Logistics Space: Demand Rose In Madrid & Barcelona In 2016

16 January 2017 – Inmodiario

Barcelona is breaking records in terms of the volume of space being leased; Madrid is improving its absorption rates compared to 2015; and both Madrid and Barcelona are resuming activity involving higher risk developments. Both cities are benefitting from the economic recovery.

410,000 m2 of logistics space was leased out in Madrid in 2016, whereby exceeding the volume leased out in 2015 (385,000 m2). This trend reflects the context of improving retail sales and internal consumption.

Demand in the capital centred around the A-2 and A-4 motorways – the latter stood out the most during the fourth quarter as it accounted for three quarters of the absorption seen during that quarter (126,000 m2), which in turn accounted for a third of the space leased during the year (410,000 m2).

39 new lease contracts were signed during the year, of which 6 were major operations covering a surface area of more than 15,000 m2. The trend was similar to that seen in 2015, in terms of both the total number as well as the size of operations. This confirms that the major operators and logistics users are concentrating their activity in the large logistics hubs.

We also highlight the new higher risk developments, in other words, those that do not have pre-agreed tenants, given the lack of available quality and the obsolescence of existing warehouses. In recent years, operators have been leasing the highest quality warehouses, which means that those left available do not fulfil minimum requirements.

(…) Almost 350,000 m2 of new build logistics space is expected to be constructed in 2017, with almost 100,000 m2 as turn-key or pre-lease projects.

Prime rents amounted to around €5/m2/month in Madrid in 2016 and are expected to rise, given the shortage of available modern space and the added values that the warehouses that are going to be opened in 2017 are expected to offer. (…).

The leasing of logistics space in Barcelona exceeded the record set in the previous year, to reach 645,000 m2.

That figure represents a YoY increase of 17% if we compare it with data at the end of the previous year (…).

The main operations included in this figure are: the new logistics centre that Amazon plans to inaugurate at the end of 2017 in El Prat de Llobregat, which will have a surface area of more than 63,000 m2. It also includes Mango’s leasing of space in Lliçà covering a surface area of 119,000 m2. (…).

Prime rents in Barcelona now stand at €6/m2/month, whereby returning to 2009 levels, having increased by 9% in 2016, due to the lack of Triple A product and the increase in demand from the main operators. (…).

Original story: Inmodiario

Translation: Carmel Drake

Land Shortages Curb Investors’ Return To RE Development

2 March 2016 – Expansión

CBRE, the Urban Land Institute and Esade gathered together representatives from several real estate groups yesterday in Barcelona; they all agreed about the lack of assets for sale in the market. Benson Elliot, Colonial, Merlin Properties, Vía Célere and Unibail Rodamco have suffered in the last two years from the avalanche of investors that have set their sights on Spanish real estate and have exacerbated the lack of assets on the market. The CEO of Unibail Rodamco in Spain, Simon Orchard, said that “we are forced to develop, because the type of product that is in demand does not exist”. The Director of Merlin Properties, Luis Lázaro agreed with him, “no warehouses have been constructed in Madrid for ten years, but the demand is there, which is leading us to construct turn-key projects”.

The CEO of Colonial, Carmina Ganyet, added that “the lack of quality products does not only relate to the location of buildings, it also manifests itself in terms of their features”, and as such, the group allocates around 20% of its investment to new construction projects, which also offer much higher returns, of 10% and 15%. The Head of Benson Elliott in Spain, Gregg Gilbert, said that his fund is looking for “this kind of return on all of its projects”. And the founder of Vía Célere, Juan Antonio Gómez Pintado, added that the biggest problem is the lack of land and “the government is lagging behind in this regard”.

Original story: Expansión (by M. A.)

Translation: Carmel Drake

Madrid Gov’t Wants To Sell Its Land Next To The Cuatro Torres

24 March 2015 – Expansión

Plans / Tomorrow (Wednesday) is the deadline for bidders to submit alternative plans to the Town Hall for the land where a convention centre was initially proposed.

The Town Hall of Madrid has decided to take advantage of the momentum in the Spanish real estate sector and make a profit from the plot of land it owns next to the Cuatro Torres, land that was severely hit by the crisis.

The site, located just behind the four skyscrapers owned by Bankia, Sacyr, Mutua Madrileña and Grupo Villar Mir, was designed to house Madrid’s International Convention Centre. However, in 2010, once construction work had already begun, Madrid’s Government got into financial difficulties, which put a stop to the project that was going to cost €300 million.

Five years later, the Town Hall of Madrid has launched a tender for the development of this plot and the transfer of the right to use this land for a 75-year period. The deadline for the receipt of offers ends tomorrow, according to the initial plan. However, sources in the real estate sector believe that this date may be extended, since interested parties have barely had a month to evaluate the land’s characteristics and its possible uses.

The land measures 33,325 square metres, with a maximum buildable area of 70,000 square metres. Around 53,000 m2 of this space must be devoted to public use. The remainder, around 17,500 square metres, may be used as a commercial area, but not a large shopping centre. “The special plan classifies the land as a single premises and, as an alternative use, it includes the possibility of devoting the land to the public administrations. Moreover, it establishes a regime of compatible uses, such as recreation and leisure, small and medium sized shops and other tertiary uses besides offices”, say sources at the Town Hall.

The possibilities include the construction of a large educational centre or a hospital. To this end, several investment funds have made contact with companies, Spanish and international, to offer them a turn-key project. That is, they buy the land and construct a building for a company, which then commits to rent it under a long-term contract.

In its award of the land, the Town Hall will take into account not only the financial offer, but also the requirement for the buildings be energy efficient, both during their construction and their subsequent use, and that the architectural appearance contributes “a singular piece to the urban landscape”. The successful bidder will pay an annual fee of €1.935 million.


KPMG’s recent move to the Cuatro Torres makes it the latest tenant to occupy offices in the complex. Opened between 2008 and 2009, the Madrid skyscrapers suffered when the (real estate) bubble burst, as its rate of uptake slowed down. Following KPMG’s move, Mutua’s property (Torre de Cristal), which until now had the most space available, will reach an occupancy rate of 70%. Torre Foster, owned by Bankia, is mostly occupied by Cepsa, although the bank itself also uses several floors. Sacyr’s skyscraper is entirely rented out to PwC and the Eurostars hotel, whilst the Torre Espacio has an occupancy rate of close to 90%.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake