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

Rents In Azca’s Towers Exceed Those In The Cuatro Torres

12 September 2017 – El Economista

The Cuatro Torres skyscrapers, to the north of Madrid, are no longer casting a shadow over Azca, which is establishing itself as the iconic business district in the city. With views overlooking the Paseo de la Castellana and just a stone’s throw from the Santiago Bernabéu Stadium and the Nuevos Ministerios transport hub, this business centre has managed to renew itself, to avoid being left behind compared with other areas of Madrid. So much so, that the rents for its recently renovated skyscrapers are 16.6% higher per square metre than the most expensive space in the Cuatro Torres, to the north of the city.

Castellana 81, the historical headquarters of BBVA, leads the ranking in terms of rental prices in Madrid, given that its empty space is being marketed for between €27 and €35 per square metre per month. This tower, designed by the prestigious architect Sáenz de Oiza, has been subjected to a comprehensive renovation by its owner, the Socimi GMP, which spent €30 million renovating one of its most iconic properties in Azca and on Madrid’s skyline.

The asset, which became a multi-tenant property when it first came onto the market, has already managed to conquer new companies following the departure of the banking entity, which moved to its own financial city, in Las Tablas, to the north of Madrid. Thus, in the last few months, rental contracts have been signed with Teka and Hays.

At the forefront of design

Castellana 77, which is also owned by the Montoro family’s real estate company and the Singapore sovereign fund, GIC, has been the subject of another of the major renovation projects that has been carried out in Azca and which has positioned the business district at the forefront of design. Its façade is covered with slats that protect it from direct sunlight and which are lit up at night in a diverse range of colours.

The tenant that decides to lease the office space in this building, which spans 16,200 m2 over 18 floors, will be able to choose the colour of the tower, which has more than 200 parking spaces as well as charging points for electric cars. With these features, this property has the second highest rents in Azca, which range between €28 and €33 per square metre per month.

And it is followed closely by Torre Europa, which housed the headquarters of the professional services firm KPMG for many years. Following the move of that consultancy firm to the Cuatro Torres, the tower has been renovated to turn it into the first intelligent and connected office building in Spain. Infinorsa, the majority owner of this skyscraper, which overlooks the Santiago Bernabéu, has invested €20 million on a facelift of the façade, which had not been changed for 30 years, and above all, on the renovation of the interior, which has given a radical about-turn to the essence of this 121m-tall tower (…).

Rents in this tower now range between €27 and €32 per square metre per month. Its renovation has already captivated one of the large international law firms, Freshfields (…). The US firm AOL has also decided to move its Spanish corporate headquarters to Torre Europa, as well as a pharmaceutical company (…).

Torre Picasso, the tallest skyscraper in Azca, at 156m, has not undergone such a comprehensive renovation as its neighbours, but following the departure of the consultancy firm EY to Torre Titania, 15,000 m2 of space there was left vacant. Some of that space in the tower owned by Pontegadea – the investment arm of Amancio Ortega – will be leased to Deloitte, which will thereby become its largest tenant. After several improvements to the property, the highest floors are now being marketed for €31/m2/month (…).

Rents in the Cuatro Torres barely reach €30/m2/month

Nevertheless, in the new financial district located in the north of Madrid and known as Las Cuatro Torres, only one of the towers manages to charge a rent of €30/m2/month, even though the buildings are much younger, given that they were inaugurated between the years 2008 and 2009.

Office space in Torre Espacio ranges between €29 and €30 per square metre per month. The Philippine group Emperador, which owns this skyscraper (…) renewed the image of the tower at the end of last year and launched a new marketing plan with the aim of finding tenants for the 8,800 m2 that were vacant in the building at that time.

Next in the ranking is Torre Cepsa, for which Amancio Ortega (…) paid €490 million last year. It is occupied almost in its entirety by the oil and gas company whose name it bears; the cost of the 15,000 m2 of space that is available ranges between €23 and €28 per square metre per month.

Meanwhile, Torre de Cristal, the tallest skyscraper in Spain, at 210m, is the most affordable of its neighbours, since its available space is being marketed for between €25 and €27 per square metre per month. Last year, KPMG left the Azca area and moved to this property, where it leases around 23,000 m2 (…).

Next door is Torre PwC, leased to the consultancy firm whose name it bears and the five-star hotel Eurostars. Its owner is the Socimi Merlin Properties (…) and PwC reportedly pays €19/m2/month.

The Cuatro Torres complex is now getting ready to receive a fifth tower, Torre Caleido. That property, which is currently being constructed (…), will be leased to IE Business School and Grupo Quirón-Salud (…), who will reportedly pay between €15 and €18 per square metre per month (…).

