Tag: total investment

Santander Grants €128M Loan to La Finca for Madrid’s Largest Ever Luxury Development

12 February 2018 – Expansión

A loan from Santander / The group owned by the Cereceda family has obtained financing for the first phase of its project, which will include the construction of 144 homes, a golf course, sports facilities and a leisure centre.

The group owned by the García Cereceda family – owners of the La Finca business and residential complex – has obtained a cash injection of almost €130 million to develop its LGC3 residential project, which will involve the construction of around 500 luxury homes in the municipality of Pozuelo de Alarcón (Madrid) for a total investment of €340 million.

Specifically, the company has signed a loan with Santander amounting to €127.5 million for the development of the first phase of the project, which will include the construction of 144 homes in three-storey blocks, a golf course, a lake, sports facilities and a shopping and leisure centre, according to financial sources speaking to Expansión.

The first phase of the project, which has been called LGC3 – an acronym that corresponds to the initials of Luis García Cereceda, the patriarch and founder of Procisa (now La Finca) who passed away in 2010 – is already underway and will involve a total investment of between €154 million and €159 million.

Prices

The homes in this first phase will have a surface area of between 200 m2 and 400 m2, approximately, and will have terraces that may extend to 600 m2, as well as private swimming pools for some of the homes. The sales prices of the units will range between €1 million and €2 million.

The LGC project will be carried out on a plot that has a total surface area of 850,000 m2 in Pozuelo de Alarcón, to the north of the capital, next to Parque Empresarial, the exclusive urbanisation were well-known footballers and Spanish businessmen live. Of the total surface area, around 100,000 m2 will be allocated to the plot where the 500 homes will be built. The first phase of the development alone, with 144 units, will occupy around 36,000 m2.

The rest of the surface area – around 750,000 m2 – will be allocated to the Country Club, accessible only to owners of the homes, which will have an 18-hotel golf course, next to a lake with a water surface area of 35,000 m2, an artificial beach, sports facilities and schools, lakes, gardens, a running track and a shopping and leisure centre with a surface area of 10,000 m2.

In addition to the security measures that the urbanisation will have, with a double perimeter fence surrounding the plot and an intrusion detection system and gatehouse, the development will also incorporate the latest requirements in terms of sustainability and energy efficiency (…),.

Property business

La Finca, chaired by Susana García Cereceda, has already started to construct the first phase of homes and has allocated around €25 million from the group’s own cash funds to the urbanisation work. The company carried out a corporate restructuring in 2016 and signed a financing agreement with a syndicated loan led by Société Générale, CaixaBank and Santander amounting to €395 million destined to pay off its existing debt and tackle new projects.

Moreover, last year, the company welcomed the fund Värde into its office property business – La Finca Global Assets – which includes its La Finca, Cardenal Marcelo Spínola and Martínez Villergas business parks.

The company has already initiated the process for La Finca Global Assets (in which Värde owns a 40% stake) to debut as a Socimi on the Alternative Investment Market (MAB) during the course of 2018.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Mercadona Acquires Logistics Plot In Valencia For €24M

9 December 2016 – Expansión

The supermarket chain Mercadona is preparing to build a new logistics centre in Parc Sagunt, the largest industrial estate in the Community of Valencia, which is almost empty at the moment.

The firm has acquired a plot measuring 358,270 m2 for €24 million, on which it will construct a logistics block. The centre will not be used to supply the chain’s stores directly, like its existing centres, but will instead centralise the storage and distribution of products to the other logistics centres. It will be the first point of receipt for products that due to their nature require this kind of logistic management, for example, perishable goods, goods from the same supplier and goods imported through ports.

Sources at Mercadona explain that, for the time being, the definitive design for the centre and the total investment have not been defined.

The chain currently operates thirteen logistics centres and three satellite warehouses. In total, it has a surface area of 854,000 m2. In 2007, the company launched a strategy involving intelligent logistics centres, which kicked off with the construction of a centre in Ciempozuelos (Madrid) and was subsequently extended to include centres in Ribarroja (Valencia), Villadangos (León), Guadix (Granada) and Abrera (Barcelona). The final phases still need to be incorporated into this last block. Around €300 million has been invested to date.

In recent years, Mercadona has invested €700 million in its logistics platforms. It will open its next centre in Vitoria, whose first phase will be operational next year, following a €50 million investment.

Relief for Parc Sagunt

This operation was approved on Wednesday by the Board of Directors of Parc Sagunt, the property developer of the land that is jointly owned by the Generalitat Valenciana and the state owned company Sepi (50% each), which have invested €132 million. Mercadona’s arrival at the industrial estate represents a breath of fresh air for the space that had become something of a problem for the Administration. Even though the majority of the site has been completed since 2008, only three companies currently operate there and most of the land is still up for sale.

The plot that Mercadona has acquired is well known, given that in 2007, it was awarded to the Ros Casares group to open its major steel works Brava Steel, but that was never built. Now it has been sold for 41% less.

There are currently 26 other plots of land for sale and experts expect that, thanks to the arrival of Mercadona, demand for those plots will now increase, after years of paralysis.

Original story: Expansión (by J.B. and A.C.A)

Translation: Carmel Drake

Some House Prices Have Risen By 20% Since Q1 2015

10 October 2016 – Expansión

Money is seeking refuge and returns in the real estate sector once again. Real estate assets, which experienced such significant gains at the beginning of the century and which, shortly thereafter, generated so many problems, represent one of the main options for investors in Spain once again. The significant instability that we are seeing in the stock markets; the absence of attractive investment products from the banks; and the many doubts hanging over the global economic recovery, mean that many investors are now backing the security being offered by the, until recently, maligned Spanish real estate sector.

“In the current economic climate, characterised by market volatility and negative interest rates, the real estate sector, and in particular, the luxury residential segment, is becoming the safest choice for investors”, explained sources at the real estate consultancy firm Knight Frank.

These data are corroborated by the evolution of prices in some of the main areas of Madrid and Barcelona. According to data published by the appraisal company Tinsa, since Q1 2015, which is when it is considered that prices in the sector hit rock bottom, prices in the centre of Madrid have soared by more than 10%. Specifically, in the neighbourhood of Salamanca, the increase has been almost as high and the price per sqm now amounts to €3,500/sqm. The increase in the Cataluñan capital is even more pronounced and in the Ensanche de Barcelona area, prices have risen by 20%, from €2,717/sqm at the beginning of 2015 to more than €3,200 at the end of Q3 2016. Moreover, prices rose by more than 15% in the Gracia neighbourhood and by 13% in Sarriá.

This situation is the result of the economic recovery in the country, but also the apepal that the real estate sector has for overseas investors. According to Knight Frank, Latin America and European investors are being very active in their purchases, given that prices fall well below those seen in cities such as Paris, London and Milan.

This good image of the Spanish property sector overseas is going to be maintained over the next few years. That is according to Deutsche Asset Management, which reaffirmed its advice to “buy” in the real estate sector in Spain in a recent report.

“We expect significant returns to be generated (…), well above those being offered in other European markets”, it said.

The only problem that both the manager of Deutsche Bank and Knight Frank are concerned by is political instability. In fact, the real estate consultancy said that “we cannot avoid the situation of political uncertainty that Spain has been living for the last 10 months (…). Activity has been good in the sector but with a stable Government, the growth rate could have been exponential”.

Nevertheless, this obstacle is not likely to outweigh the attractive returns being offered by the sector. According to forecasts from the consultancy CBRE, real estate investment between now and the end of the year is expected to amount to almost €3,000 million, taking the total for the year to between €8,500 million and €9,000 million.

Original story: Expansión (by Daniel Viaña and César Urrutia)

Translation: Carmel Drake

Venezuelan Group Invests €180M In Two Projects In Spain

5 July 2016 – Expansión

More Latin American investment in the Spanish real estate sector. A Venezuelan group controlled by the businessman Juan Guillermo Álamo (pictured above) is backing two projects in Madrid and Barcelona that are going to require a total investment of around €180 million. In the Spanish capital, through Ibemetex, the investor plans to invest €150 million in the transformation of the La Ermita shopping centre, which the entity acquired in 2009, at the height of the crisis in the sector.

Under the framework of the project to redevelop the land freed up after the M-30 was buried underground, an initiative actioned by the previous Town Hall of Madrid, Ibemetex managed to persuade the Town Hall to approve the demolition of the existing shopping centre and the construction of a new complex. The project involves constructing a 75,000 sqm building on a plot of land measuring 45,000 sqm, and will include homes, sports centres and a 150-room hotel, in addition to the retail space. “We are negotiating with the new Town Hall of Madrid to obtain definitive approval for the project”, said Álamo, who considers that his initiative will benefit the city and contribute to improving the area.

In addition to Álamo, Ibemetex has another high profile shareholder in the form of another Venezuelan businessman, Beto Finol, who holds interests in the lactose and livestock sectors and owns a pharmaceutical laboratory with operations in Venezuela and Costa Rica.

Ibemetex is also the owner of the Aqualon shopping centre in Huelva, another asset that it acquired at the height of the real estate bubble.

In parallel, Álamo is promoting the construction of a 125-home complex in the coastal town of Montgat, just a few kilometres from Barcelona. The project will involve an investment of €30 million and will be built on land that used to house the factory of the ice cream company Farggi, which he acquired in October 2015.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake

Irea: Hotel Investment Amounted To €2,470M In 2015

15 January 2016 – Expansión

Hotels are establishing themselves as one of the most sought-after assets in the real estate sector. The historically high RE investment level in 2015 boosted the hotel segment in particular, which accounted for 20% of total commercial real estate investment volumes during the year – excluding residential – compared with 11% in 2014, according to a report about the hotel investment market in 2015, prepared by the consultancy Irea.

Last year, 132 hotels were sold containing 29,081 rooms for €2,470 million, significantly more than the 50 operations that were closed in 2014. Moreover, properties worth €144 million were sold for conversion into hotels. In total, the hotel investment market amounted to €2,614 million in 2015, compared with €1,091 million a year earlier. Spain was the third most active country in Europe, behind the UK and Germany, and accounted for 14% of all European investment, up from 7% a year before.

54% of hotel investment in 2015 was focused on the holiday segment, which reflects “a return to normality for the Spanish market, where more sun and beach properties have traditionally been sold than city hotels”, according to Miguel Vázquez, Managing Partner of Hotels at Irea. This trend will be maintained in 2016.

The Canary Islands was the most sought-after region in 2015, accounting for 28% of total investment. It exceeded Madrid and Barcelona, where political uncertainty put investors on alert. By category of hotel, 62% of investment in the sector was focused on four-star hotels, although unique individual assets, such as the Hotel Ritz in Madrid (pictured above), were also sold.

40 of the 132 hotels sold were transferred through portfolio operations – involving two or more assets – and the Socimis were the main purchasers, together with domestic and international hotel chains, willing to invest in strategic assets.

Another significant milestone in 2015 was the purchase of land in Málaga for the development of new hotels, which was seen for the first time since before the crisis. Nevertheless, Vázquez thinks that, “land purchases will be few and far between in 2016: right now it is more profitable to buy a hotel and renovate it than to construct one from scratch and financial institutions are not ready to provide finance yet”.

Debt portfolios

Nevertheless, the experts do expect that there will be more operations involving the sale of debt portfolios secured by hotels in 2016. They amounted to €466 million in 2015. (…).

Irea expects that 2016 will be a good year, but the firm thinks that it will be difficult for the strong figures recorded last year to be repeated. Madrid will continue to be the preferred investment target and capital inflows there may have exceeded €582 million in 2015. Barcelona, where investors perceive more risk, will remain frozen to investment in new projects. For existing hotels, record figures in terms of price per room may be reached.

Original story: Expansión (by Y. Blanco)

Translation: Carmel Drake

CBRE: RE Investment Grows By 51% To €5,264M In H1 2015

6 July 2015 – Expansión

Five star hotels, commercial premises on the country’s most iconic streets, large shopping centres and office buildings. All of these assets have changed hands in recent months in the Spanish real estate market, which has been extremely active in recent months.

Between January and June, real estate investment (which includes offices, shopping centres and retail premises, logistics warehouses, hotels and residential assets) amounted to €5,264 million, according to the consultancy CBRE. That figure soars to €8,434 million if we include the purchase of the real estate company Testa by the Socimi Merlin Properties.

The amount represents an increase of 51% compared with the first half of 2014, a figure that itself represented a two-fold increase with respect the previous year. Thus, total investment during the first half of the year increased from €697 million in 2012 to €1,455 million in 2013, to €3,475 million last year and to more than €5,200 million in 2015, according to CBRE. (…).

By quarter, the volume invested in the second quarter (from April to June) was slightly lower than during the first quarter: €2,337 million compared with €2,928 million. “The decrease in the second quarter was due to the fact that some transactions were delayed and also because some very large deals were closed during the first quarter, including Gran Vía 32 and Plenilunio”, explains Paloma Relinque, Investment Director at CBRE.

By asset type, offices and retail assets (both large shopping centres, as well as shops on the main streets of Madrid and Barcelona) have featured in the largest deals. In the case of offices, highlights include the sale of Ahorro Corporación and Sareb’s headquarters on Castellana 89 (Madrid) to the March family for €147 million. In terms of retail premises, in April, the insurance company Axa paid €308 million to the Socimi Uro Property for 400 Banco Santander branches.

There have also been important transactions in the hotel sector, including the sale of the Hotel Ritz, which was transferred for €130 million. (…).

Types of investors

Although the investment growth trend seen in 2014 was repeated during the first half of 2015, there was a change in the mix of investors by nationality. Whilst at the beginning of last year, the more opportunistic US funds accounted for 53% of transactions, compared with British and German funds, which accounted for 5% and 1% of deal respectively; during the first half of 2015, US funds accounted for just 21% of total volumes, whilst investors from the UK accounted for 22% of deals, followed by Canadian funds (9%) and German funds (6%), according to CBRE.

Moreover, the Socimis Lar España, Merlin Properties, Hispania and Axiare are still the major players in the market for real estate investment. “The Socimis are performing very well, which is great for the sector because they purchase office buildings, for example, to refurbish them and add value, which improves the real estate stock”, says Lola Martínez, Director of Analysis and Investment Strategies at CBRE.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake