Visits to Spain by Foreign Tourists Fell by 64.3% in March due to the Health Crisis

The decrease in the number of travellers caused a drop in spending – foreign tourists visiting Spain in March spent just €2.2 billion, down by 63.3% YoY.

Spain received only two million international tourists in March, which represents a drop of 64.3% compared to the same month in 2019, according to provisional data from the Frontur survey published by the National Institute of Statistics (INE) on Wednesday. The main reason for this fall is the Covid-19 health crisis that is plaguing the country – and much of the world – after the State of Emergency was decreed on 14 March.

Naturally, the decrease in visitor numbers had an impact on spending – foreign tourists visiting Spain in March spent just €2.2 billion, down by 63.3% compared to the same month a year earlier, according to provisional data from the tourist spending survey published by INE on Wednesday.

BMB Launches a Socimi to Invest €100M in Industrial Warehouses

16 October 2018 – Eje Prime

BMB Investment Management is betting on the tertiary sector. The fund manager is finalising the launch of a new Socimi to invest €100 million in the purchase of industrial warehouses.

After entering the residential market with two Socimis (Optimum Re Spain and Optimum III Value-Added Residential), the company led and chaired by Josep Borrell is now looking for higher returns with its latest firm, Optimum Rentals Socimi. This new investment vehicle will focus on the acquisition of assets that offer returns of between 6.5% and 10%, according to reports from Expansión.

The intention of BMB is that 80% of the budget will be allocated to the purchase of industrial warehouses, leased to solvent tenants and located in the industrial parks of Madrid and Barcelona.

Similarly, although Borrell rules out investing in logistics, he does not shy away from the idea that the fund may also take advantage of an opportunity or two in the residential sector or even in the hotel or retail markets.

Optimum Rentals Socimi is starting life with an initial budget of €100 million, of which €50 million will proceed from own funds and the remainder, from bank financing. Sources at the manager confirm that the plan is to maintain the fund in an independent way so that it will live off of its own income. Investors in BMB’s third Socimi are expected to include both institutional and real estate players, and the percentage of international capital is expected to be high.

Original story: Eje Prime

Translation: Carmel Drake

Renta’s Socimi Makes its in Debut in Barcelona with a Residential Complex in Teià

9 June 2018 – Expansión

In addition to investing in El Maresme, Vivenio has also purchased buildings in Madrid and Valencia. In total, the investment vehicle has spent €31 million on the acquisition of 212 homes.

Vivenio, the Socimi owned by Renta Corporación and the Dutch pension fund APG, is making its debut in Cataluña. Since its creation, in April last year, this real estate investment vehicle has invested €180 million in the residential sector, but until now it had limited itself to Madrid and its surrounding area.

The latest development in Teià comprises 42 homes in total and common areas with three swimming pools.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

ECE Finalises Purchase of 3 Shopping Centres from Sonae & CBRE GI for €450M

8 June 2018 – Eje Prime

The portfolio of shopping centres jointly owned by Sonae Sierra and CBRE Global Investors could be on the verge of having a new owner. The German company ECE is reportedly finalising the purchase of three shopping centres from the two groups for between €450 million and €500 million, according to sources close to the operation speaking to Eje Prime. Sonae Sierra and CBRE GI jointly own these three assets (50% each).

With the purchase of this portfolio, ECE would begin to acquire its first assets in Spain, given that since it carried out the acquisition of Auxideico Gestión in 2010, a company specialising in the management of retail complexes and which previously belonged to ING Real Estate Development, it has not closed any transaction of this kind.

The centres that may be added to the portfolio of the German firm ECE are: Gran Casa en Zaragoza, the largest of the three; Valle Real (Cantabria); and Max Center (Barakaldo, Bizkaia). The two current owners already announced when the sales process was launched that they expected to pocket around €500 million from the sale.

If the operation with ECE goes ahead, it will represent the real estate giant’s first purchase in Spain since its arrival. Eight years ago, the group headquartered in Hamburg and the leader of the European market in urban shopping centres, acquired the Spanish firm Auxideico Gestión, which was, at the time, responsible for the management of fourteen shopping centres.

Until last year and following its acquisition by ECE, the group controlled more than 25 retail complexes in Spain, including Albufera Plaza, Montecarmelo and Moraleja Green in Madrid, Alcalá Magna in Alcalá de Henares and Parc Central in Tarragona. In 2017, Auxideico finally stopped operating in Spain due to “its small business volume”, according to sources in the sector. Across Europe, ECE has more than 195 shopping centres under management.

ECE, a giant with a healthy investor appetite

Founded in 1965 by Werner Otto, ECE now has more than half a century of experience in the sector under its belt. The family-owned company develops, plans, builds, leases and manages shopping centres and invests in real estate projects.

With a retail surface area of 7.2 million m2 and around 21,000 retail operators, the shopping centres managed by ECE generate annual sales of more than €23 billion and have a market value of €30 billion. Moreover, ECE has a stock of shopping centres under construction and being planned, with an investment volume of €3.2 billion.

ECE, in addition to specialising in the management of shopping centres, also operates in the real estate sector with other types of assets. The company owns a portfolio of logistics assets spanning 913,000 m2 and office buildings measuring 1 million m2.

Shopping centres, a good business in Spain

The fact that a group such as ECE is showing interest again in this business in Spain is due to the good outlook that the studies predict for the sector. Spanish people both visited and spent more in shopping centres in 2017, and the turnover in this types of assets increased by 1.5% last year with respect to the previous year, whilst visitor footfall grew by 1.1% YoY.

The sectors that performed the best last year with respect to 2016 in terms of sales were the household, leisure and restaurant segments, with increases of 5%, 3,7% and 2,7%, respectively, according to a report from Cushman&Wakefield (…).

Shopping centres will continue to be the most sought-after assets by investors, primarily international funds. The Spanish retail market closed 2017 with 555 active shopping centres and a stock spanning 15.8 million m2, according to the Spanish Association of Shopping Centres (AECC).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Galicia Awards 1.1 million m2 of Industrial Land Supported by Aid from La Xunta

6 June 2018 – Eje Prime

La Xunta is promoting the sale of industrial land and Galicia is whereby reaching pre-crisis occupancy levels in the logistics sector. In total, 1.1 million m2 of logistics land has been awarded in the autonomous region, which represents almost 40% of the total available land for sale in 2015.

Amongst the measures adopted by La Xunta in 2018 include the elimination of regional taxes for the purchase of industrial land from the administration, with a 100% deduction of the Property Transfer Tax and Documented Legal Act Tax, according to Inmodiario.

The intention of the territorial government is, in addition to promoting the entry of new players into Galicia, facilitate the reactivation of disused industrial plots. In those cases, La Xunta adds discounts to the land prices of between 30% and 50%.

The Councillor for Infrastructure and Housing at La Xunta, Ethel Vázquez, anticipates that 2018 “will continue along the same path”. Not in vain, her portfolio has received a significant increase in budgeted aid, of 16.5%, achieving an additional €60 million taking the total fund to €424 million.

Original story: Eje Prime

Translation: Carmel Drake

Inbisa is Building 35 Homes for Banco Sabadell in Barcelona

1 March 2018 – Eje Prime

More homes for Inbisa in Barcelona. The construction arm of the real estate group has started building a new residential development comprising 35 homes in the north of the Catalan capital. The company is going to work for Sabadell Real Estate Development, a subsidiary of Banco Sabadell, on this project. The firm’s investment in this construction work will amount to €4 million, with an execution period of 18 months.

The complex, located on the Ribes road, spans a total surface area of 5,300 m2 and, besides the two residential buildings, is going to include a commercial space and parking spaces. The apartments will measure up to 150 m2 each and have two, three or four bedrooms.

The marketing of the building will be carried out by Solvia, the servicer of Sabadell, with whom it has been working on another project in Madrid for several months now. Innova Torrejón, a residential development comprising 92 homes has been designed with criteria that will allow it to reduce its energy consumption to almost zero.

This new real estate operation strengthens Inbisa’s presence in Barcelona, where it started work on an 88-home development in Ripollet a few weeks ago. Currently, the group has 2,400 homes under construction across Spain, consolidating the company’s “desire to grow and specialise in the residential segment”, according to Gonzalo Mínguez, Inbisa’s Contract Director for the Eastern region.

Original story: Eje Prime

Translation: Carmel Drake

Town Hall of Granada Sells Former Housing Dep’t HQ for €1.5M

2 February 2018 – La Vanguardia

The Town Hall of Granada has sold the historic building that used to house the headquarters of the now defunct municipal housing company, together with three parking spaces that form part of its estate, for around €1.5 million. Approximately €1 million of the proceeds received will be allocated to the renovation works that are currently underway in the neighbourhood of Santa Adela.

At a press conference following the local government meeting on Friday, the councillor for Urban Planning in Granada, Miguel Ángel Fernández Madrid, confirmed the sale of the property located on Calle Lepanto, behind the headquarters of the Town Hall of Granada, together with three parking spaces in Plaza Gamboa, nearby in the centre of the city.

According to legislation, the proceeds obtained from the sale of the municipal land asset must be allocated to investments in the city. “As we have an extended budget and the beans have been accounted for, the bulk of the money, almost €1 million, will go towards paying the costs” that the Town Hall is currently facing on the Santa Adela project, explained Fernández Madrid. He added that this will serve to “justify” the municipal investment with a view to the receipt of European Edusi funds for this project.

The future of the half a million euros that will be left over from the sale of the former headquarters of Emuvyssa and the three parking spaces is yet to be decided, but it is expected that that amount will also be invested in projects with Edusi funds, for which the Town Hall has to justify that “it is going to spend around 30% of the money”, that it will receive from Europe, in other words around €3 million.

For this reason, investing most of the proceeds resulting from the sale in the Santa Adela construction work is “the best option”, said the councillor for Town Planning. He recalled that the plenary approved the disposals of municipal land property and that belonging to the now defunct Emuvyssa “by sufficient majority”. They mostly comprise social housing developments that “carry a municipal mortgage”, representing a “substantial amount”, which the Town Hall has to pay each month.

The building on Calle Lepanto has a total constructed surface area of more than 600 m2 – according to information available on the website of the Town Hall of Granada. According to the information provided by Miguel Ángel Fernández Madrid to the media, a tender was held to dispose of the property but no one participated, and so the asset has been sold to the first bidder willing to offer the asking price.

Original story: La Vanguardia

Translation: Carmel Drake

Spain Overtakes US to Become 2nd Most-Visited Country in the World

12 January 2018 – El País

Spain’s tourism sector is on a roll, and it looks like the good times will continue into 2018.

Last year, industry activity grew by 4.4% on the back of historic highs, both in terms of international visitors and tourist spending. This year, the business lobby Alliance for Excellence in Tourism (Exceltur) is expecting a further rise of 3.3%.

This industry leader has also estimated the impact of the Catalan crisis on tourism to be in the range of €319 million. If the crisis were to persist, the growth forecast for 2018 would shrink to 2.8%

Even though the secessionist bid shaved three-tenths of a percentage point from tourism activity in 2017, it was still a record year for Spain: over 82 million international visitors, an 8.9% leap from 2016, and a 1.5% increase in average spending per tourist, according to tourism ministry estimates released this week.

This makes Spain the world’s second-most popular tourist destination, behind France and ahead of the United States.

The tourism industry’s share of GDP has increased to 11.5%, representing €134 billion. And industry growth resulted in 77,501 new jobs in 2017, said Exceltur.

