Spain’s Largest Landlords are Merlin, Colonial, GMP & Mapfre

19 April 2019 – Expansión

Merlin, Colonial, GMP and Mapfre: three Socimis and one insurance company together own 16% of the total office space in Madrid. Blackstone, Realia, Mutua Madrileña, Tristan, Pontegadea and Starwood complete the Top 10 ranking.

According to a report from Deloitte, the ten largest landlords own more than 3.1 million m2 of leasable space in Madrid, out of a total spanning more than 13 million m2 (24%). In Barcelona, there is 6.1 million m2 of leasable space.

Leading the ranking is Merlin, which owns 7% of the total stock in Madrid and more than 3% in Barcelona. Its 140-strong office portfolio is worth €5.5 billion and accounts for 45% of its total assets. The Socimi’s tenants include BBVA, Endesa, Inditex and PwC, and its star assets include Torre PwC in Madrid and Torre Glòries in Barcelona.

Behind Merlin is Colonial, which owns 3.8% of the office stock in Madrid and 4.6% in Barcelona (where it is the market leader). Its key assets include the building located on Paseo de la Castellana, 52, two properties on Calle Miguel Ángel (numbers 11 and 23), all in Madrid, and Torre Marenostrum in Barcelona.

Completing the podium is GMP, which owns 2.8% of the gross leasable area in Madrid, including Torre BBVA and Torre Ederra, both in Azca. Meanwhile, the insurance companies Mapfre and Mutua Madrileña own 2.7% and 1.4% of the total stock in the Spanish capital, respectively.

In addition, the funds have strengthened their positions in recent months. The US fund Starwood purchased a portfolio of offices in Madrid and Barcelona from Autonomy for €125 million. It also acquired the San Fernando Business Park, in conjunction with Drago, from Oaktree for €120 million.

The British fund Tristan has also been active, with the acquisition of an office complex on Avenida de Manoteras in 2017 and the purchase of six offices spanning 78,000 m2 from Colonial in 2018 (…).

Original story: Expansión (by R. Arroyo)

Translation/Summary: Carmel Drake

GMP Signs Spain’s First “Green” Loan with BBVA: €68M for Castellana 77

9 December 2018 – Eje Prime

The Spanish real estate sector has obtained its first green loan. Specifically, the Socimi GMP, controlled by the Montoro family, has signed a loan of that type with BBVA to finance the project to renovate Castellana 77, an office building in the Azca area. In total, the real estate company has received €68 million.

Specifically, the Socimi acquired the building from BBVA in 2015. GMP has recently completed work to renovate the property. The company’s commitment to obtain the loan has been established around the fact that the money will be used to promote sustainability, according to Expansión.

GMP, which has the Singapore sovereign fund (GIC) amongst its reference shareholders, has been working for a while to create a portfolio of sustainable buildings. 80% of its assets have the Leed stamp and, last June, one of the jewels in its crown, the former Torre BBVA, obtained the Well Oro certificate, becoming the first property in Spain to merit that distinction.

During the first half of 2018, the Socimi saw its profits soar by 81% to exceed €110 million. The company recorded revenues of €49.5 million between January and June, down by 0.8% compared to the same period in 2017.

Currently, GMP has a portfolio of sixteen assets, which sum a total of twenty-seven buildings and a gross leasable area (GLA) of 360,000 m2. All of them are located in Madrid, along with the 65,105 m2 of buildable space that the group owns, concentrated in the urban developments of Valdebebas and Las Tablas. The company’s portfolio of projects also includes a residential tourist development in Alicante, which is called Las Colinas Golf&Country Club.

Original story: Eje Prime 

Translation: Carmel Drake

BBVA Sells its Former HQ in Bilbao to Angelo Gordon for c. €100M

25 September 2018 – Expansión

The former corporate headquarters of Banco de Vizcaya is being converted, 50 years later, into Torre Bizkaia. BBVA, the owner of the property at number 1 Gran Vía in Bilbao, has reached an agreement with the investment fund Angelo Gordon to sell it the building for around €100 million.

The sale – which has been subject to negotiations since before the summer – will close within the next few days, according to sources in the sector, and will become the US fund’s largest operation in Spain, where it purchased the Hotel Dolce Sitges in Barcelona from Oaktree a year ago for €40 million.

