Tag: Torre Espacio

‘Quirón Salud’ Considers Opening A Hospital In The Fifth Tower

7 October 2015 – Cinco Días

The Quirón Salud group is currently considering opening a hospital in the so-called fifth tower, the skyscraper that the Villar Mir group is planning to build at the northern end of the Paseo de la Castellana, on land that was previously home to Real Madrid’s former Ciudad Deportiva. This step would enable the company led by Juan Miguel Villar Mir to construct this emblematic building.

The Villar Mir group was awarded the plot of land next to the Cuatro Torres in April. The company is planning to build a new skyscraper on the site and has always hoped that building would house a private health centre. The corporation won this project, through its subsidiary Inmobiliaria Espacio, but does not have any tenants for the property for the time being.

Initially, the sector thought that the US hospital group Mount Sinai was the most likely candidate to occupy the skyscraper, in its first expected foray into Spain, but the numbers did not stack up for the healthcare company – it concluded that the rental charge was too high for a social use building, according to sources close to the operation.

Now, the baton may be passed to Quirón Salud, the main private hospital group in Spain, which was created following the merger of IDC Salud (formerly Capio) and Quirón. According to sources at the company, it is currently evaluating the project. The company has 70 health centres, including the Fundación Jiménez Díaz, and manages several public hospitals in Madrid, as well as a number of prestigious clinics such as La Luz, San José and the Ruber, in the capital and Teknon and Dexeus, amongst others, in Barcelona. However, the company has not yet confirmed what kind of centre or facilities it would consider opening in the tower.

Two weeks ago, it was announced that Villar Mir will receive help from the Swiss fund Corestate Capital to construct the skyscraper. In a statement, the company announced that the project will require investment of €240 million, and although it did not specify how much each partner will invest, it did say that the possible tenants will be “a hospital, university or government body”. In fact, construction of the property is not expected to start until the tenant (client) has been identified so that the building can be tailored accordingly.

Over the last few days, the possibility of opening a business school in the tower has been evaluated. Some market sources insist that it will be hard for Quirón to make the numbers stack up to open a hospital in the skyscraper.

Villar Mir acquired the plot of land in a tender after presenting the highest bid; the company will pay the Town Hall an annual fee of €4 million for 75 years, in other words, €300 million in total. The plot has a surface area of 67,000 m2 and a buildability of 70,000 m2, of which 52,500 m2 must be allocated to social use (for example, a hospital); the remainder will be developed as retail space. That part is precisely what the hundreds of employees who work in the four adjoining towers want the most, given the lack of restaurants and services currently in the area.

Villar Mir also owns one of those skyscrapers, Torre Espacio, which is currently up for sale, with an asking price of around €600 million. The possible bidders include international funds, such as UBS, Aca, Corporación Financiera Alba and Pontegadea.

Original story: Cinco Días (by A. Simón)

Translation: Carmel Drake

Villar Mir Joins Forces With Corestate To Fund Fifth Tower

24 September 2015 – Expansión

The company led by Juan Miguel Villar Mir has signed an agreement with the Swiss fund Iberian Corestate to jointly develop the plot of land next to the Cuatro Torres complex, on the Paseo de la Castellana in Madrid, following the problems he encountered trying to finance the project by himself.

Grupo Villar Mir decided to look for a partner to reactivate the project to construct a new building on the plot of land located behind the Cuatro Torres complex, following the difficulties it faced tackling the construction alone, due to the need to inject €500 million into OHL. To this end, Villar Mir has signed an agreement with the Swiss fund Corestate, a real estate investment specialist, to invest €240 million in the project through its company Iberian Corestate Capital Advisors. (…).

Last year, Villar Mir was awarded the concession to operate the plot of land, which is owned by the Town Hall of Madrid, after it agreed to pay a fee of almost €4 million per year for the next 75 years. Villar Mir’s company, Espacio, had planned to construct a tower on the site, of a similar height to the other four skyscrapers (the tallest one measures 250m), which would require an investment of around €450 million.

That is not the only asset that Villar Mir owns in the complex. The company invested €400 million in Torre Espacio, an office building that was inaugurated in 2007, of which €187 million was used to purchase the land.

Tenant

(…). Following the failed negotiations with the Mount Sinai hospital group…Villar Mir is now studying other options, including the option of signing a deal with a tenant form the world of academia or changing the structure of the building to make it more suitable for the operations of a hospital company.

Original story: Expansión (by Rocío Ruiz and Carlos Morán)

Translation: Carmel Drake

The March Family Enters The Bidding For ‘Torre Espacio’

31 July 2015 – Expansión

Torre Espacio has a new suitor, in the form of the March family, which has formally expressed its interest in acquiring the skyscraper in the Cuatro Torres complex (Madrid) from the current owner, Grupo Villar Mir. The family is up against Amancio Ortega – the owner of Inditex – the German fund Deka and Canada Pension Fund.

