2015, is chaired by Fernando Acuña and led by Fabrizio Agrimi (pictured above) as the Director General.

Original story: Eje Prime

Translation: Carmel Drake

Former Bacardi Factory Plots in Málaga to go up for Sale for €15M

7 June 2018 – La Opinión de Málaga

Yesterday, the consultancy firm Savills Aguirre Newman announced the upcoming sale of almost 75,000 m2 of land on the site of the former Bacardi factory in Málaga, an operation for which it is acting as the broker and which could reach a market value of around €15 million.

The land, which is classified as buildable industrial, could prove very attractive for investors, given the current lack of available spaces of this kind in Málaga on which to locate industrial or logistics facilities. The director of the consultancy in Málaga, José Félix Pérez-Peña, described the land as “one of a kind”, despite the fact that it is located on the Guadalhorce flood plan, and mentioned several high-profile “international funds” as possible interested parties. The consultancy firm, which indicated that the plots will come onto the market “soon” is placing the focus on the use of the site for office buildings.

Another attractive plot that Savills Aguirre Newman is brokering the sale of is the former Salyt brick factory, spanning almost 13,000 m2, although it is still unknown whether that will be allocated to industrial or commercial use. A Dutch group had expressed interest in building a shopping centre on the site although the price being requested by the Town Hall paralysed that operation. There has also been talk recently of the land housing a logistics warehouse. Pérez-Peña said that the final destination of these plots would be revealed over the next few months.

In terms of Astoria, he said that “several international groups are interested”, including one in particular that has properties of this kind in Spain and Europe and which may soon make contact with the Town Hall. In theory, the Town Hall is planning to convene a tender at the end of this year or the beginning of 2019 in which anyone who wants to will be able to participate (…).

Another one of the projects that is being “followed very closely” by Savills Aguirre Newman is that of Martiricos, where two residential towers are going to be built, plus an office building measuring 7,000 m2 and another commercial building measuring 3,000 m2. The consultancy firm classified it as one of the “star projects” in Málaga, which “is going to change” the city.

Pérez-Peña also summarised other matters such as the future of Pier 4, which has a surface area of 26,500 m2 and which, in his opinion, could become a great space for offices or homes. He also said that Repsol, spanning 117,000 m2, could be a wonderful enclave for making a city of offices, although that would be up to the Town Hall and Sareb to decide. And he also alluded to the potential of the Correos building (3,352 m2) as an office block, although he admitted that it would generate higher yields if it was allocated for residential or hotel use.

Original story: La Opinión del Málaga (by José Vicente Rodríguez)

Translation: Carmel Drake

Mazabi’s Socimi Silicius Acquires an Office Building on c/Velázquez (Madrid)

21 May 2018 – Press Release

Silicius Inmuebles en Rentabilidad, the Socimi managed by Mazabi, has purchased an office building in the heart of Madrid’s CBD, on Calle Velázquez, 123.

The property, which has been renovated recently, meets the requirements of the investment policy established by the shareholders and represents another step in the Socimi’s growth phase, ahead of its debut on the stock market. The acquisition has been conducted entirely using own funds.

In the heart of Madrid’s CBD, the property has an above ground gross leasable area (GLA) of 2,346 m2 (offices and a commercial premise) plus 30 parking spaces. Currently, the 1st, 2nd and 3rd floors are available for rent; they are completely open plan and have a surface area of 300 m2 each. This is a highly visible property thanks to its location at the junctions of Calles Velázquez and María de Molina, and the floors enjoy lots of light (with 15 windows per floor). The property is currently in the pre-certification phase of obtaining a sustainability stamp.

This is a firm step forward for the Socimi as it advances its growth phase. The company, which specialises in long-term rental assets, is continuing its growth phase with the acquisition and contribution of new assets to its existing portfolio, following its policy to invest in diversified assets that generate stable rental income.

The Director-General of Silicius, Juan Diaz de Bustamante, said that “the purchase of this asset is a good example of the ideal asset for our portfolio, given that it meets the necessary requirements set out in our principles: to back conservative investments over the long term, as well as to ensure diversification and asset liquidity in order to pay an annual dividend to shareholders”.

With a very defined investment policy, Silicius is currently evaluating the purchase or contribution of properties worth approximately €500 million (commercial premises, out-of-town stores, shopping centres, office and hotels in Spain). The volume of investment/contribution per property amounts to between €5 million and €30 million.

Currently, Silicus owns assets worth €120 million, which generate annual rental income of approximately €6 million. The company’s assets include several commercial premises in “prime” locations with long-term tenants (Paseo de la Castellana, Velázquez, Blanca de Navarra and Paseo de Yeserías), a multi-tenant office building on c/Virgen de los Peligros (in the historical centre of Madrid), an office building on Calle Obenque, 4 in Madrid (with a façade overlooking the A-2) and a hotel with a long-term lease in Conil de la Frontera (Cádiz).

Silicius is a Socimi, managed by Mazabi, specialising in the purchase and active management of profitable assets that generate stable rental income over the long term for investors, providing them with an annual dividend (…).

Original story: Press Release

Translation: Carmel Drake

Spain’s Student Halls are the Most Profitable in Europe with Yields of 5.5%

14 May 2018 – Eje Prime

As well as being the largest recipient of Erasmus students, Spain is now also one of the most attractive countries for funds and operators specialising in halls of residence. The high demand and shortage of existing supply multiplied the investment in this alternative market ten-fold in 2017, increasing from just over €50 million to €600 million in one year. One of the keys to this growth lies in the profitability of the segment: with a yield (…) of 5.5%, Spain offers the best returns on the whole continent, for nations with more than 1 million students, according to a report from the consultancy firm Cushman&Wakefield.

In this hall of residence boom, which has allowed investments in the segment to grow by 29% across Europe, Spain also led the ranking of the largest operations in 2017. The transaction involving Resa’s portfolio, which was sold by Azora to the funds Axa Real Assets and CBRE GI for €400 million was the largest deal closed on the whole continent last year. Moreover, Operation Rio, which involved the sale of Oaktree’s Spanish portfolio to GSA for €180 million, also ranked in the top 3, a podium that was completed by another deal involving GSA, in that case together with GIC, which acquired thousands of beds from LJ Capital in Germany for €250 million.

The increase in investment will be accompanied in 2018 by a greater number of projects under development. As Reno Cardiff, Director of Capital Markets Business Space at Cushman&Wakefield in Spain explained recently in an interview with Eje Prime, “there is a great appetite for this kind of asset, but there is a shortage of supply”.

Due to the lack of stock right across the continent, consultancy firms and real estate experts are promoting the construction of new halls of residence to receive students over the coming years. Moreover, Cushman&Wakefield highlights another change: interest has increased from institutions looking to construct properties to house students, a cohort that was traditionally forced to rent homes from owners who, in many cases, set abusive prices.

Nevertheless, the growing appetite from funds for halls of residence is not driven by social reasons, but rather as the coming together of a sea of opportunities. In addition, the yields, despite having fallen in the last year, are still higher than those of other segments, such as traditional residential, offices and commercial. Only the logistics market offers yields in line with those of university halls of residence (…).

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake