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The Spanish Real Estate Market in June 2021

June was an important month for the sector in Spain, as a series of transactions for hotels and logistics assets were finalised, along with announcements of new developments.

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According to BNP Paribas, real estate investment grew by 9% to €4.68 billion in the first six months of the year. In the second quarter, the figure was €2.816 billion, up 50% from the previous quarter and 203% more than the same quarter in 2020. Bankinter’s purchase of a portfolio of logistics assets alone accounted for 32% of the quarter’s total volume.

In the year to March, the volume of residential mortgage appraisals rose by 12%, according to the Spanish Value Analysis Association (Asociación Española de Análisis de Valor). In total, 108,000 such assessments were carried out in the first quarter with an average value of 208,000 euros, up 3%.

During the same period, three were 3,207 foreclosures on primary residences. This is the highest figure since 2017 and 84.1% higher than in the same period in 2020.

Companies

Colonial announced its acquisition of 13% of Société Foncière Lyonnaise, of which it had already owned 82%. After buying the stake from Credit Agricole, the socimi will now control 95% of the prime retail assets company in France. The firm has launched a takeover bid for the remaining 5%, which it expects minority shareholders to accept. The Spanish socimi has approved a capital increase of €350 million to carry out the transaction. SFL had recently issued 500 million euros in bonds.

Regarding developers, Aedas Homes confirmed that it had initiated negotiations to acquire the developer Áurea Homes, owned by the construction company ACR. The operation is expected to be finalised for around 80 million euros, the approximate value of Áurea’s landholdings. Estimates are that between 800 and 1,000 homes could be built on the land. This is not the first time that ACR has looked to sell the developer, after asking KPMG in 2019.

The developer controlled by Castlelake also announced an ambitious business plan, in which it aims to double its current turnover by 2025. Aedas forecasts an EBITDA of €350 million a year over the next five years.

Meanwhile, Allianz announced that it would buy the socimi Elix from KKR and Altamar for €140 million. Its portfolio consists of 21 residential assets comprising more than 420 homes. Elix will continue to manage the assets after the purchase.

The executive Antonio Gómez-Pintado, chairman of ASPRIMA and APCEspaña, presented his new developer Vía Ágora, two years after his exit from Vía Célere. The new company will specialise in developing rental assets. Plans are to invest more than 400 million euros in building 1,833 homes in Madrid alone, participating in public-private tenders. In addition, Gómez-Pintado will enter the industrialised housing business with Lignum Tech and the refurbishment business with Rehabiterm, as he exclusively told Brainsre.news.

Internationally, Blackstone announced the acquisition of the real estate company Home Partners for six billion euros. Home Partners specialises in buying homes and leasing them back with an option to buy.

Residential

According to a report published by Colliers in June, the residential market will account for 30% of real estate investment in Europe over the next five years. The report forecasts a strong recovery for Spain after the pandemic, with increasing asset prices.

Madrid City Council has been at the centre of real estate news after announcing the construction of almost 700 homes. The Housing Department will transfer 28.4 million euros to EMVS to continue financing new projects.

At the same time, the capital’s executive ceded a plot of land by the airport to build a 73-flat apartment building, including co-housing. It will do so in conjunction with Tectum, a private equity company dedicated to creating and operating a portfolio of real estate assets for rental homes.

Major developers announced new projects: Insur will invest €93 million in a new neighbourhood in Tomares (Seville), and Culmia will invest €143 million in a new development in Alcorcón. The Seville development will have 54,133 m2 of free residential space and will be ready in 2024, while the Madrid development will have 3,500 new homes, although Culmia will only be responsible for 550.

In contrast, the Supreme Court declared the El Puerto de Santa María General Urban Development Plan null and void. Acciona had been developing a hotel, 130 flats and 120 homes on the site. The company bought 88,000 m2 on the beachfront in 2020 for €20 million. At the time of the acquisition, the General Development Plan had already been declared null and void, a decision ratified by the Supreme Court.

Logistics

Dream Industrial announced the largest deal. The Canadian REIT paid €882 million for a logistics portfolio comprising 31 European assets owned by Clarion Partners Europe. In total, 827,000 square metres are included in the deal. 90% of the assets are located in Germany, the Netherlands, France and Spain.

Bankinter Investment refinanced its acquisition of Montepino with ING. For 470 million euros, the loan has a duration of five years and is the largest underwriting by a bank in the Spanish logistics sector. In addition, the company invested €8.8 million in an almost 8,000 m2 new logistics facility in San Fernando de Henares.

The logistics transport company DWS announced that it would build two warehouses in Barcelona and Guadalajara for €80 million. It has also signed a turnkey project with Merlin Properties to build a logistics warehouse in Cabanillas Park I, Corredor del Henares.

Also for €80 million, El Corte Inglés has put twelve logistics plots up for sale, comprising almost half a million square metres of land. BNP Paribas was selected to manage the divestment.

Mercadona announced the construction of a new 96,000-m2 logistics facility in the Los Gavilanes industrial estate in Getafe. The company will invest 28 million euros. This month, it also paid €98 million for its new logistics centre in Alicante, adding an extension of 53,000 m2 on top of the one it already has.

In the north of the peninsula, in Zaragoza, Panattoni bought land for a new logistics project next to the airport. It will be ready in the second quarter of 2022 and can be developed either as a single building of 14,000 m2 or as a multi-tenant building with several warehouses of between 2,500 and 4,500 m2 each. In addition to the site in Zaragoza, it acquired a 12,000 square metre plot in the Abra industrial estate, Bilbao.

CV Grupo announced that it would invest 30 million euros in developing three logistics platforms in Madrid and Seville.

Finally, GLP announced that it would buy 300,000 m2 of logistics land in Spain. This is double the amount of land it currently has in operation. According to the company, it has set aside three billion euros to carry this out.

Retail

The retail and shopping centre market is starting to pick up steam as the pandemic slowly winds down. According to figures for May, footfall in retail parks recovered by 6.2%.

The largest investment was made by Leroy Merlin, which will build a shopping park in Adeje for 187 million euros. The opening is scheduled for 2024.

Regarding shopping centres, a private investor acquired the Parque Ciudad Real shopping mall for €17 million. The asset has a GLA of 20,000 square metres and is 95% occupied.

In Valencia, Corpfin Capital sold several stores for €19 million. The socimi bought them in 2015 to refurbish and lease. Tenants include Vodafone, KFC, Starbucks and Aproperties.

The socimi Tander Inversiones bought the building at 15 Calle Goya in Madrid. Although the value of the transaction was not disclosed, it will ask its shareholders for authorisation to get a 25.5 million euro loan.

Another private investor bought two Bankia bank branches in Madrid and Barcelona for €3 million. The first one is near Madrid Río, and the one in Barcelona is in the Raval neighbourhood.

Bankinter and Sonae Sierra’s socimi sold a store in Vigo at 28 Rúa de Urzaiz, for 4.1 million euros.

Offices

According to a report by Colliers, investment in the office sector reached 600 million euros during the first half of 2021, more than twice that in the same period in 2020.

El Corte Inglés announced the construction of an office building on its Castellana site six years after its acquisition. In total, 15,000 m2 on three floors will be ready in 2024. The retail company bought the land six years ago from Adif for 136 million euros. Marta Álvarez’s company is considering selling its offices in Hermosilla and moving all its teams to a single headquarters in Méndez Álvaro.

The insurance company Allianz bought the headquarters of Everis Barcelona from Meridia for €180 million. Also, in Barcelona, KGAL acquired the Torre Esteve for €100 million. The space was owned by Iberdrola Inmobiliaria and has a gross lettable area of more than 19,400 sqm.

Merlin Properties acquired the office building located at 16-18 Calle Ulises in Madrid from Kennedy Wilson. This is the third asset purchased by the Californian company in Spain, after a building in Puerta del Sol and the Moraleja Green shopping centre.

Another socimi, in this case, Castellana Properties, sold two office buildings for €26.5 million, one in Alcobendas and the other in Seville. The one in Madrid has 15,660 m2 and the one in Bollullos de la Mitación (Seville) has 5,700 m2.

The last major transaction was the sale of the headquarters of El Diario Vasco to Amenabar, as part of a strategy by Vocento, its former owner, to “optimise its real estate portfolio.” The purchase was closed for 16.5 million euros.

UBS published a report for European managers on teleworking and the return to the office. It concluded that Spanish managers are the most reluctant to allow their employees to continue working from home. Almost half of them said that they would force a return to the office after the end of the pandemic.

Hotels

There were a large number of transactions in the hotel sector. At the same time, several openings and new investment plans were announced.

Bain Capital and Stoneweg offered €460 million to acquire the Selenta hotel chain. The hotel joint venture is the best positioned, ahead of investment bank Goldman Sachs and Canadian investment manager Brookfield.

The Supreme Court declared null and void the El Puerto de Santa María General Urban Development Plan, where Acciona was developing a hotel, 130 flats and 120 homes.

In the section on large transactions, Bain Capital and Stoneweg bought a 400-room hotel in Marbella, Mazabi, and a 100-room complex in Cadiz. Leo Messi’s hotel chain acquired its fifth hotel in Andorra. The Iverballes family office took over the Vía Castellana complex, while two private investors bought the Bonalba hotel in Alicante owned by Sareb. Next Point finalised its acquisition of a four-star hotel in Gerona, and Ferrer sold the Caprice Alcudia Port hotel in Majorca. The biggest deal was Meliá’s sale of a portfolio of eight assets to Bankinter.

The Smy Hotels chain announced, at an event in Madrid, the opening of 20 resorts together with Wyndham. Smy is in negotiations with the owners, although they will be exclusively in charge of management.

Banco Santander and Signal Capital launched a fund to invest €200 million in hotels in Spain. Each party committed €100 million to acquire hotels in Southern Europe, primarily in Spain.

KKH announced that it would invest 200 million euros in developing a mixed project in the Altadis building in Seville. This project will include a luxury hotel, a park and public and private facilities.

Radisson and Millenium opened their first joint hotel in Spain. Smy Hotels will do so on  August 1 with its first complex in Lisbon, and Barceló will open one in July in the south of Menorca, owned by Silicius. Marriott is adding two more hotels in the country; one in Tenerife, which opened in March and another in Ibiza, which will open next month.

NPLs

During June, several Spanish financial institutions managed to remove these bad debts from their balance sheets. Banco Santander is negotiating with the Canadian fund CPPIB and Cerberus to sell assets worth 1.5 billion euros. CaixaBank also commissioned the consultancy firm KPMG to sell a portfolio of non-performing mortgages on 4,500 properties valued at 576 million euros.

While Santander is trying to sell €1.5 billion in NPLs, the platform it shares with the Swedish fund Intrum, Deva Capital, has bid for a set of bad debts with a gross value of 1.1 billion euros, put up for sale by the Italian bank Intesa Sanpaolo.

The asset manager Hipoges bought a majority stake in Axis Spa. The Italian servicer has more than €2 billion in assets under management in residential, commercial and consumer loans.

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