Political instability in the last quarter of the year, following the illegal independence referendum of October 1, negatively affected international tourism, particularly in geographically close markets like France, where visitor numbers were down 19.7% year on year in the October–November period. German visitor numbers fell 14% and the UK’s retreated 8%. Asian markets sent fewer visitors as well. However, tourists from the Americas grew notably in number, particularly those from Argentina (a 74% rise) and the United States (18.2%).

Slower growth in 2018

Exceltur said that 2018 “will be another excellent year” and predicted 3.3% growth for the tourism sector, higher than the forecast for the Spanish economy as a whole but lower than in the last two years – and that is without factoring in the potential effects of a protracted crisis in Cataluña.

The lower growth figure can be partially explained by a gradual recovery of alternative destinations that compete directly with Spain, such as Turkey, where terrorist attacks have driven tourism down.

“The challenge for the tourism industry now is to ensure sustainable growth with a view to the future,” said José Luis Zoreda, executive vice-president of Exceltur, at a news conference.

Despite the optimistic forecast, Exceltur is warning about a drop in revenues in early 2018: 10% for hotels, 6.8% for car rental companies, and 3.5% for transportation firms. The business association said “there will be staff adjustments” to make up for these losses.

Original story: El País (by Nahiara S. Alonso)

Edited by: Carmel Drake

Blackstone’s Socimi Will Spend €25M On Corporate Operations

3 July 2017 – Eje Prime

Fidere, the social housing Socimi owned by the US fund Blackstone, is growing rapidly through acquisitions. Over the course of this year, the company will spend €25 million on the acquisition of Spanish companies dedicated to rental housing. In this way, Fidere will add new assets to its portfolio, according to explanations provided by market sources to EjePrime.

Fidere’s purpose is to acquire and manage residential rental assets in Spain. Since its incorporation onto the Alternative Investment Market (MAB) on 29 June 2015, the group has acquired 3,365 new residential units (as well as storerooms and garages) for rental in the Community of Madrid. As at 31 January 2017, the average occupancy rate of these residential units amounted to 92.9%.

With this declaration of intentions, Blackstone is going to continue adding assets in the Spanish market with the aim of leading the residential rental market in the country. With a portfolio of 12,000 homes under ownership in Spain, the fund has constituted several companies to implement its strategy after having invested €7,000 million in the country.

The fund, which owns the majority of its properties in Cataluña (followed by its portfolios in the Community of Madrid, the Community of Valencia and Andalucía) has decided to back the rental market in Spain in the face of changes in residential demand in the country, above all, amongst young people.

To carry out its plans, Blackstone has added three new Socimis to its portfolio of Socimis, which until now comprised Fidere alone. It now owns Albirana Properties, which has been trading on the MAB since March, Pegarena and Tourmalet (which have not debuted on the stock market yet) and the servicer Anticipa Real Estate (…).

Albirana Properties, for example, manages 5,000 homes, whilst Pegarena and Tourmalet, companies that have been constituted already, will start incorporating some of Blackstone’s portfolio in Spain. The fragmentation will allow these asset packages to be sold more easily in the future. Created in New York in 1985, Blackstone manages assets around the world worth €335,950 million.

Blackstone and its commitment to property

The fund, which is one of the largest private investment vehicles in the world, set a new milestone at the beginning of the month by managing to raise €7,800 million to launch its fifth fund specialising in real estate. The new instrument, classified as opportunistic by the firm itself, will operate under the name Blackstone Real Estate Partners Europe V (BREP Europe V).

The strategy that Blackstone adopts with these types of funds is to locate and acquire high-quality, well-located assets at significant discounts, to manage them appropriately and then sell them, after achieving the proposed objectives.

The Blackstone group, which founded its real estate arm in 1991, administrates around €91,000 million in capital from various investors through its real estate subsidiary. Its real estate portfolio includes offices, retail premises, hotels, industrial assets and residential properties in the US, Europe, Asia and Latin America.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake