Merlin Clings to its Office Business to Protect itself from the Impact of Coronavirus

The largest Spanish Socimi forecasts a maximum decrease of 9% in its annual income from its shopping centres after it waived their rental payments, something it has not done with its offices and logistics assets.

The large Spanish real estate companies are beginning to take stock of the impact of the Covid-19 coronavirus epidemic on their businesses. Such is the case of Merlin Properties. The Socimi with the largest number of rental assets in the Spanish market has revealed, in a call with analysts, that the closure of non-essential commercial establishments decreed by the State of Emergency will result in a decrease in its annual income from that type of property.

Specifically, Merlin, whose shopping centres generate 23% of its gross income, points out that only 23% of the stores in its commercial establishments are currently open. The company has given those tenants a 100% payment holiday on their rents for as long as the State of Emergency lasts.

BNP Paribas: Total RE Investment Grew by 5% in 2019 to €12.7bn

7 January 2020 – Eje Prime

Following a bumper fourth quarter, with a transaction volume of €3.9 billion, the Spanish real estate sector closed 2019 with a total investment volume of €12.7 billion, up by 5% YoY, according to BNP Paribas Real Estate.

The most sought-after assets were offices (€4.6 billion), followed by residential properties (€2 billion). The latter was boosted by the rental market and the wave of build-to-rent projects.

Meanwhile, the logistics sector recorded transactions amounting to €1.85 billion, up by 42% YoY, whilst the retail sector ended the year with some major last-minute deals, including the sale of the Puerto Venecia shopping centre in Zaragoza for €475 million.

Original story: Eje Prime 

Translation/Summary: Carmel Drake

Allianz RE Negotiates the Purchase of Castellana 200 for c. €250M

2 April 2019 – El Economista

The office and retail complex Castellana 200 in Madrid is on the verge of changing hands once again. Its owner, the pension fund of the Canadian armed forces, PSP, is negotiating its sale with Allianz Real Estate in a deal that could amount to €250 million.

The property is listed on the MAB through the Socimi Silvercode, which made its debut on the stock market in 2016. The company’s majority shareholder is Java International, (97.51%), which is in turn owned by PSP Britannia (87.76%) and Enavap Investments (9.75%). The latter is controlled by Luis Iglesias, founder of Drago Capital, which is the current manager of the complex.

Castellana 200 was last sold in July 2014 for €144 million, after opening its doors in April 2013. It is located on Paseo de la Castellana, just 300 m from Plaza de Castilla, and comprises two office buildings, spanning more than 20,000 m2, plus a shopping centre measuring 6,416 m2 and 817 parking spaces. There are also plans for a hotel in the pipeline with a surface area of 18,000 m2.

Through this deal, Allianz Real Estate, the strategic real estate division of the Allianz Group, would strengthen its position in Spain, a market it first entered in 2016.

Original story: El Economista (by Alba Brualla)

Translation/Summary: Carmel Drake

Tomás Olivo Buys 2 million m2 of Land in Marbella

12 March 2019 – Murcia Economía

General de Galerias Comerciales, the Socimi owned by the Murcian businessman Tomás Olivo, has purchased 2 million m2 of land in Marbella, which is thought to be key for the development of the city.

The Socimi paid €25.73 million plus taxes for the plots, which are located to the north of the La Cañada shopping centre, also owned by Olivo.

When the land was put up for sale last year, it generated little interest as only a quarter of the plots are currently developable, under the governing PGOU. However, sources report that Olivo plans to put all of the land to work as soon as possible.

Original story: Murcia Economía

Translation: Carmel Drake

Nuveen & Value One Join Forces to Invest €600M in Student Halls

11 March 2019 – Eje Prime

The investment manager Nuveen Real Estate, which owns 50% of the Xanadú shopping centre in Madrid, has teamed up with the Austrian real estate firm Value One to create a new investment vehicle with €600 million to spend on the promotion and management of student halls in Europe.

The new company already has three assets, in Vienna, Lisbon and Porto, which the companies expect to launch within the next two years.

Under the terms of the agreement, Nuveen is the investment advisor, Value One is the property developer and Milestone, a subsidiary of Value One, will be the operator of the properties once they are up and running.

Original story: Eje Prime

Translation/Summary: Carmel Drake

Moraleja Green Gets a Makeover with 19 New Stores

7 March 2019 – Expansión

Moraleja Green, the shopping centre located in Alcobendas, in north  Madrid, saw its visitor numbers increase by 12% in Q4 2018, following the completion of a €12 million renovation project by its owner Kennedy Wilson. The US fund purchased the shopping centre, which has a surface area of 30,200 m2 and 1,300 parking spaces, from ING in 2015. Following its renovation, the medium-high end retail space opened 14 new stores last year and will welcome five more in 2019, with brands such as Mango, Dolores Promesas, Scalpers Women, Poete and Parfois all opening premises.

Shopping centres in Spain are enjoying something of a renaissance, despite the surge in online shopping. They offer consumers a plethora of in-person entertainment options besides retail, including gastronomic, leisure and sports facilities.

In particular, Moraleja Green’s renovation has allowed it to expand its gastronomic offering to include Tierra Burrito, Pizza Jardin and NYB restaurants, amongst others. The shopping centre also offers charging points for electric vehicles and access to wifi throughout its premises.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

C&W: Investment in High Street Premises Soared by 70% in 2018 to €1.7bn

6 March 2019 – Eje Prime

According to the latest edition of Cushman & Wakefield’s Investment Insight report, investment in high street assets in Spain soared by 70% in 2018 to reach €1.7 billion. In total, 52 operations were closed last year, accounting for 38% of all investments in commercial assets. The fashion and banking sectors accounted for the most deals.

Meanwhile, 32 operations were closed in the shopping centre segment, where the total investment amounted to almost €1.9 billion, down by 25% compared to 2017. In addition, 7 retail parks were sold last year for €236 million.

In the office sector, investment rose by 29% YoY in 2018 to reach €3.1 billion, with Madrid accounting for 66% of that total (€2.1 billion) and Barcelona accounting for 31% (€950 million).

In the logistics sector, e-commerce drove a sharp increase in investment to reach €1.2 billion, with 890,000 m2 of logistics space leased in Madrid and 345,000 m2 in Barcelona.

In terms of alternative assets, investment in student halls amounted to €220 million in 2018, whilst investment in nursing homes leapt to €281 million.

Original story: Eje Prime

Translation: Carmel Drake

The Land for Spain’s Largest Commercial & Leisure Centre Goes on Sale

21 February 2019 – El Economista

The Madrilenian neighbourhood of Valdebebas is going to become home to the largest commercial and leisure complex in Spain. The first steps to make that possible have been taken today, as the Valdebebas Compensation Board has granted Savills Aguirre Newman the sales mandate for the land on which this new commercial and entertainment space is going to be built, to the north of the city, according to confirmation provided by sector sources speaking to El Economista.

The land has a buildability of 145,790 m2 for commercial space, in addition to a plot for offices measuring more than 35,400 m2 and green areas spanning another 24,500 m2.

The land that is going on sale now has historically been known as the Commercial Block of Valdebebas. Initially, a large shopping centre was planned for the site, but the Compensation Board designed a new plan to build more social housing units and a school. That new plan, approved by the Town Hall of Madrid in 2014, was subsequently appealed and overturned by the Supreme Court, and so the land has been returned to its original use.

According to explanations provided last year by the President of the Valdebebas Compensation Board, César Cort, in an interview with this newspaper, several investors have approached the Compensation Board interested in this plot, however, the Board wants “to carry out a transparent process that is completely secure legally”.

In terms of the price, Cort said that it will be “a high figure”. “When this same product was sold to Metrovacesa and Riofisa, the price amounted to more than €200 million, but it will not necessarily be the same figure”, explained Cort, who assured that “we plan to sell the land during the first half of 2019”.

Residential activity

Currently, around 18,000 people live in Valdebebas and the population is expected to double to around 35,000 inhabitants over the next three to four years.

Besides the launch of the commercial block, the Town Hall of Madrid has already started to grant building permits in the residential market. In this way, there are plans afoot for the construction of 48 residential developments, which will result in the construction of 3,800 homes in total, which represent one third of the 11,400 homes planned for the Valdebebas area.

During the first few months of the year alone, more than 20 developments will obtain licences to begin the construction of 2,000 homes.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Meridia III Raises €44M to Grow its Property Portfolio

31 January 2019 – Idealista

The Catalan fund Meridia is giving a boost to one of its Socimis. Meridia Real Estate III, led by the businessman Javier Faus, has increased its capital by €44 million, according to an announcement made by the group in the Official Gazette of the Mercantile Registry (BORME). This increase will serve to allow the company to continue with its business plan and add new properties to its portfolio.

According to explanations provided by the company to Idealista News, this increase forms part of the normal operation of the investment vehicle during its investment phase. Meridia Real Estate III is a vehicle dedicated to investment in all segments of the real estate sector in Madrid and Barcelona. The company’s portfolio currently comprises nine assets, including office buildings, industrial platforms and a shopping centre.

One of the most recent operations to be closed by the investment vehicle was the acquisition from the US fund Värde of a plot with a buildable surface area of 24,600 m2 in the 22@ district of Barcelona for €25.8 million.

The company, which purchased that land through its Socimi Meridia III, has already paid half of the cost of the operation. Payment of the remaining €12.9 million has been postponed until 17 March 2020, and it has been guaranteed by a mortgage on the land acquired, according to reports by the company to the stock market regulator.

With this purchase, the company is seeking to undertake a transformation plan for tertiary purposes in the Barcelona district. Currently, Meridia III owns more than 60,000 m2 of buildable space in the 22@ district, making it one of the leading investors in that area of the Catalan capital.

Meridia’s Socimi has been listed on the MAB since the end of last year. The company has starred in some of the most important operations of the last two years, both in the office market, as well as in the retail segment (…).

The fund manager is preparing to launch its fourth fund onto the market before the end of this year. The company is currently in the pre-market phase in territories such as Benelux and Israel, amongst others. The group’s new investment vehicle will join Meridia II, currently in its divestment phase, and Meridia III.

Original story: Idealista (by Custodio Pareja)

Translation: Carmel Drake

Pelayo Capital to Create a New Breogán Park with an Investment of >€60M

15 January 2019 – Eje Prime

Pelayo Capital is throwing itself into the Spanish retail sector during its second year of life. The Galician family office, which is currently working on the conversion of the Dolce Vita shopping centre in A Coruña into a retail park, is planning to replicate the project in other Spanish cities with an investment of more than €90 million, according to Íñigo Veiga, CEO of the company, speaking to EjePrime.

Similarly, the group wants to add high street stores to its portfolio of assets during the course of this year. In this sense, Pelayo Capital is on the hunt for properties located in Madrid, Galicia and Asturias, in particular, in which it plans to invest at least €1 million. “We are not ruling out other cities either, given that our strategy involves working hand in hand with retailers”, said the director.

Breogán Park is the company’s star project, an asset in which the company is going to invest €60 million and which will be inaugurated in the spring of 2021. It is the first project undertaken in Spain to involve the demolition and conversion of a shopping centre into a retail park. “The initiative that takes advantage of the demand for these types of assets in many cities around the country”, said the executive.

The surface area, spanning 45,000 m2, will have 2,500 parking spaces and used to house the Dolce Vita shopping complex until 2014. “It is a great opportunity to build a retail park in A Coruña; we are not going to find any others because there is no land available in the city on which to build a retail park of this size”, explained Veiga.

Pelayo Capital is looking for ways to handle the maturity of shopping centres and the boom in e-commerce in Spain by committing itself to retail parks and commercial premises located on the most prime streets. For this reason, the company has just purchased its first asset at number 103 Calle Hermosilla in Madrid, revealed the director.

“We do not have an investment objective or commitment, because we believe that pressure can lead to errors”, explained Veiga. Saddled between Galicia and Madrid, Pelayo Capital has the support of investors with different profiles and is not averse to the idea of backing the logistics or residential markets in the long term.

The company was created in 2017 hand in hand with Breogán Park, a project that launched it into the midst of the Spanish real estate sector. Although it is also working on the rehabilitation of a residential building in A Coruña, Pelayo Capital has placed its focus on retail and for that reason, it has hired Luis Íñiguez, former director of JLL’s retail division in Spain, as senior advisor to the company.

Original story: Eje Prime (by Berta Seijo)

Translation: Carmel Drake