Inmobiliairia Espacio, the holding company of Villar Mir, put the property on the market at the end of June and engaged the consultancy firm Aguirre Newman to manage the sale. The company has already received preliminary bids for the property, which it plans to sell for between €650 million and €700 million, whereby taking full advantage of the revival in the real estate sector currently underway in Spain. However, the offers received for Torre Espacio so far range between €500 million and €600 million, albeit above its book value (€440 million). Villar Mir invested €400 million in the construction of the building.

The firm’s intention was to select one or two candidates to participate in exclusive negotiations, with the aim of closing the deal in October.

The March family’s bid for Torre Espacio is indicative of its growing interest in the real estate sector. The family has just acquired Ahorro Corporación’s headquarters on the Paseo de la Castellana (Madrid) for €147 million through its company Corporación Financiera Alba.

Original story: Expansión (by Y.B.)

Translation: Carmel Drake

Investment In Offices Soars By 85% In H1 2015 To €1,300M

21 July 2015 – Expansión

Real estate investment in office buildings soared by 85% during the first half of the year to reach €1,300 million and whereby record “one of the best results in the last twenty years”, according to data from Aguirre Newman.

Madrid accounted for three quarters (75%) of the total investment, which was mostly concentrated in the business district of the capital.

Aguirre Newman attributes this remarkable increase in real estate investment (which does not include Merlin’s purchase of Testa), to the “consolidation of the growth of the economy”, the “return” of financing and the prospects of recovery in office rental prices in Spain, which are currently offering higher returns that investing in the stock market.

The firm considers that this “strong investment activity” will continue during the second half of the year, given the operations that are currently in the pipeline, such as the sale of Torre Espacio, one of the four skyscrapers in the Cuatro Torres business district, which the Villar Mir Group is looking to sell, but continue to occupy as the tenant (…).

Socimis and institutional investors led the real estate purchases during the first half of the year – they accounted for almost two thirds (65%) of the total acquisitions made.

On the sales side, financial institutions, insurance companies and institutional investors were the main sellers of property.

The interest shown by investors in office buildings has stemmed from the recovery that the sector is experiencing. During the first half of the year, the rent paid for those kinds of buildings increased by 23.7% in Madrid and 49% in Barcelona.

During H1 2015, in the capital, lease contracts were signed for offices with a total surface area of 262,790 m2 and in Barcelona, the figure was 177,499 m2.

Therefore, the average price of rents continued to rise, to reach €25.35/m2/month in Madrid, where prime rents are now €31/m2/month; meanwhile the average rent in Barcelona is €15.96/m2/month.

Aguirre Newman is confident that the increases in demand for office space and in office rental prices will continue for the next few months.

Original story: Expansión

Translation: Carmel Drake

Pontegadea, Deka & CPPIB Submit Bids For ‘Torre Espacio’

8 July 2015 – Expansión

Amancio Ortega’s investment company Pontegadea, the German investor Deka and the Canadian pension fund CPPIB have all submitted bids to acquire the Madrilenian skyscraper from Villar Mir.

The sales process for Torre Espacio, the skyscraper owned by Villar Mir in the Madrilenian Cuatro Torres complex, is progressing according to plan. Yesterday, one month after the property was first listed on the market, Villar Mir received offers from some of the companies it had selected to participate in the process.

Villar Mir, which owns the building through its real estate company Espacio, worked together with the real estate consultancy Aguirre Newman to select and invite around a dozen investors to participate in the sales process, rather than opting for a mass tender, in order to close the deal as soon as possible. Those selected included the German funds Deka, Reef and Patrizia, the Abu Dhabi fund Asia, the Socimi Merlin Properties, the real estate company Colonial, Amancio Ortega’s investment company Pontegadea, the sovereign fund Singapur GIC (which invests in Spain jointly with the real estate company GMP) and the Canadian pension fund CPPIB.

Of those, Deka, Canada Pension Plan and Pontegadea all submitted proposals yesterday. Indeed, the investment arm of Amancio Ortega has been one of the favourites to take ownership of the property since the process was launched, on the basis that the company has access to immediate liquidity and the building would be a perfect fit with its existing portfolio, which includes other large office and commercial buildings in major European capitals, such as London and Madrid, as well as in the USA.

The aim of the group controlled by Juan Miguel Villar Mir was to sell the property for between €650 million and €700 million, and whereby benefit from the investor boom that is taking place in the Spanish real estate market. The company invested €400 million on the construction of the building, including the amount it paid to Real Madrid for the land (€187 million). Nevertheless, according to sources close to the process, the offers received range between €500 million and €600 million. (…).

Tenants

Torre Espacio opened in 2007 and has office space of c. 60,000 m2, distributed over 57 floors. The tower is 236 metres high and its tenants include large international corporations, such as British American Tobacco and Red Bull. It has an occupancy rate of 85% (84.3% at the end of 2014). Other tenants include the embassies of Australia, Canada, the Netherlands and the UK.

Furthermore, 55.1% of the building is occupied by the Villar Mir Group. OHL occupies around ten floors.

To make the purchase more attractive, the owner of OHL has offered to continue as a tenant and guarantee the new landlord rental income of €34/m2/month. However, the market does not believe that such a rental price can be maintained considering that the maximum rent in the best buildings on the Castellana barely exceeds €30/m2/month. (…).

Following the receipt of the bids, one or two candidates will be chosen to participate in exclusive negotiations, with a view to closing the transaction in October. Nevertheless, the proposed structured of the transaction, as well as the difference in terms of price expectations between the vendor and the buyers, may hamper the completion of the transaction. (…).

Original story: Expansión (by R. Ruiz and D. Badía)

Translation: Carmel Drake

Villar Mir Guarantees Torre Espacio’s Buyer Rent Of €26M

3 July 2015 – Cinco Días

Inmobiliaria Espacio, which forms part of the Grupo Villar Mir, wants to generate the maximum amount from the sale of the iconic Torre Espacio, one of the four skyscrapers constructed on Real Madrid’s former Ciudad Deportiva. To this end, it is willing to guarantee 100% of the building’s rental income, and pay the difference if the new owner does not reach the maximum occupancy rate.

According to sources close to the operation, Villar Mir has put a figure on the table of €26.4 million per year. This means that the purchaser will receive the same monthly rent, regardless of the occupancy rate of the building.

Torre Espacio, which has 57 floors and is 230m high, has a total leasable area of 60,142m2, as well as 1,173 parking spaces. The building currently has an occupancy rate of 85%. Companies in the Grupo Villar Mir occupy 55% of the leasable area and the corporation, which is controlled and chaired by Juan Miguel Villar Mir, will continue to rent offices in the skyscraper. The other tenants include four embassies: Canada, UK, Australia and the Netherlands.

The real estate company has offered to guarantee rental income of €35 per m2 per month, which represents an annual rent of €25.2 million. In addition, the rental cost of the parking spaces amounts to another €1 million, which takes total annual rent to €26.4 million. Inmobiliaria Espacio would retain control of the rental management of the property and of finding tenants. Nevertheless, it is likely that some investors will waive their right to the guarantee, as they will prefer to take care of the management side themselves.

With this commitment, the real estate company thinks that it will come close to the €600 million asking price for the sale of the tower. That would represent an annual yield of 4.40%, but that is rather low, according to market sources; if interest rates rise over the next few months, the viability of the tower’s financing may be put at risk.

Villar Mir has set a minimum asking price of €500 million, which represents a valuation of around €8,500/m2. The market considers that price to be high, since Pontegadea, the family office owned by Amancio Ortega, paid around €5,000/m2 for its acquisition of Torre Picasso, and the March family paid around €7,500/m2 for Ahorro Corporación’s headquarters in Castellana, 89.

On the plus side, Villar Mir’s real estate group may benefit from increased liquidity in the market and the interest shown by international funds in the recovery of the country. Even so, analysts do not expect that many candidates will have the capacity to invest €500 million or €600 million in an asset that is not in Azca, the prime business district in Madrid. (…).

‘Due diligence’

The group chaired by Villar Mir has launched an accelerated process for the sale of the building. Anyone wishing to becoming the new owner must submit non-binding offers by next Tuesday. The real estate company expects to choose the best offer during the course of the week.

Then, the candidate with the best offer will begin the due diligence process, which will last for three weeks, until 29 July – all of the experts in the market consider this timeframe to be tight. The binding offer will be made by 29 July and the transaction will be closed during the first week of August.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Villar Mir Puts ‘Torre Espacio’ On The Market For €700M

30 June 2015 – Expansión

A new mega real estate transaction is taking shape in Spain, involving ‘Torre Espacio’ – the 236 metre tall skyscraper that the Villar Mir Group owns in the Cuatro Torres Business Area, in Madrid.

The Villar Mir Group, owner of the OHL construction company and the Espacio real estate company, has just put one of the most iconic buildings in the capital up for sale. According to sources close to the process, the property, which contains 60,140 m2 of office space, has an asking price of between €650 million and €700 million.

Villar Mir’s decision to sell the building, through a process organised by the consultancy Aguirre Newman, comes barely a month after the company was awarded the plot of land adjoining the Cuatro Torres, where it will construct a new skyscraper.

The sale of Torre Espacio, which opened in 2007, will generate significant capital gains for the company owned by Juan Miguel Villar Mir, which invested €400 million to buy the site and construct the building. That amount includes the €187 million it paid to purchase the land, as well as all of the financial expenses incurred during the construction period.

Torre Espacio, which was the first of the four buildings in the complex to open, has an occupancy ratio of 85%. Its tenants include the Villar Mir Group, some of its subsidiaries (Fertiberia, Ferroatlántica and Espacio), as well as the embassies of the UK, Netherlands, Canada and Australia.

According to initial calculations, when the tower is fully leased, it will generate annual income of €28 million.

Original source: Expansión (by Rocío Ruiz)

Translation: Carmel Drake