Tag: Torre Foster

Deloitte: Tertiary Real Estate Inv’t Amounts to €9.7bn in 2017

27 December 2017 – Expansión

An increase in property prices has led to a 22% reduction in the purchase of non-residential assets in 2017 with respect to 2016.

The boom that has marked the real estate investment sector in Spain since 2014 is starting to show signs of slowing. That is according to the most recent non-residential investment figures, which, with just a few days to go before year-end, are reflecting a decrease of 22% with respect to 2016.

According to a market study performed by Deloitte Real Estate, investors spent €9.7 billion this year on tertiary properties (offices, hotels, commercial and logistics assets) compared with €12.4 billion in 2016 and €11.8 billion in 2015.

“With just a few operations still left to close before 31 December, which will amount to between €0.5 billion and €0.6 billion, tertiary investment has fallen by 22%. This decrease in activity is a sign that we have crossed the equator of the bullish cycle and that we are possibly starting a period of greater stability”, explained Javier García-Mateo, Partner in Financial Advisory at Deloitte.

The 22% decrease is due to a weaker second half of the year in terms of the rate of investment (…). During the third quarter, investment fell from €6.6 billion in 2016 to €1.6 billion this year, says Deloitte in its report. During the fourth quarter, the difference was a decrease of 42% (€2.8 billion compared with €1.8 billion). The decrease is more pronounced in the property segments that tend to lead absolute investment, namely, offices and retail assets. In the case of the former, investors have spent €2.3 billion in 2017, less than half the amount recorded in 2016 (€4.9 billion) and 2015 (€5.3 billion) (…). “Offices tends to be the segment that traditionally leads investment, but this year it has decreased by 55%. This is not due to a lack of supply, but rather the gap between the expectations of sellers and the offers from buyers. Moreover, some operations have been abandoned, such as the sale of Hispania’s portfolio”, said García-Mateo.

In this way, unlike in previous years, where large operations were closed during the final quarter of the year, such as Torre Foster – sold for €490 million at the end of 2016-, Torre Espacio – sold in November 2015 for €550 million – and Torre Picasso – sold for €400 million in December 2011 – this year, the most significant operation has been the sale of 50% of Torre Caleido on Paseo de la Castellana, for around €150 million, closed during the first quarter of the year.

In the case of retail assets, investment in shopping centres fell by 29% to €2.7 billion, despite record operations such as the one involving Xanadú, whilst the purchase of shops fell by 36% to €421 million.

“After 4 years of increases in valuations and the consequent decrease in yields, investment in offices and retail property is significantly less attractive than in the hotel and logistics segments, where there are up to 3 points of differential per year”, say the sources at Deloitte. The large hotel operations this year have included the purchase of Edificio España by the Riu Group and the sale of HI Partners, along with its 14 establishments, by Banco Sabadell to Blackstone for €630.73 million.

Cataluña

The 22% decrease comes at a time that is being characterised by the independentist challenge in Cataluña, although the uncertainty being generated in that region does not seem to have had an impact on real estate investment, at least not yet, according to García-Mateo. “In Cataluña, the absorption of office space has fallen and sales in shopping centres have also decreased, by around 10% with respect to Q4 2016, but investment has not been hit, as evidenced by Meridia Capital’s recent purchase of the Barnasud shopping centre and Invesco’s acquisition of the Mango facilities in Palau de Plegamans (Barcelona)”, he added.

In this way, the experts justify that the decrease in investment is due to a change in the cycle, following four years of rapid growth (…).

Nevertheless, the €9.7 billion spent during 2017 represents the fourth-highest figure in the historical series (dating back 13 years).

It was only in the last two years, as well as in the record year for the sector (2007), when investment amounted to €12.6 billion, that investment in non-residential assets exceeded the €10 billion threshold, according to Deloitte.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Madrid Attracts Many Of The Companies Relocating Their HQs From Cataluña

10 October 2017 – Expansión

Over the last 10 days, several companies with their headquarters in Cataluña, such as Oryzon, Dogi, Eurona, Proclinic and Sabadell have announced that they are moving their HQs outside the region. Oryzon has established its registered address on Carrera de San Jerónimo in Madrid (…) and the telecommunications operator Eurona has also moved to the Spanish capital (…). Meanwhile, Proclinic has announced that it is moving its headquarters to Zaragoza; Sabadell is moving to Alicante; CaixaBank to Valencia; Gas Natural and Abertis to Madrid, in both cases; and Catalana Occidente is still considering if/where to move.

According to sources consulted, no effective consultations are being carried out at the moment, but Madrid is becoming one of the major alternatives. Prime rents are higher in the capital than in Barcelona, ranging between €25/m2/month and €35/m2/month along Paseo de la Castellana, and peaking at historical maximums of €37/m2/month in Torre Serrano. Meanwhile, in Barcelona, the average rent in the city centre amounts to €19/m2/month, reaching maximums of €24/m2/month on Avenida Diagonal. In any case, the performance of prime rents in both cities has been very good so far this year, with growth of 9% in the last quarter with respect to the same period last year, according to CBRE (…).

In terms of absorption, 128,108 m2 of space was leased during the second quarter of the year in Barcelona and 156,334 m2 of space was leased in Madrid. Availability is greater in Madrid, at around 12%, compared to 8% in the Catalan capital.

According to José Miguel Setién, of JLL, whilst it is really hard to find spaces of 3,000 m2 on Avenida Diagonal, there is more high-quality space available in the business district in Madrid, due to the renovations that have been carried out since 2013. As such, the market for medium-sized operations has performed exceptionally well there, even during the summer.

Overall, it is estimated that 1.5 million m2 of surface area is available in Madrid; of which 220,000 m2 is free in the centre of the capital, according to Ángel Estebaranz, National Director of Offices at Aguirre Newman. There is space available in several well-known offices such as Torre Foster, Torre Europa, Castellana 81, Castellana 77, Castellana 200 and Plaza de la Independencia, mostly grade A renovation products. Even Torre Picasso has almost two floors available, which would allow the right tenant to locate its corporate headquarters in one of the most iconic buildings in the city (…).

When it comes to choosing a new location, the nature of the company’s business plays a critical role. In this way, financial and legal companies tend to locate their offices in the business centre of cities, whilst pharmaceutical companies, for example, position themselves between the M30 and M40 ring roads, since they do not require such iconic buildings, but do need a lot of space, available in areas such as Campo de las Naciones, Alcobendas, Moraleja, Sanchinarro… Tech firms, like Google and Amazon, tend to establish themselves within the city centre but not in prime areas, such as Atocha, for example. Meanwhile, publicity firms are moving to Chamberí, with WPP and Havas’ new headquarters to be located in that neighbourhood, and Telcos are concentrating in urban areas of the city with rents of between €22/m2/month and €25/m2/month, says José Mittelbrum, National Director of Offices at CBRE (…).

Original story: Expansión (by Lucía Junco)

Translation: Carmel Drake

Amancio Ortega Earned €72M From His Property Portfolio In 2016

24 July 2017 – Expansión

A portfolio worth €6,719 million containing assets spread over markets as diverse as Spain, Canada, the United Kingdom and Korea. That summarises the real estate activity of Amancio Ortega, founder and majority shareholder of the textile giant Inditex.

The fourth richest man in the world (exceeded in the ranking only by Bill Gates, Warren Buffet and Jeff Bezos), with a fortune worth $80,400 million according to Forbes, has allocated most of the revenues obtained from the annual dividend he has received from Inditex for the last two decades, to creating one of the largest personal real estate portfolios in the world. Through his firm Pontegadea Inmobiliaria, Ortega has acquired buildings, primarily offices and retail premises, located in a multitude of markets.

Acquisitions

In 2016, Ortega starred in the largest purchase of an office building in Spain, by paying €490 million for Torre Foster, one of the skyscrapers that forms part of the Cuatro Torres de la Castellana complex in Madrid. Months before, Pontegadea Inmobiliaria made its debut in South Korea when it acquired the M Plaza commercial complex. For both properties, Ortega’s company spent €662 million in total, according to the most recent results presented by the company.

Also in 2016, Inditex’s largest shareholder spent around €129 million on a building in San Francisco (USA).

These investments allowed Pontegadea Inmobiliaria to increase its total asset volume by €661 million in 12 months. At the end of 2016, the company owned net assets worth €6,475 million, up by €373 million compared to the previous year.

Despite this increase in assets, Pontegadea’s revenues and profits decreased last year. Revenues amounted to €120 million, compared to €129 million in 2015. Nevertheless, the gross operating profit rose slightly in 2016 to €102 million, compared with €101 million a year earlier. Last year, Pontegadea’s profit amounted to €72 million, down by 30%. The company attributes this decrease (the second consecutive fall, given that it earned €182 million in 2014) to “currency fluctuations”, which “generated negative exchange rate differences of €19 million, concentrated primarily in the variation of the value of the pound sterling”.

The British real estate market is one of Pontegadea’s favourite destinations. In London alone, Ortega’s property arm has invested at least €3,000 million. Some of its properties include Rio Tinto’s headquarters, acquired for €335 million in 2015 and Devonshire House, for which it paid €480 million in 2013. In March, Pontegadea covered a €114 million capital increase of its British subsidiary (Pontegadea UK).

In Spain, in addition to Torre Foster, also known as Torre Cepsa thanks to its tenant, Pontegadea also owns Torre Picasso, Gran Vía 32 and several buildings along La Castellana.

Pontegadea Inversiones

Ortega’s property arm forms part of the business conglomerate that the founder of Inditex has controlled for several years through Pontegadea Inversiones. That company, which groups together its majority stake in the textile group (59.29% in total), recorded revenues of €23,649 million in 2016, compared with €21,234 million a year earlier. Last year, the company’s profit amounted to €3,277 million, up by 8.3% compared to the previous year.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Bankia Buys 10,000m2 Office Building In Madrid From Activum

3 March 2017 – El Confidencial

Bankia outgrew its Torre Kio offices in Madrid several years ago. In fact, it was more than a decade ago when the entity (still operating under the guise of Caja Madrid) began to consider moving offices. To that end, it acquired the imposing skyscraper from Repsol that Norman Foster had designed on the site of Real Madrid’s former Ciudad Deportiva.

But that operation ended up being disastrous for the bank, which paid €800 million to acquire the property and ended up selling it for half that sum. Nevertheless, Bankia’s expanding space requirements are a reality once again, and under the mandate of José Ignacio Goirigolzarri, the entity is embarking on a cautious but gradual policy of acquiring assets for corporate use.

In this vein, the entity acquired an office building from Activum in December. The property is located in the Julián Camarillo district of Madrid, a secondary area that is currently enjoying a revival, thanks to the boost being given by property companies such as Torre Rioja.

The building in question is located at number 32 on Calle Santa Leonor, it has a surface area of 10,134 m2, spread over two basement floors, with more than a hundred parking spaces, one ground floor, four upper floors and one top floor. Bankia has acquired this building to house all of the workers from its Multi-channel Department, which until last year occupied a rental property, specifically, the Torre Foster, which Amancio Ortega has just purchased. The entity has confirmed the acquisition of this building, but declined to reveal the amount paid, which according to market sources must have amounted to between €2,000/m2 and €2,500/m2, taking the final figure for the transaction to around €20 million.

This is the second major purchase of an office building that Bankia has signed in recent months, after it closed the acquisition of the property that houses its IT services in Las Rozas, for €130 million, from the Swedish group SEKin December 2015. Five years earlier, SEK had bought the building from Caja Madrid for €108 million, with the commitment from the entity to remain as the tenant (‘sale & leaseback’).

With these two operations, the entity has managed to balance out some of its past mistakes, given that, on the one hand, it has exchanged an expensive rent in one of the most iconic buildings in Madrid for a purchase that it has managed to make at a reasonable price and, on the other hand, it is readjusting the numbers for a sale that it completed during one of the toughest periods of the financial crisis.

Through this sale, Activum has completed its second divestment in Spain, following the sale of an office building on Calle Manuel de Falla to the Socimi Axiare. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

JLL: RE Inv’t Amounted To €8,757M In 2016

13 January 2017 – Expansión

Between January and December, investors spent €8,757 million buying tertiary assets, according to data from the real estate consultancy JLL. This figure is the second highest in the last decade, and is €650 million below the volume of sales and purchases recorded in 2015. That was the year when the invasion of international funds into Spain and the consolidation of the Socimis took the real estate market to figures never seen before, with a volume of investment upwards of €9,400 million.

But, unlike the previous year, 2016 saw the rise of commercial assets (primarily, shopping centres and high street premises) to lead the ranking in terms of real estate investment by segment, accounting for almost €3,000 million (€2,977 million, according to JLL) compared to €2,806 million spent on offices.

Two operations, the purchase of Torre Foster by Amancio Ortega, for €490 million and Merlin’s acquisition of Parque Adequa for €380 million, boosted the investment figure in the office segment, which, although hasn’t completely lost its appeal for buyers, has been relegated to second place due to a shortage of available prime space. (…).

Funds are selling off assets

The opposite is happening in the case of large commercial establishments. International funds’ interest in selling the properties that they bought during the crisis led to a boom in major operations last year, including the sale of the Diagonal Mar shopping centre by Northwood, which was acquired by one of Deutsche Bank’s real estate funds for €493 million; and the sale of Gran Vía de Vigo, for which the Socimi Lar España paid the fund Oaktree €145 million. (…).

In the case of hotels, despite significant one-off sales, such as the operation involving Hotel Villamagna, which was acquired by the Turkish group Dogus for €180 million, overall the investment volume fell from €2,739 million in 2015 to €2,155 million last year. Even so, the figure for 2016 exceeds the investment volume recorded in 2006, which previously held the record, when hotel sales amounted to €1,600 million (out of a total non-residential investment volume of €8,482 million).

Although commercial properties led the ranking as the preferred asset for investors, logistics assets also performed very well. Between January and December, €819 million was invested in logistics warehouses, platforms and centres, according to JLL. This figure practically doubles the purchases completed in 2015, when investors disbursed €434 million on these types of properties, according to the consultancy.

The key behind this success is due to the fact that logistics assets still offer high returns, compared with other properties, such as offices and shopping centres, which have lost some of their investment appeal, due to the high degree of interest in these assets in Spain.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Alicia Koplowitz Considers Buying Barclays’ HQ In Spain

2 November 2016 – Expansión

Omega Capital, the investment vehicle owned by Alicia Koplowitz, is analysing strengthening its presence in the real estate market, taking advantage of the boom in the sector at the moment. It is considering submitting a bid for Barclays’ headquarters in Spain, located right in the heart of Madrid.

The office building in question is located at number 1, Plaza de Colón, opposite the Torres de Colón – the 116m-tall twin skyscrapers owned by Mutua Madrileña -. The property is worth between €40 million and €60 million, according to market sources.

The building has a surface area of around 3,900 m2 spread over three floors – ground, first and second -, and a terrace with spectacular views over the central Madrileñian square.

The property was taken over by Barclays when the British financial institution acquired Banco Valladolid in the 1980s.

More than two decades later, the banking entity has now decided to put the iconic building up for sale and has engaged the real estate consultancy CBRE to advise it during the process. Several investors have already expressed an interest in the property, in addition to the company owned by Alicia Koplowitz. Sources at the consultancy firm declined to comment about the sales process or the possible candidates for acquiring the property.

The British bank, which is considering remaining as a tenant of the building for a few months following the sale, until it finds a new location for its headquarters in Spain, is using this operation to take advantage of the investor appetite for well-located office buildings in Spain’s capital and whereby generate cash.

The lack of buildings in the prime area of Madrid has caused the appeal of them to increase given the supply shortage and the problems involved in carrying out new constructions in the city centre. One of the most high profile purchases in recent months involved Pontegadea’s purchase of Torre Foster.

The British entity indicated recently that it has detected considerable appetite for the property on Plaza Colón and it had received informal queries regarding its sale.

Barclays also said that it is considering the option of relocating its headquarters to a place that offers a better service “in terms of facilities, technology and comfort” for the entity, in a property that is aligned with the needs of its corporate and investment banking business.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Ipic Finalises Sale Of Torre Cepsa For €500M+

3 May 2016 – Expansión

Ipic, the Abu Dhabi state fund behind the oil company Cepsa, is trying the sell the so-called Torre Foster for a price that could range between €500 million and €600 million.

Ipic is negotiating with a small group of foreign funds, including, some investors from the Middle East. The operation will mark a milestone in the new boom that the real estate sector in Spain is currently experiencing and will serve to boost other projects currently on the horizon, such as the so-called fifth tower, which the businessman Juan Miguel Villar Mir wants to construct in the Cuatro Torres complex, where the Foster skyscraper is located.

That price is significantly higher than the figure of between €400 million and €450 million that the Torre Foster, now renamed Torre Cepsa, given that it houses the headquarters of the oil company, was valued at when Ipic signed a call option to purchase the building from Bankia back in 2013.

That option has not been exercised yet. It will be exercisable after the summer. Hence, Ipic has accelerated the negotiations to acquire the building and, almost immediately, sell it on to a third party. Technically, the property is still owned by Bankia.

Gain for Abu Dhabi

The additional value that Ipic obtains for the building, if it manages to sell it to a third party for more than the price established in the call option, will represent a gain for the fund, in other words, for the Government of the Arab Emirate of Abu Dhabi.

Ipic (International Petroleum Investment Company) operates as a sovereign fund for channelling investments in energy and other similar sectors by the Government of Abu Dhabi. The group owns assets amounting to USD 68,000 million and holds investments in around twenty companies, of which Cepsa is the largest.

Bankia’s agreement with Ipic seemed like a great deal for the bank at the time. Back then, in the midst of the hangover from the real estate crisis, the price established for the option to sell the building was very attractive. In addition, Ipic rented out the whole building to house Cepsa’s headquarters, although the oil company did not end up occupying all of the floors.

The tower has a surface area of more than 100,000 m2, of which around 72,312 m2 relates to above ground offices and a further 37,500 m2 corresponds to five underground floors.

The agreement between Bankia and Ipic included a lease contract for an extendable eight-year term. This long-term contract is another of the elements that will increase the value of the building in the event that Ipic ends up selling it to a third party. At the moment, Bankia charges Ipic a monthly rent of €1.6 million, through the company Torre Norte S.A.. Ipic pays for the rent through the company Muscari Development, B.V., which is domiciled in The Netherlands. That price includes discounts that end in June 2016. The lease contract includes the call option to buy the entire building. (…). The Ipic group began to evaluate options for selling the building at the end of last summer, following the collapse of the global oil prices. (…).

Original story: Expansión (by M.Á.Patiño and R.Arroyo)

Translation: Carmel Drake

Bankia Will Earn Rental Income Of €324M From Torre Foster

6 April 2015 – Expansión

Bankia will earn €324 million from the rental of Torre Foster, the building that the bank owns in the Cuatro Torres complex on the Paseo de la Castellana in Madrid. In October 2013, Bankia signed an agreement to lease the property to Cepsa, a company owned by Abu Dabi. BFA-Bankia inherited the building from Caja Madrid, which purchased it from Repsol for €815 million in 2007. The lease contract was established for a period of eight years and may be renewed for another seven years. According to the annual accounts of Torre Norte Castellana, a fully owned subsidiary of Bankia, whose sole activity is the lease of the building, the annual rental cost is €21.63 million.

The entity must dispose of this asset as part of its restructuring plan. The rental contract, which was signed as part of the bank’s strategic plan for the period 2012-2015, included a purchase option, which is exercisable in 2016. It will be organised through the acquisition of shares in Torre Norte, at a price that will be determined on the basis of objective criteria that have already been agreed.

At the time, Bankia thought that the best way of generating value from Torre Foster was to rent it out; the building’s value was updated following the balance sheet clean up that the BFA-Bankia group performed in 2012, after its nationalisation. Torre Foster contains office space measuring more than 109,000 square metres, including a gross leasable area of 56,250 square metres, as well as 37,500 square metres in its five-storey garage, reports Europa Press.

Original story: Expansión

Translation: Carmel Drake