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Mastercard & Commerzbank Move Into Torre de Cristal

13 September 2016 – El Confidencial

The Cuatro Torres district is the new “City” in Madrid and is one of the areas where the leading real estate players have been operating with the most intensity over the last two years. The company chaired by Ignacio Garralda, Mutua Madrileña, fired the starting gun in February 2015, when it signed an agreement with KPMG to lease 18 floors in the Torre de Cristal, a third of the entire building, in an operation that allowed it to boost its occupancy rate from 42% to 70%.

Just four months later, Grupo Villar Mir put Torre Espacio up for sale, which the Philippine Group Emperador ended up buying for €558 million. By then, the skyscraper where PwC has its headquarters – the black tower that is also home to the Eurostars Hotel – had already changed hands, thanks to Merlin’s acquisition of Testa, and the sheikh Khadem al Qubaisi had already started putting the feelers out to sell Torre Cepsa, the skyscraper for which Amancio Ortega has offered to pay €490 million, according to El Confidencial.

Amidst this game of Monopoly being played out at the north of Paseo de la Castellana, two overseas financial entities, Mastercard and Commerzbank, have decided to transfer their offices to Torre de Cristal, the highest building in Spain, which measures 250m tall and contains 52 floors.

The credit card company has already moved into the skyscraper, whilst the German bank is currently undertaking refurbishment work ahead of its move before the end of the year.

But these two entities are not the only ones who have decided to move into the building owned by Mutua Madrileña. In recent months, following the arrival of KPMG with its 1,900 professionals, Torre de Cristial has seen a significant increase in the number of itstenants, after sealing several agreements with companies such as Red Hat, Cerner and Gesternova, which has allowed it to increase its occupancy rate to more than 82% and lease out a further 5,000 sqm.

Hardly any free floors left

The direct impact of the appetite for these skyscrapers from tenants and owners alike means that there are hardly any free floors left in the Cuatro Torres district (…).

Tower Sacyr (now owned by Merlin) is the only fully occupied tower, but it had to drastically reduce its rental prices to reach an agreement with PwC in 2011, during the worst years of the crisis, in order to acheive that.

Bankia also demanded that Cepsa occupy 100% of Torre Foster, but the oil company has now decided to put eight vacant floors up for rent. Those floors have a surface area of 13,000 sqm, a figure that is slightly higher than the 10,200 sqm that is also being marketed in Torre Espacio, the skyscraper where the main tenant is Grupo Villar Mir, which occupies half of the building.

These numbers show that the average occupancy figure for the Cuatro Torres district now exceeds 80%, a ratio that it has reached at a time when Azca, the traditional financial district in Madrid, is seeing a significant number of its properties undergo profound transformations.

The Cuatro Torres area will be further consolidated as a business centre with the upcoming construction of the so-called Fifth Tower, a skyscraper being developed by Grupo Villar Mir, in partnership with the fund Corestate, which Instituto de Empresa will occupy along with the health group Quirón, according to experts.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Ortega Finalises Purchase Of Torre Cepsa For €500M

9 September 2016 – Expansión

The countdown has begun to one of the major operations of the year in the real estate sector. Ipic (International Petroleum Investment Company) – the Abu Dhabi state fund that owns the oil company Cepsa, the current tenant of the property – has notified Bankia of its intention to exercise its purchase option over Torre Cepsa, according to sources close to the operation.

The exercise of this call option unblocks the process that Ipic initiated several months ago, as part of its plan to execute the option to acquire the building and then sell it on to a third party almost immediately. On the basis of the offers received, the Arab Emirate fund has favoured the bid submitted by Pontegadea – the investment arm of Amancio Ortega.

Ponteagadea, which has become one of the largest real estate investors in Spain and overseas, is the clear favourite to purchase the property, which is located in the Cuatro Torres complex on Paseo de la Castellana (Madrid). Amancio Ortega, who is backed by the financial strength of his stake in Inditex, has offered to pay around €490 million for the property.

In October 2013, Bankia signed an agreement with Ipic to lease the tower that it owns, through its stake in Torre Norte Castellana. The lease contract was signed for a period of eight years, which may be extended by another seven years, on an annual basis.

Similarly, this agreement included a future call option, whose execution deadline is due to expire at the end of this month. Specifically, the expiry of this right drove Ipic to launch a process to look for investors interested in acquiring the asset. Ipic operates as a sovereign fund to channel energy investments from the Abu Dhabi Government.

According to Bankia’s audit report for 2015, the book value of the property is €384 million. That figure falls below the range of €400 million to €450 million at which the skyscraper was valued in 2013, when Bankia and Ipic signed their agreement.