The new owner already has tenants for the property. In addition to the Irish multi-national textile retailer Primark, which has committed to lease the ground and first five floors for 30 years, the Bilbao local government is going to lease the remaining floors to centralise its provincial services in the tower, which is going to be called Torre Bizkaia.

That move was announced yesterday by the President of Bizkaia, Unai Rementería (…). According to Rementería, BBVA’s departure from the building represented the end of an era, with which the financial weight of Bilbao was extinguished. “Now the provincial government is lighting up the tower again and is starting a new era of new ideas and businesses”, he said.

In addition to the services of the provincial council, the property will house on eight of its floors, an international centre for entrepreneurship, a project promoted by the provincial council and the Town Hall of Bilbao. According to Rementería, those eight floors will be “the heart” of the tower, and through them, they will seek to boost activity, recover economic weight, and reinforce the innovative profile and entrepreneurial spirit of Bilbao and Bizkaia.

The property on Gran Vía was constructed in 1969 as the headquarters of Banco Vizcaya, on the location occupied by the financial institution’s first headquarters. The building has 21 storeys in total, as well as the ground floor, and spans a total above-ground surface area of 23,000 m2.

Abandon

Following the merger with Banco Bilbao, the BBVA tower housed the operating headquarters of the bank, although the corporate headquarters remained – as it does today – in the former headquarters of Banco Bilbao in Plaza de San Nicolás. In recent years, the financial institution has gradually abandoned the property, which all of the employees left in March 2016.

Original story: Expansión (by M. Á. F.)

Translation: Carmel Drake

Savills & Aguirre Newman Complete Their Merger

3 January 2018 – Eje Prime

Without any fuss whatsoever, Savills and Aguirre Newman ended the year by completing their merger. On the last working day of the year, the British company announced to the London Stock Exchange that it had finally signed the agreement to buy the Spanish real estate consultancy. The company, which announced its intention to acquire the Madrid-headquartered business through the same channel on 28 July 2017, will pay €67 million by way of consideration.

According to the document that proves the purchase of Aguirre Newman, the British consultancy firm paid €42 million at the time of the signing and will pay the remaining balance in instalments of €5 million over the next five years, to reach the €25 million agreed between the two parties.

In theory, Savills had planned to complete the purchase before 30 November, however, administrative setbacks delayed the signing. Nevertheless, the company said that all of the paperwork was completed before the end of 2017 (…).

The need of both groups to sign their merger before the end of the year was also an administrative priority, given that they wanted to start the new year afresh to operate under the brand, Savills Aguirre Newman, from the beginning of 2018. Moreover, this change will result in a significant number of changes to its operations in Spain. The first will see it move to a new headquarters in the financial heart of Madrid.

The Spanish subsidiary of Savills has set the wheels in motion to move its offices to one of the capital’s main skyscrapers. After lots of negotiations, the new consultancy firm will move into the Castellana 81 building, better known as the Torre BBVA. The company will lease 8,000 m2 of space after reserving six floors in the building from the Socimi GMP, which owns the asset.

Built in 1981, Torre BBVA is one of the symbols of the Azca financial district in the Spanish capital. GMP renovated the asset after buying it and, coincidently, Aguirre Newman, along with CBRE, were appointed to look for new tenants for the building. The consultancy firm plans to move into its new offices as soon as the integration of the two companies has been formalised.

In terms of the business of the two consultancy firms in Barcelona, sources in the Catalan capital indicate that it is very likely (although not definite) that the Savills staff located in the Catalan capital will move to the offices that Aguirre Newman has on La Diagonal in Barcelona, given their location and capacity.

Another matter still up in the air is the duplication of the entire organisational structure of both companies. Savills’ intention is to maintain the entire workforce, although it is more than certain that many of the directors will leave the company voluntarily, according to sources consulted by Eje Prime.

The Presidents of Aguirre Newman, Santiago Aguirre and Stephen Newman, and the President of Savills España, Rafael Merry del Val, will be appointed to the Board of Directors of the combined company, in the following roles: Santiago Aguirre, Chairman of the Board; Stephen Newman and Rafael Merry del Val, Executive Co-Vice-presidents.

The senior management team of Aguirre Newman and Savills España will retain and include José Navarro, current CEO of Savills España; Javier Echeverría, CEO of Aguirre Newman; Jaime Pascual-Sanchiz, Executive Director General of Aguirre Newman, and Ángel Serrano, Director General of the Business at Aguirre Newman. The office in Barcelona is going to be led by Anna Gener and Arturo Díaz, as the CEO of Savills Aguirre Newman and President of the group in Barcelona, respectively. The real headache for Savills Aguirre Newman will come with the next level of management, although those roles will not be assigned for several weeks yet (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Snapshot Of The MAB’s Real Estate Companies

4 September 2017 – Expansión

An attractive tax structure and investors’ appetite for real estate assets have led to a veritable flood of Socimi debuts on the stock market in recent years. With the exception of Merlin and Colonial – which form part of the Ibex – and Axiare, Hispania and Lar España – which are listed on the main stock market – the other Socimis trade on the Alternative Investment Market (MAB). In 2013, that market opened a new segment for this type of investment vehicle, which now comprises 40 companies.

To be incorporated, Socimis must have a minimum share capital of €5 million and invest in urban properties allocated for rent. These companies, which must be listed on regulated markets, are exempt from paying Corporation Tax in exchange for fulfilling certain obligations such as the distribution of dividends in a systematic way.

The first Socimi to debut on the MAB was Entrecampos Cuatro. That company, constituted in 2004 as a merger of several companies from the Segura Rodríguez family group, was responsible for firing the Socimi-starting gun on the MAB in November 2013.

The 40 Socimis now listed on the MAB have a combined market capitalisation of more than €7,000 million and comprise a very heterogeneous group both in terms of size, as well as by specialisation and category. The companies range from family groups to institutions (with one fund or professional investor holding a stake) to publicly owned entities (with numerous shareholders).

Of the Socimis currently listed on the MAB, the largest by a long way is General de Galerías Comerciales (GGC). That Socimi, which currently has a market capitalisation of €2,547 million, debuted on the stock market in July and, despite its size, is controlled almost in its entirety by a single shareholder, the Murcian businessman Tomás Olivo. GGC is exceeded in terms of market capitalisation only by Merlin and Colonial.

GGC is followed by the Montoro family’s real estate firm GMP, in which the fund Singapore GIC owns a 30% stake. That company currently holds 27 properties in its portfolio, including several iconic buildings, such as the historical Torre BBVA (renamed Castellana 81 due to its location) and a few metres away, Castellana 77 (also known as Torre Ederra). Other large listed Socimis include Zambal, the Socimi managed by IBA Capital, with investments in offices and commercial assets; and Bay, the Socimi owned by Hispania and Barceló. The latter, which focuses on the tourist sector, held 21 assets with a gross value of €790 million at the end of last year and since then has purchased another three assets: Hotel Selomar in Benidorm for almost €16 million; Hotel Fergus Tobago in Palmanova for €20 million; and the Armadores de Puerto Rico company for €6 million.

Shopping centres are also present on the MAB. In this way, for example, Intu owns two listed shopping centres: the Socimi Asturias Retail & Leisure, owner of the Intu Asturias shopping centre (previously Parque Principado), which has a total approximate surface area of 75,000 m2; and Zaragoza Properties, owner of Puerto Venecia Shopping Resort, in Zaragoza, with a surface area of more than 200,000 m2.

Another example is the Socimi Heref Habaneras, which owns the Habaneras shopping centre in Torrevieja (Alicante).

Residential market

One of the investment segments that has gained weight amongst the specialist Socimis in recent times is the residential market. Specifically, the private equity fund Blackstone has two listed Socimis. The largest, Fidere, debuted on the stock market in June 2015 with an asset value of €304.3 million and a portfolio of 2,688 social housing properties for let purchased during the crisis.

Moreover, the fund listed another Socimi on the stock market in March, Albirana Properties, which owns more than 5,000 assets spread all over Spain, most of which are rental homes (….).

