Tag: space

BNP Paribas: Office Rentals Rose by 22% in Madrid in 2017

5 January 2018  – Eje Prime

The good news is never-ending for the office sector in Spain. In Madrid in 2017, the market recorded its highest level of office rentals since 2007, increase the absorption of this asset type by 22%, thanks to greater demand from public administrations, according to a report from BNP Paribas Real Estate.

According to the entity, last year, 525,000 m2 of office space was leased in Madrid. The office rental figures recorded in Madrid still do not approach the almost 1 million m2 of space that was leased ten years ago. Nevertheless, it is worth taking into account the fact that companies no longer need such large spaces to undertake their activity because working practices have changed, and there is now a trend to optimise spaces.

The increase in demand was also accompanied by an increase in prices, which rose to €31/m2/month in the most exclusive areas. Nevertheless, some lease contracts were also signed for prices of up to €36/m2/month in certain buildings in the Spanish capital’s financial district.

Original story: Eje Prime

Translation: Carmel Drake

Knight Frank: Inv’t in Logistics Will Amount to €1.2bn in 2017

4 December 2017 – Eje Prime

The Spanish logistics sector is on the right track as the industry approaches the centres of the country’s largest cities. The new methods of consumption, which demand greater speed when it comes to receiving a product and the increase in the volume of online purchases, has led to a rise in the leasing of logistics land in Spain, in particular in the regional capitals. During the nine months to September, investment in the market amounted to €550 million and that figure is forecast to reach €1.2 billion before the end of the year.

Spain’s Gross Domestic Product (GDP) is growing at a rate of 3% p.a., and the index is not escaping the gaze of international investors, who are placing their trust in the country. This has been demonstrated by the largest logistics operation recorded so far this year involving P3 Logistics Parks, the developer controlled by the sovereign fund of Singapur GIC, which paid €243 million for GreenOak’s logistics portfolio in April, according to a report from the consultancy firm Knight Frank.

In addition to Madrid and Barcelona, several other large regional capitals have benefitted from the investments made in the purchase of industrial land on the outskirts of cities. Such is the case of Valencia, in the adjoining town of Ribarroja, where the largest operation was signed during the third quarter of the year. There, TH Real Estate acquired a Carrefour logistics platform measuring 55,000 m2, on a plot with a surface area spanning 87,000 m2.

Focusing on the Community of Madrid, the report points out that the absorption of logistics space has soared this year. The figures for the third quarter of the year, when 675,000 m2 of space was leased, exceed the surface area recorded during the whole of 2016 in the Spanish region. The international consultancy firm forecasts that Madrid will close the year with absorbed logistics surface area of around 800,000 m2.

The large deals notably drove the increase in the surface area leased in the country. Seven of the transactions signed in the sector during 2017 involved assets spanning more than 40,000 m2.

Prime yields, on the rise in Madrid and Barcelona 

In a survey of international investors conducted by Knight Frank, 51% of those questioned chose industrial and logistics assets as their preferred asset type for investment over the next five years. This investor appetite has led to an increase in the price of Spanish industrial land. Prices in the logistics market are on the rise, although yields are remaining stable.

In the market for logistics assets in Madrid, prime rents amount to around €5.25/m2. The forecasts indicate that the increase in demand and the improvement in the quality of new logistics facilities will lead to an average annual increase in rental prices in the region of around 3%.

Meanwhile, in Barcelona, the price of prime logistics land is even more expensive at around €6.85/m2. If we look at a map of Europe, the Catalan capital is the seventh most expensive city, and the most expensive, by far, in the south of the continent. In this sense, Barcelona, where land is already more expensive than it is in Frankfurt (€6.65/m2), is only exceeded by Amsterdam (€7.10/m2), Munich (€7.10/m2), Dublin (€8.15/m2), Helsinki (€10/m2), Geneva (€14.55) and London (€15.25/m2).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Ibercaja Sells 450-Space Parking Lot In Zaragoza To Indigo

13 October 2017 – Inmodiario

JLL, the professional services firm and investment manager specialising in the real estate sector, has advised Ibercaja on the sale of the San Ignacio de Loyola parking lot, located in the centre of Zaragoza, The purchaser has been the parking lot manager Indigo, the global mobility leader, which has a presence in 16 countries, including Spain.

The asset has a surface area of almost 20,000 m2, distributed over 500 parking spaces in total, of which 450 have been included in the transaction perimeter; the remaining 50 spaces will continue to be owned by Ibercaja.

The parking lot is prized due to its excellent location, in the heart of Zaragoza, between Calle San Ignacio de Loyola and Paseo de la Constitución, next to El Corte Inglés and close to Plaza Paraíso, an important transport hub in the city. Similarly, the area stands out because it is home to a large number of homes, as well as several major commercial and office spaces.

For Loïc Delcroix, Indigo’s Director General in Spain and Director in Europe: “This significant operation fits perfectly into our expansion and growth strategy in Spain. (…). The operation also serves to reinforce our position as one of the main mobility players in the country”.

For Ibercaja, this operation comes in response to the objective to divest non-strategic assets and, in this way, focus all of its efforts, media and resources on boosting the banking business and implementing the digital transformation, whereby fulfilling the route map established for the strategic cycle 2015-2016.

In the words of Nick Wride, Director of Alternative Assets at JLL, this operation “is another example of the great interest that exists in investing in alternative real estate assets in Spain, a market with enormous potential that will continue to grow at a rapid pace over the next few years”.

Original story: Inmodiario

Translation: Carmel Drake

La Liga Puts Its HQ Up For Sale For €3.5M

9 October 2017 – Eje Prime

La Liga is hoping to receive a bonus before Christmas. The football league association will complete its move to a new corporate headquarters before December and so plans to complete the sale of its current offices during the final stretch of 2017 or beginning of 2018, according to Palco23. The football clubs’ delegated commission approved the sale of the building at the beginning of the year and has now commissioned the valuation of the building before it puts it on the market: €3.52 million.

The valuation has been performed by an independent third party and has forced the entity chaired by Javier Tebas to recognise a loss amounting to €1.04 million. That is because the price that has been assigned to the property, located at number 10 Calle Hernández de Tejada, is lower than its net book value in the accounts.

The building has a surface area of just over 1,100 m2 and La Liga tried to squeeze into the various floors as it continued to grow. Nevertheless, two years ago, the association decided to rent some additional offices around the corner, and in the end, has decided to concentrate all of its activity in a single building, located just 800m away from the historical headquarters.

As such, the association that represents first and second division clubs will occupy four of the seven floors in Edificio Murano, located at number 60 Calle Torrelaguna. That building is owned by the real estate group Hispania, which has secured the occupation of more than 50% of the property’s surface area (7,574.6 m2) thanks to Spanish football.

The move will not only result in an improvement in the conditions of the 158 workers that La Liga employs, it will also allow the body to offer a more modern image. Compared to the antiquated facilities at Hernández de Tejada, the new headquarters will be located in a glass building with views of Avenida de América and Calle Arturo Soria.

The office market in Madrid

The office market is one of the most active in the Spanish real estate sector. During the first six months of the year, 275,037m2 of office space was leased in the capital, a very similar figure to that recorded during the first half of 2016. According to the real estate consultancy Aguirre Newman, activity has been improving throughout the 6 months.

Another significant feature in the market has been the recovery of large volume operations: 25 deals were signed for spaces spanning more than 3,000 m2, which accounted for 42% of the total volume of operations closed. Those figures include La Liga’s new building on Calle Torrelaguna.

The overall office availability rate in the market in Madrid has decreased significantly over the last six months, from 11.4% in January 2017 to 10.8% in July 2017, as the volume of available space decreased by more than 74,000 m2.

In terms of prices, during the first half of the year, average rents grew in all areas, to reach an average half-year a rise of 3.9%. The average rental cost in the capital’s business district rose to €28.94/m2/month, whilst average rents in the peripheral areas amounted to €12.61/m2/month.

The most significant increases in rental prices by area were recorded in the central business district, with an average rise of 7.7% in six months. That mainly occurred as a result of a change in companies’ requirements, since they are now prioritising location and building quality over rental cost.

Original story: Eje Prime (by M. Menchén and C. Pareja)

Translation: Carmel Drake

Aguirre Newman: Inv’t In Logistics Sector Amounted To €230M In Q1

10 May 2017 – Aguirre Newman

According to the Q1 Logistics Market Monitor Report for Madrid and Barcelona compiled by Aguirre Newman, the volume of investment in the logistics market amounted to €230 million during the first quarter of 2017, compared with €135 million in the same period in 2016, which represents an increase of 70.4%.

The leasing of logistics space in Madrid and Barcelona amounted to 251,866 m2, involving 29 operations, with a maximum rent of €6/m2/month during the quarter.

Madrid 

In Madrid, demand for logistics space exceeded 127,703 m2, which meant that the amount contracted in Q1 2017 represented 31.5% of the total amount leased in 2016.

The higher volume of activity was also reflected in the number of operations, which was 56% higher than in Q1 2016 (9 operations vs. 16). Of the 16 operations closed in Q1 2017, three accounted for 57% of the total space leased, with a surface area of more than 10,000 m2 each.

With respect to rental income, the maximum rent was €6/m2/month, in an operation in the CTM in Madrid. Besides that one-off operation, rents in the prime area remained in the region of €5/m2/month to €5.5/m2/month.

According to the report from Aguirre Newman, regarding the investment market, there is still a considerable amount of interest in the logistics market, with operations closed in the main logistics markets (Madrid and Cataluña) as well as in other secondary markets, such as Pamplona, during the quarter. In terms of yields, they amount to just under 6% for certain prime assets.

Barcelona 

Meanwhile, in Barcelona, the leasing of logistics space during the first quarter exceeded 124,163 m2, which represented an increase of 40% compared to the same period in 2016. The number of operations closed during the period rose to 13, of which three stood out for involving spaces larger than 10,000 m2 and for together accounting for 68% of the total space leased.

Aguirre Newman’s report highlights that the logistics investment market in Barcelona and its area of influence is still very attractive for investors.

Original story: Aguirre Newman

Translation: Carmel Drake

Merlin Wants 20% Of Its Income To Come From Logistics Assets

9 May 2017 – Cadena de Suministro

The Socimi has set itself the objective of generating 20% of its revenues from the logistics sector.

The real estate logistics sector has become one of the key markets for Merlin Properties. Being the largest company in Spain in terms of logistics assets is not sufficient for the Socimi. It has set itself the ambitious objective of doubling its logistics stock to achieve 3,000,000 m2 in assets over the next few years.

This challenge comes in response to a larger goal that forms part of the company’s business plan: it wants the rental income from its logistics assets to account for 20% of its total revenues. Given that the Socimi’s current revenues from rental income amount to around €500 million per annum, the plan means that it will have to generate approximately €100 million from its logistics space.

At least that is according to the CEO of Merlin Properties, Ismael Clemente, speaking during the inauguration of the Cabanillas del Campo platform in Guadalajara, the largest logistics development to have been built in Spain since 2007.

In 2016, the company owned 34 logistics assets, with a surface area of 755,000 m2, which generated rental income of €33 million, which represented 7% of the total rental income for the year. If we add the €7.8 million that will be generated from the rental payments at Cabanillas, the Socimi’s current rental income accounts for around 10% of the total.

Commitment to stay

Clemente highlighted the Socimi’s commitment to stay in the logistics market, which allows it to offer “greater security” to its tenants by establishing “long-lasting relationships” and by “tailoring its facilities to suit them”. Since we have “no intention of rotating these assets”, the Socimi is able to commit itself to its clients “as much as necessary”.

In a statement to cadenadesuministro.es, the CEO said that the 3,000,000 m2 of logistics assets, that the Socimi wants, represents a “viable and feasible” objective. The large portfolio of land that the company owns in areas with high levels of logistics activity in Sevilla and Barcelona, together with land in Lisbon, will facilitate the achievement of this objective.

325,000 m2 under development

For the time being, the Socimi has 1,656,000 m2 of logistics space on the Iberian Peninsula, of which 921,000 m2 relate to own assets, 414,000 m2 correspond to its stake in the ZAL de Barcelona and 325,000 m2 is under development. The Socimi also owns a portfolio of land amounting to 880,000 m2.

All of the warehouses that are currently under development are located in the Community of Madrid, in Pinto and Gavilanes, in the A-4 Corredor and in the logistics areas of Meco, Azuqueca and San Fernando, in the heart of the Corredor del Henares.

Original story: Cadena de Suministro 

Translation: Carmel Drake

Telefónica To Lease Out 1 Building At Its Las Tablas HQ In Madrid

30 April 2017 – El Confidencial

A year after taking over the Presidency at Telefónica, José María Álvarez-Pallete (pictured above) now has the telecoms operator’s first major real estate operation on his desk: the rental of one of the 13 buildings at the entity’s Madrid headquarters, specifically, the complex known as District C.

The company has launched a tender process with the country’s main real estate consultancy firms, with the aim of selecting one of them to find a new tenant for the North 3 Building. All interested parties should submit their bids within the next few days, given that the operator has asked for them to submit their projects after Easter. (…).

With this tender, Telefónica confirmed the rumours that have been circling for a while, which were further fuelled when the operator’s employees vacated the North 2 and 3 Buildings. The properties are located in one of the corners of the main face of the complex. Almost 10,000 people work at the headquarters on a daily basis.

In the end, after considering various options – ranging from organising a kind of small Silicon Valley for startups to selling the building – the team led by Álvarez-Pallete has opted to rent out at least one of its properties. And this option promises to receive interest in the market, given that in the past, commentators have speculated about the possibility of companies such as L’Oreal and Huawei being interested in moving their headquarters there, and which moves the group away from the possibility of selling the entire complex.

The option of Telefónica selling District C has been on the cards for several years – the idea was that it would remain as the tenant with a long-term contract, in order to obtain a sizeable cheque with which to reduce its significant debt balance. In fact, many funds have called at its door, but with offers that have always fallen well below the company’s €3,000 million asking price.

In addition, the new accounting legislation that, from 1 January 2019 onwards, will oblige firms to account for rental commitments as debt, means that any kind of “sale & leaseback” operations that the firm may have been considering under the prism of reducing its financial commitments would be significantly less attractive.

Located in the Madrilenian neighbourhood of Las Tablas, District C opened its doors a decade ago, after Telefónica took the decision to bring together all of its employees in Madrid in a single headquarters. Previously, they had been distributed across around thirty buildings.

Although the option of building a skyscraper was initially proposed, in the end, a horizontal design was chosen by the architect Rafael de la Hoz, with independent, but perfectly connected buildings within a single district. From there emerged what is popularly known as District C – the Communications District – although its official name has been the Telefónica District for over six years.

The complex has a total constructed surface area of 370,000 m2 and more than half, 180,000 m2, corresponds to the 13 existing office buildings: four of those, located at the corners have ten storeys each; another four have four storeys; four more have three storeys, whilst the main building, in the centre, has a surface area of 16,480 m2.

In addition, District C has 20,000 m2 of space dedicated to all types of auxiliary services, from a children’s nursery to shops; 130,000 m2 of space comprising open areas and gardens; and 5,000 parking spaces.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Solvia Puts DHL Logistics Platform In Guadalajara Up For Sale

21 April 2017 – Expansión

Solvia has put a logistics platform up for sale measuring 51,000 m2 and located in the Corredor del Henares, in the municipality of Quer (Guadalajara). It is a complex comprising two warehouses, which is leased in its entirety to the logistics operator DHL.

The real estate arm of Banco Sabadell took care of expanding and executing the turnkey project for the launch of the platform and now has decided to put the asset on the market in light of the investor interest in the area, which is close to the A-2 and R-2 motorways.

The sales process is open to investors who are looking for assets with yields that range between 6% and 7%. 2016 was a record-breaking year for the logistics sector in Spain, with 285,000 m2 of space leased and a 3.5% increase in rental income.

Original story: Expansión (by S. S.)

Translation: Carmel Drake

Neinver & TH Real Estate Buy Nassica Shopping Centre For €140M

8 November 2016 – Real Estate Press

TH Real Estate and Neinver have completed the purchase of the Nassica shopping centre from the private equity firm KKR for €140 million.

At the beginning of 2015, Neinver and TH Real Estate signed a strategic alliance to create a leading platform for outlet centres in Europe. Each company owns a 50% stake in the joint venture, which owns several assets in a portfolio that now also includes the complex located in Getafe (Madrid).

Nassica has a gross leasable area (GLA) of 50,200 m2 and 4,000 parking spaces. The centre receives twelve million visitors per year.

In this way, the joint venture between TH Real Estate and Neinver have acquired the complex in Getafe just two years after KKR purchased it for €100 million.

With operations in France, Germany, Italy, Poland, Portugal, Spain, The Netherlands and the Czech Republic, Neinver has consolidated its position in the European retail sector and now manages 24 centres, covering a GLA of 593,000 m2, housing almost 2,000 stores and more than 1,000 exclusive national and international brands.

Original story: Real Estate Press

Translation: Carmel Drake

Aguirre Newman: Office Inv’t Reached €215M In Q1 2016

20 May 2016 – Mis Oficinas

During the first quarter of 2016, investment in the office market amounted to €215 million, according to the Monitor Report for the Office Market in Madrid and Barcelona Q1 2016, compiled by the consultancy firm Aguirre Newman. The number of operations totalled 252 during the first three months of the year.

According to the report, 130,693 m2 of surface area was leased in Madrid, which represented a decrease of 8% with respect to Q1 2015. The total number of operations increased to 144 compared with 111 during the same period in 2015, which is indicative of more buoyant demand in the small and medium-company segment.

The most active geographical areas during the first quarter of the year were the Decentralised Area (DEC), which accounted for 40% of the total surface area leased; the Rest of the Business District (RDN) and the area Outside of the city (OUT), which accounted for 20% of the space leased, respectively.

In terms of rental prices, the maximum rent amounted to €33/sqm/month, whilst the average rent in the Business Centre stood at €26.62/sqm/month and the average rent in the DEC was €11.73/sqm/month.

In Barcelona, 73,757 sqm of space was leased during the first quarter of 2016, which represents almost the same surface area as in Q1 2015. The total number of operations, 108, was also in line with the same period last year.

Analysing the absorption by area, Aguirre Newman’s report indicates that the most significant movement was the strong uptake in the RC area (Rest of the City), which accounted for 40% of the total absorption. All of the office sub-markets situated in the centre of the city have seen increases in the absorption levels with respect to the previous quarter, and the overall growth in leasing in this market was 67%.

In terms of prices, there have been slight increases compared to the previous quarter, especially in terms of average prices, but not so much in terms of maximum prices. These increases have been generalised and very homogeneous by business area.

Original story: Mis Oficinas

Translation: Carmel Drake