Pontegadea is the second largest private real estate investor in Spain, with assets worth more than €6,000 million….surpassed only by Merlin (…). Amancio Ortega’s bid for Torre Cepsa is the favourite, but it is not the only one.

Other interested parties

Since the process to sell Torre Cepsa began, the asset has sparked interest amongst funds and investors, both at home and overseas.

The domestic players that have expressed interest in the asset include the Spanish Socimi Axiare. This real estate investment vehicle, which specialises in the office segment, held a portfolio of assets worth €1,048 million at the end of June.

One of Axiare’s main rivals is Merlin, the current owner of Torre PwC (previously known as Torre Sacyr Vallehermoso), which houses the headquarters of the professional services firm chaired by Gonzalo Sánchez, as well as the five-star Eurostars Madrid Tower hotel.

Torre Cepsa has 34 storeys and a surface area covering more than 109,000 sqm, of which 72,300 sqm corresponds to offices. The remaining space comprises five floors of parking.

Original story: Expansión (by R. Arroyo/M.A. Patiño)

Translation: Carmel Drake

Merlin To Invest €100M Renovating Testa’s Buildings

13 October 2015 – Cinco Días

The Socimi Merlin Properties is embarking on a plan to renovate and improve the certifications of the buildings it has inherited from Testa, the former subsidiary of Sacyr. The plans also include the refurbishment of the construction company’s own headquarters. The investment will amount to €100 million over the next five years.

Over the medium term, the Socimi plans to renovate some of the buildings it inherited from Testa, the company in which it now holds a 77% stake. According to sources familiar with the plan, the company’s idea is to spruce up some of the properties that have become run down due to a lack of investment, improve the aesthetics of some of them and introduce environmental and energy certifications, with an investment that will amount to around €100 million.

In June, the Socimi announced its purchase of Testa for €1,793 million. Testa is the former real estate subsidiary of Sacyr and is the owner of properties for rent.

Merlin, led by Ismael Clemente, has already get involved with the day to day running of Testa. In recent weeks, Management has been assessing the status of its existing (extensive) portfolio containing 45 office buildings, and has launched a plan to renovate the properties, with the medium-term objective of generating higher rents as a result of the improvements.

On the one hand, it will spend around €75 million on the refurbishments over a five year period. The most iconic building is the one currently leased by Sacyr, at number 83 on Paseo de la Castellana, next to the Torre BBVA. The Socimi plans to give the property a new lease of life with a new façade that will modernise the aesthetics of the building. The construction company’s lease expires in 2019, and therefore if they want to undertake the renovation work before that date, they will have to notify the tenant.

In addition, Merlin plans to refurbish the interior of various buildings in Madrid, such as the ‘Complejo Princesa’ in the well-known Plaza de los Cubos, as well as other buildings such as the Costa Brava, in the Mirasierra neighbourhood, oand the property next to Torrespaña on Calle Juan Esplandiú. Meanwhile, it will also begin construction work at shopping centres in Porto Pi in Palma de Mallorca and Larios in Málaga.

The other part of the plan involves spending more than €20 million on the refurbishment work that is required in all of the buildings in order to obtain the environmental and energy certifications that will, for example, result in future savings on electricity bills.

Other very modern buildings

Nevertheless, Testa also owns several other iconic and modern buildings that will not need any work, at least in theory, such as Torre PwC (one of the four towers at the northern end of the Paseo de la Castellana) and the headquarters of Endesa, Uría y Menéndez, L´Oreal and Indra.

In addition, Merlin is immersed in a plan to restructure its portfolio following the acquisition of Testa. It plans to hold onto the office buildings and shopping centres that it has inherited and get rid of the residential properties and hotels. In fact, it has already put a batch of 1,500 homes up for sale. Together, the two companies have assets worth more than €5,000 million. The acquisition of 100% of Testa and the definitive merger of the two companies is scheduled to be completed on 30 June 2016.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Merlin’s Acquisition Of Testa Moves Faster Than Expected

12 August 2015 – Cinco Días

The Socimi, Merlin Properties, now owns 77% of the real estate company Testa and has paid consideration of around €1,465 million to date.

The construction company, Sacyr, was not expected to cede this stake in its subsidiary until March 2016.

The process to sell Testa, the former subsidiary of Sacyr, is moving faster than expected. The deadlines have been accelerated as the construction company chaired by Manuel Manrique has overcome various obstacles in order to generate some cash from the transaction. The restructuring of the debt and the release of the pledge over the shares in the real estate company linked to its stake in Repsol, have allowed Merlin Properties to take ownership of an additional 26.9% stake in the real estate company today for around €375 million, according to banking sources. By the end of the day, the Socimi will control 77% of the company.

On 9 June, Merlin announced its purchase of Testa for €1,793 million. The operation was designed to be completed in several stages. During stage one, the Socimi, which boasts Ismael Clemente as its CEO, acquired 25% of the real estate company. The remaining shares were pending the release of a pledge over the shares linked to Sacyr’s debt. This was because when the construction company restructured its €2,272 million liability, it pledged its 9% stake in Repsol (amongst other assets) as a guarantee. On 23 July, Merlin paid €861 million for a 25.1% stake in Testa. Sacyr was forced to allocate €600 million of the consideration received at the time, to paying off its debt with creditor banks. In turn, the Socimi took ownership of the majority of the shares as a result of its disbursement.

As such, Sacyr was able to return to renegotiate its debt and reduce the percentage of Testa’s shares secured by its shareholding in Repsol. As such, the construction company has now been able to accelerate the sales process of the next package (of shares) to be acquired by Merlin – this change in control was not originally scheduled to take place until March 2016. The same sources state that the consideration (€375 million) that the Socimi will disburse today will go straight into Sacyr’s coffers, with no obligation to reduce its liabilities, and may be allocated to its operational needs. The remaining shares in Testa continue to be pledged by the shareholding in Repsol.

In total, Merlin has now paid around €1,465 million for the three share packages in a period of just two months.

In terms of the remaining 23% stake, the sales period is due to close on 30 June 2016. Merlin’s ultimate objective is to turn Testa into a Socimi and subsequently merge with it. Based on the information provided, the transaction will give rise to the largest real estate company in Spain, with assets worth around €5,500 million, including the Torre PwC, one of the four skyscrapers in the Norte Castellana business district in Madrid. According to the purchaser, these buildings, which are primarily leased as offices, will generate gross annual revenues of approximately €290 million.

In addition, Clemente said last month that Merlin will sell off Testa’s residential and hotel portfolio, which represents around 15% of its total portfolio.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Merlin, Blackstone & Colonial In Final Round For Testa

2 June 2015 – El Confidencial

The countdown has begun. The second week in June is the date marked in the calendar for the submission of definitive offers for Testa, the real estate company that Sacyr has put up for sale, following the difficulties it faced undertaking a capital increase on the stock exchange. Although the official message from the construction company is that the option of carrying out an IPO is still on the table, the reality is stubborn and paints a picture in which the figures that the group chaired by Manuel Manrique aspires to generate will be impossible to achieve in the market.

By contrast, the direct sale to real estate groups and investors has whetted the appetite of several industry giants, which have decided to go ahead with their bids. Specifically, Merlin Properties, Blackstone and Colonial make up the final short list of investors that must submit their definitive bids next week, according to sources close to the process, being coordinated by the investment bank Lazard.

Along the way several investors have dropped out of the running including Hispania, which barring a last minute surprise, has failed to meet the requirements necessary to move forward, and Eurosic, the French group, which has approached Colonial and Blackstone to try to design some kind of joint bid, but which seems to have fewer chances than its rivals, although it has not yet thrown in the towel.

These investors are, in turn, working with different route maps, given that whilst Blackstone is planning to submit a bid for 100% of the company, which means it will pay around €2,000 million, its rivals are working with the idea of initially purchasing a 30% stake, worth €500 million, and a testament to conditions aimed at ensuring an IPO in the future, if the circumstances allow, as well as acquiring all of the company through a merger by share exchange.

Nevertheless, these numbers need to fine-tuned, a process that the three interested parties are now undertaking…Even though Sacyr’s subsidiary is one of the largest owners of assets in Spain; its portfolio includes iconic buildings such as the Torre PwC, as well as other significant properties in Spain’s main cities; it is also still very weighed down by the difficulties it has experienced in recent years.

These include a loan linked to the construction company amounting to more than €900 million, which Sacyr was planning to cancel when it listed the subsidiary on the stock exchange, as well as several liabilities guaranteed by Testa amounting to €500 million. According to market sources, these figures explain why Sacyr decided to open the direct sale process, since during the initial rounds it thought that it would obtain just over €300 million, i.e. an amount well below the current asking price of €500 million.

Testa’s assets amount to almost €3,200 million, making it one of the largest asset companies in Spain. The bulk of its portfolio is centred on offices for rent, but it also includes hotels, homes, commercial, industrial, residential and car park assets.


In terms of the sale of the RE company, Sacyr’s objective is to reorganise its financial position, since for almost a decade it has been conditioned by its equity position in Repsol. In fact, if it ends up selling 100% of its subsidiary for cash, the aim of the construction company is to use the money to repay a €2,264 million loan linked to 9% that it still holds with the oil company, which would almost cancel it completely.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake