European Real Estate Market to Prize Stable Income Streams in 2020

17 December 2019 – According to a report by Savills Investment Management, the big players in the European real estate market will begin to focus on more conservative investments in the coming year. Investors are expected to start looking for stable, long-term rental income streams in place of opportunistic bets.

The investment cycle in European rental markets is entering a period of reduced growth and heightened uncertainty due to weakened demand and economic and geopolitical developments. Consequently, analysts foresee anaemic economic growth over the next 12-18 months.

Savills IM, however, still sees significant opportunities in the office, retail and logistics sectors at the European level. In Spain, the firm expects the real estate sector to continue to see better than average performance in 2020, vis-à-vis the rest of Europe, despite the slowdown in domestic demand and weakness in external markets.

Original Story: Idealista

Adaptation/Translation: Richard D. K. Turner

Savills IM: Inv’t of €500M per Year Until 2022 Following Purchase of Aguirre Newman

26 June 2018 – Eje Prime

Savills Investment Management (Savills IM) is getting its chequebook out in Spain. The fund manager of the real estate consultancy firm is looking for new investments in the country six months after integrating Zaphir Asset Management into its structure under the framework of the acquisition of Aguirre Newman by Savills. Savills IM’s plans involve investing €500 million per year in Spain until 2022.

According to explanations provided by Fernando Ramírez de Haro, Director of the Savills IM office in Spain, speaking to Eje Prime, the fund manager forecasts building an asset portfolio on the Iberian Peninsula worth €2 billion, up from its current value of €480 million.

The company is now starting an ambitious positioning strategy in Spain, “having completed the integration of Zaphir”. Ramírez de Haro, who leads Savills IM’s office following the corporate operation, served as the Director General of Zaphir since 2007. Savills announced the acquisition of Aguirre Newman in July last year, but the operation was not completed until December when Savills IM integrated Zaphir.

The company is currently analysing investments worth €750 million in Spain, although the group is also considering entering the Portuguese market. Even though in 2017, the company’s most active markets were the United Kingdom, Italy and Japan, the forecasts of Ramírez de Haro indicate that Spain will become the fourth most important European market for the group, behind the United Kingdom, Italy and Germany.

Savills IM’s current portfolio in Spain comprises thirteen assets or projects. Half of them correspond to investments in offices, 25% to retail, 17% to residential and 7% to logistics, according to Ramírez de Haro. One of the most recent operations signed by the group was the purchase, in May, of a hypermarket operated by Eroski in San Sebastián for €48 million.

The executive maintains that the company is looking for opportunities across the four segments, especially in retail and offices. “I do not want to say that logistics is not important, it is and very much so, but it is the segment that is suffering from the most acute shortage in terms of supply”, he said. “In terms of retail, a negative vision is coming from the USA, but for us, that is not the case, provided you look for assets that are not so dependent on online sales, such as retail parks, high street stores, outlets and shopping centres linked to food”, he maintains.

Savills IM combines three types of operations: the first is the management of funds raised in Europe (especially in Germany): the second involves the mandates of global investors; and the third is to support value-added funds in their investments in Europe. Whilst in the first case, the average investment in terms of own funds is between €20 million and €80 million, international mandates tend to be upwards of €100 million and value-added operations typically range between €15 million and €100 million.

The fund manager has a workforce of sixteen people in Spain, fifteen of whom come from the former Zaphir structure and one from Savills IM. The group expects to have 22 employees in five years time.

On the global stage, Savills IM has a workforce of 300 employees and eighteen offices. In 2017, the group recorded transactions worth €5.5 billion: €4.5 billion in Europe and €1 billion in Asia. The company plans to spend €1 billion in own funds in 2018 for the acquisition of new assets in Europe and Asia.

Original story: Eje Prime (by J. Izquierdo & P. Riaño)

Translation: Carmel Drake

Savills IM Buys a Hypermarket in San Sebastián for €48M

23 May 2018 – Expansión

The fund manager Savills Investment Management (Savills IM) has purchased a hypermarket in the Garbera shopping centre in San Sebastián for €48 million.

The agreement, closed with an international institutional investor, has been completed in an off-market operation.

The investment, made by Savills IM on behalf of the European investment fund European Retail Fund (ERF) reflects a net yield of approximately 5%.

The hypermarket has a total surface area of 14,200 m2 and is operated by Eroski.

Specifically, the hypermarket is located on the ground floor of the Garbera shopping centre, which is owned by Unibail Rodamco. It is the dominant shopping centre in the region, according to the fund manager.

Fernando Ramírez de Haro, Director General at Savills Investment Management for Spain and Portugal, said that, with this operation, the fund manager is growing its footprint in the Iberian Peninsula, with a regional portfolio of assets under management amounting to almost €500 million.

“Spain and Portugal are a strategic priority for 2018 and the next few years, both for Savills IM and for its clients and strategic partners. To that end, we are going to continue studying the market in an active way and we are convinced that we will be able to bring to fruition several investment opportunities over the coming months”, added Ramírez de Haro.

Savills IM, with offices in almost twenty cities around the world, was managing assets with a total value of approximately €16.6 billion at the end of last year.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Savills IM Buys Retail Park In San Sebastián For €16M

15 March 2017 – Real Estate Press

The real estate fund manager Savills Investment Management (IM) has completed the purchase of a retail park located on the Lanbarren de Oiartzun industrial estate, close to the city of San Sebastián. 

The asset has a surface area of 10,300 m2 and is leased to companies such as the DIY chain Brico Depot and the food retailer Mercadona, which is the main tenant. The Valencian distribution group opened this establishment in November. It has a sales hall covering 1,500 m2, and represents the fourth store that Mercadona has opened in the province of Guipuzcoa and the thirteenth in the País Vasco.

Savills IM has paid €16 million for the property, which it has acquired from a local property developer, through its fund Europe II – Retail. It is the first retail property that the fund manager has purchased in Spain. Until now, the fund has focused on acquiring residential properties in the country.

“This is the fund’s first acquisition in Spain. It is a newly built prime asset in San Sebastián, in the País Vasco, and it is already generating results that exceed expectations (…)”, said Michael Reinmuth, Director of Savills IM in Spain.

The fund manager, which has offices in Amsterdam, Copenhagen, Frankfurt, Hamburg, Hong Kong, Jersey, London, Luxembourg, Madrid, Milan, Munich, Paris, Singapore, Stockholm, Sydney and Tokyo, is one of the largest real estate asset investors in Europe. As at 30 September 2016, Savills IM managed assets with an approximate combined value of €17,000 million.

Last week, Savills IM announced its plans to launch a pan-European investment fund, through which it hopes to raise €500 million, which it intends to invest in retail assets in several cities, including Madrid, as well as in various capital cities in the north of Europe.

Original story: Real Estate Press

Translation: Carmel Drake