A few weeks ago, the MAB introduced a modification to its rules to tighten up the access requirements for new Socimis. This change, which came into force in August, requires Socimis to have minority shareholders in their shareholdings when they debut on the stock market. Until then, companies had a year to fulfil the requirement. This led to an intensification in terms of the number of Socimi debuts. In July alone, seven companies joined the MAB: GGC, Bay Hotels & Leisure, Grupo Ortiz, Kingbook Inversiones, AM Locales Property, Colon and Numulae (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hays Is Set To Become Castellana 81’s First Tenant

16 September 2016 – Expansión

Azca, the financial heart of Madrid, is set to have a new tenant soon. The firm in question is the recruitment firm Hays, which has announced that it is going to transfer its Madrid offices to the building on Castellana 81, popularly known as Torre BBVA, due to its former tenant. The real estate consultancy Cushman & Wakefield has advised the deal.

The firm will make the move in January once the current renovation work on the building has been completed. In addition to Hays, at least one other firm has expressed interest in moving into the building. “For reasons of confidentiality, we cannot comment about the rest of the space leased, only that the marketing of C81 is receiving a good response in the market”, said a spokesman from the real estate company.

Castellana 81 has been owned by the Socimi GMP since 2007, when the real estate company purchased the building, together with three others, from BBVA in exchange for a plot of land in Las Tablas, where the financial entity has constructed its new corporate headquarters. Following BBVA’s move at the end of last year (the bank still occupies five floors of the tower that carries its name), GMP decided to completely renovate the property, which was designed in 1971 by the architect Sáenz de Oiza.

Renovation of Azca

Castellana 81 measures 38,800 sqm and is 107m tall. It is not the only building being renovated in the Azca area. Castellana 77, also owned by GMP, is currently being updated to turn its 16,000 sqm surface area into offices.

In the case of Torre Titania, work has just been completed on the skyscraper owned by El Corte Inglés next to its store in Nuevos Ministerios, to accommodate its tenant, the professional services firm EY.

Another historical building in the area that is being completely renovated is Torre Europa. The property, owned by the real estate group Infinorsa, has taken advantage of KPMG’s departure (which has moved to Torre de Cristal in the Cuatro Torres) to renovate the building, with an estimated investment of €20 million.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Rental Prices Will Rise On La Castellana After The Summer

6 July 2016 – Expansión

Madrid’s financial district is refreshing its image and prices are set to rise in the area after the summer. The Spanish capital’s La Castellana thoroughfare is aiming to attract tenants who are willing to prioritise the quality of space over rental costs.

Whilst investors remain attentive to the course of events unfolding in the City (London), following Brexit’s victory in the EU referendum held on 23 June, and the formation of a new Government in Spain after the election on 26 June, business is continuing as usual and the capital’s financial district is getting ready to open its doors to some new tenants. Some of the countries in the Eurozone may, over time, attract some of the activity that has been performed in the United Kingdom until now, and if this becomes a reality, Madrid’s financial district could represent a good option for companies currently headquartered in London.

Torre Europa is preparing itself to this end. Grupo Infinorsa has launched a process to renovate the property following KPMG’s departure and will allocate €20 million to the modernisation of its facilities. In the same way, GMP is in the middle of renovating the Castellana 77 skyscraper, known as Torre Ederra – the former headquarters of Saint Gobain – as well as Castellana 81 – Torre BBVA – to adapt them both to the new demands of the market. Another building that is looking for new tenants is Torre Picasso following EY’s move to Torre Titania. (…).

Sources at Cushman & Wakefield explain that demand is not growing in Madrid at the moment. “GDP levels are similar to during the years before the crisis, and so around 200,000 sqm of space is being leased out per year. The main explanation is uncertainty”. Moreover, it seems like the slowdown is more acute in the financial district, due to the quality of available stock and the cost. (…).

José Miguel Setién, Director of the Office Business at JLL, explains that renting in Madrid has been cheap until now and the price ratio is still very attractive when compared with other major European cities; this means that there is still a lot of potential in the Spanish capital. “Provided there are no political or structural macroeconomic problems, the figure trend is that the market will continue to rise”, he added.

The CEO of Aguirre Newman, Jaime Pascual-Sanchiz de la Serna, explained that offices in prime areas, as well as in the market in general, have been very static in terms of renovations and new projects. Pascual-Sanchiz says that several projects launched within the last 12 months will come onto the market within the next year. In his opinion, they will be a good indicator for measuring the evolution of offices. “The owners of those properties, including Pontegadea, Mutua Madrileña and the Consorcio de Compensación de Seguros do not have financial problems, and are not desperate to lease their properties at any price”. For the expert, although we are seeing small and medium-sized operations in the area, the large moves, which are more dependent on the domestic and international political situation, will have to be unblocked after the summer.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

GMP Socimi Finalises Its Debut On The Stock Exchange

17 May 2016 – El Confidencial

One of Spain’s largest real estate groups is about to list on the stock exchange. GMP Socimi, the company jointly owned by the Montoro family (70%) and the Government of Singapore (30%), now has all the pieces in place for its stock market debut.

To this end, the company has engaged the entity Renta 4 as registered advisor and has commissioned CBRE to value its assets, according to sources familiar with the company.

The debut on the stock market is a mandatory requirement for GMP, which was constituted as a Socimi in October 2014. The rules for this type of company grants a maximum period of two years to become a listed company. In fact, this rule has been behind all of the recent debuts of such companies on the MAB.

In parallel with its stock market listing, the real estate company has been negotiating with its creditor entities to secure the refinancing of its financial commitments, which exceed €750 million, according to its accounts for 2014, the most recent year for which figures are available, and the majority of its debt is due to mature in 2017.

Although the gross value of the company’s assets amount to €1,300 million, the company was valued at just over €600 million two years ago, when the Singapore sovereign fund, GIC, acquired its 30% stake for €200 million.

Nevertheless, it was precisely the involvement of the Asian giant that allowed the Montoro family to adjust its financial situation and secure the necessary financing to sign operations such as the purchase of Castellana 77. All of this, combined with the recovery of the real estate market means that the group’s next valuation is expected to be much higher than the amount assigned by GIC at the time of its investment.

The Montoro family’s Socimi has been one of the great survivors of the crisis and its buildings include the iconic Torre BBVA on Paseo de la Castellana, as well as the property on Calle Génova, 27.

Since GIC became a shareholder, the company has handled operations such as the aforementioned purchase of Castellana 77 for €90 million; the former headquarters of Altadis, on the Madrilenian Calle Eloy Gonzalo, for €30 million; the office building located on Condesa de Venadito 1; the headquarters of Cortefiel and SGS in Madrid; and the development of a corporate building in Las Tablas.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Gmp Seeks New Tenant For Torre BBVA

13 October 2015 – Expansión

An office building with a surface area of almost 40,000 m2, located in the best financial district of Madrid, has been put onto the market for the first time ever, 40 years after its inauguration. The building in question is Castellana, 81, known as Torre BBVA, which has housed the bank’s headquarters since 1971, when the entity won a competition to construct its head office in the capital.

Four decades later and following the acquisition of the building by the real estate company Gmp in 2007, the iconic skyscraper is now looking for a tenant, as its historical occupant is moving to its new headquarters in Las Tablas. “This is an exciting project for the company. It is the first time that this building, which we have owned for eight years, has gone on the market. Since we acquired the property, we knew that BBVA would be leaving, and so we have been preparing accordingly – as such, we are putting the property on the market just at the right time in the cycle”, explains Xabier Barrondo, CEO of Gmp.

Before the arrival of the new tenant, the real estate company owned by the Montoro family and the Singapore sovereign fund GIC, will undertake a significant refurbishment of the building to update it. To this end, it has commissioned the architecture studio Ruiz de Barbarín. “We have contracted OHL, which is already working on the building. Our vision is to supply the market with a building that has the best services, in the best location in Madrid”, says the CEO.

In total, Gmp will invest around €30 million updating this building, which it hopes will obtain the ‘Leed Oro’ certification. This certificate attests that the property has the most energetically efficient systems. Moreover, the building will dedicate 2,300 m2 of space to catering, auditorium and physiotherapy services.

BBVA will not leave the building completely, since it will continue to occupy around 6,000 m2, on the top five floors (out of the total space – 38,800 m2 over 28 floors).

It is expected that the skyscraper will have its new tenant by the time the refurbishment work is completed, at the end of 2016. To this end, Gmp has engaged the consultancies Aguirre Newman and CBRE. (…).

This is not the only project that Gmp is currently working on; it is also renovated Torre Ederra, on Castellana, 77 and a property it has acquired on Eloy Gonzalo, 10, both in Madrid.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake