Kennedy Wilson Sells 10 Carrefour Supermarkets to Barings for €73.4M

14 January 2020 – El Confidencial

The US fund Kennedy Wilson has sold 10 supermarkets that are currently leased to the French retailer Carrefour to the British fund Barings for €73.4 million.

The stores are located in Madrid (2), Barcelona (4), Bilbao (1), Salamanca (1), Cádiz (1) and Almería (1), and together span a surface area of 38,800 m2 with 1,100 parking spaces. All of them are situated in central locations with good public transport links.

Kennedy Wilson will reportedly generate almost €30 million from the sale, which it plans to reinvest in new opportunities in Europe as well as in other projects already underway.

Original story: El Confidencial (by EC)

Translation/Summary: Carmel Drake

UBS Euroinvest Fund Acquires Core Madrid Office Asset

6 March 2018 – Property Funds World

UBS Real Estate has acquired the Titán 8 office asset in Madrid on behalf of the UBS (D) Euroinvest Immobilien fund. This transaction represents Euroinvest’s debut investment since the fund’s recent strategic relaunch.

Titán 8 is a prominent office asset in the south of Madrid comprising 18 storeys spread across 10,633 sqm and including 228 underground car parking spaces. The imposing tower has been acquired in Grade A condition having been completed according to the highest quality, efficiency and design standards in 2008 and well-maintained since. It features a glass curtain wall façade that offers impressive views from upper levels. Main tenants are from the financial business, the energy and service provider industry.

The asset is strategically located in Madrid’s business district of Méndez Álvaro, in the south of the city centre, and benefits from strong transport links, positioned adjacent to the M30 ring-road, providing access to Madrid’s international airport in just 15 minutes and with the capital’s main train station, Atocha, nearby. With highly constrained supply in the area and resilient occupier demand, Méndez Álvaro office rents have demonstrated buoyant performance over recent years.

Euroinvest comprises an EUR820 million portfolio of predominantly core office assets located across key European cities. Following a strategic review of the Fund, Euroinvest has strengthened its core-profile through the disposal of non-strategic assets and delivered a strong performance of 4.4 percent for its investors (as of 31 December 2017), outperforming its benchmark (MSCI OFIX Europe) by 260 basis points. The Fund’s management team is actively seeking further attractive investment opportunities that are in line with its strategy across top performing European markets.

Alexander Isak, Fund Manager of Euroinvest, says: “As the fund’s maiden investment since relaunching, Titán 8 is a perfect illustration of the high quality and resilient assets that we are targeting, benefitting from an excellent location which is proven to generate robust occupier demand and offering further upside as the Spanish economy strengthens.”

“We are pleased to be in a position to prudently invest in new attractive opportunities that we are identifying in the market, following a disciplined programme of non-strategic disposals and the extensive management of the Fund’s assets that has delivered a viable core European real estate portfolio for our investors.”

Euroinvest was established in 1999 as the first open-ended public fund focusing primarily on institutional investors, with this category of investors currently holding more than 95 percent of the Fund’s units. Its investment strategy is focused on core office properties located in the strongest European cities, demonstrating resilient occupational demand.

Original story: Property Funds World

Edited by: Carmel Drake

JLL: Only 11.5% Of Madrid’s Office Space Is High Quality

4 August 2016 – Mis Oficinas

Of the more than 18 million sqm of office space in Madrid, only 11.5% comprise high quality buildings, known as Grade A properties. And that percentage decreases even further if we narrow our focus to the stock of offices that are currently vacant, where such buildings account for just 8% of the total, according to a report compiled by JLL.

Specifically, in Madrid the report identified 139 Grade A properties, with a total surface area of 2.1 million sqm, which means that the percentage of high quality offices is significantly lower than in other cities such as, for example, Central London, where it is estimated that the ratio of Grade A buildings over the total stock ranges between 15% and 20%, and Paris, where it amounts to 16%.

To conduct its study, JLL defined three categories to take into consideration when classifying Grade A buildings: physical characteristics (height, surface area per floor, flexibility of the space, etc); technical features (air-conditioning/heating, security, energy supply and the management of the property); and services, as in those offered to the occupants of the building.

These properties are spread very unevenly across Madrid (CBD, Secondary, Periphery and Satellite). In this sense, more than 70% of the Grade A stock is concentrated in peripheral areas (in the Periphery and Satellite areas) and just 21.7% is located in the financial district (CBD), 457,310 sqm in total. On the other hand, if we consider the percentage of high quality office space over the total stock, in the CBD only 10.5% of buildings are categorised as Grade A, whilst in the Periphery area, more than 30% fulfil the criteria.

In terms of rental prices, JLL has identified three factors that determine the highest rents in the market: quality, location and public transport links. The combination of those aspects determines the final price. Thus, in the same sub-market, the difference between the rental price of a Grade A building and another property that does not fulfil those criteria could amount to 30%; in the same way, buildings with the same characteristics but with different locations may also have differences in rent of around 30%.

The level of penetration of Grade A buildings in the rental market is significantly higher than its weight as a percentage of stock and the trend is growing. Thus, in 2015, Grade A buildings accounted for 35% of the total rented surface area, up by 10% compared with 2014.

The ratio is even higher for transactions involving large spaces. In this sense, in rental operations for spaces measuring than 2,000 sqm, 48% of the space leased involved Grade A properties.

This data shows the (high level of) interest from companies in renting Grade A properties, as they are increasingly aware of the impact of the quality of their offices on their results and the productivity of their employees. Nevertheless, given the current levels of new leases and the scarce availability of space, the supply covers just over 12 months of demand. And that problem is not going to be solved through the construction of new properties, as they are insufficient to meet current demand. In fact, according to JLL’s report, 27% of the future space planned for the next three years, both refurbished and newly built, has already been leased or designated for own use.

Original story: Mis Oficinas

Translation: Carmel Drake