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The State of the Spanish Real Estate Market in October

October was largely defined by the sale of the developer Vía Célere and the Council of Ministers’ approval of the new Housing Law.

Spanish Real Estate Market in October

October in the real estate sector was marked by the Council of Ministers’ approval of the new Housing Law. Also, important residential portfolios and office buildings were put on the market, and Värde Partners opted to sell the developer Vía Célere.

Market

Pedro Sánchez’s government announced the draft Housing Law. The main measures include a surcharge on IBI for vacant housing, price containment mechanisms, maximum rents and tax benefits to encourage homes to come onto the market. Market watchers such as EY believe that the new law would end 30% of the planned BTR projects in Spain.

Housing prices rose by 1.6% in September, for a total year-on-year increase of 8.3%. In addition, new mortgages soared by 66.9% to 33,105 loans in August.

In the third quarter of the year, real estate investment reached €3.413 billion, 15.4% more than in the previous quarter and 71.1% more than in the same period of 2020.

M&A transactions in September slightly recovered after two lacklustre months. In total, 34 transactions took place.

Companies

Among the largest companies in the sector, Värde Partners, the fund that owns Vía Célere, made a splash when it announced that it had hired Credit Suisse to prepare the sale of its developer. The operation could be articulated through a merger with other companies in the sector, also led by international investors.

Cerberus also sold off Haya Real Estate’s debt issuer. Beka Finance acquired Haya Securitisation, which manages debt issues worth €23.2 billion.

Ares Management announced to Brainsre.news its intention to continue investing in Spain after disbursing more than €1 billion since its arrival in 2019.

BBVA sold its last 20% stake in its former real estate company, Anida. Cerberus was obliged to execute the call option on Divarian. Also, Urbania acquired Colonial’s former ‘bad bank’, Asentia. The company owns a land bank of 900,000 square metres, with a buildable area of half a million square metres.

Azora agreed to an alliance with Exan Capital, a US asset manager, to expand its operations in the country. The joint venture will invest in offices, logistics, the residential sector, nursing homes and hotels.

The socimi Lar España issued €300 million in green bonds. Its second placement was five times oversubscribed, paying a coupon of 1.84%. Insur also placed fixed-income bonds for a smaller amount, €30 million, and Colonial finalised a €500 million bond issue through its subsidiary SFL, which matures in 2028 and has an interest rate of 0.5%.

The Natixis fund lent 100 million euros to Neinor Homes to carry out several build-to-rent projects. In total, the developer has received 400 million euros but expects to continue receiving capital.

The asset manager Alantra launched a debt fund. The company will grant loans of between 5 and 25 million euros on assets, up to a maximum of €132 million.

FCC acquired 13.11% of Realia, a move that was very well received by the market because FCC already controls more than 50% of the real estate company.

The professional services firm Grant Thornton and a company specialising in real estate assets, CCI Real Estate, teamed up to sell large real estate portfolios.

Residential

The Madrid City Council announced a new urban development, Madrid Nuevo Sur. Located between Delicias, Méndez Álvaro, Abroñigal, San Diego and Entrevías, the site covered an area of 2.5 million square metres. Seville’s City Council also announced the development of a new area in the North District, in which 720 homes will be built.

The German management company Patrizia is negotiating to acquire a rental housing project in Madrid from Invesco for around 50 million euros. The asset is a 140-home building in the San Blas-Canillejas district. The management company is also looking to buy 2,000 homes in Catalonia for €800 million from Becorp.

Blackstone’s socimi, Testa, put 800 units of its portfolio up for sale for 300 million euros. Should the transaction proceed, the vehicle would sell more than 10% of its portfolio in Spain.

Culmia and Ares announced investments of 200 million and 420 million euros, respectively, to develop more than 5,000 homes under Spain’s Plan Vive.

Ares’ partner, the developer Aedas Homes, announced a 50-million-euro investment in the development of 81 homes in Terrassa. Habitat Inmobiliaria will also start work on a project in Tres Cantos. The firm purchased land and set aside 36 million euros, which will enable it to build 96 homes.

Lar and Primonial launched their first co-living, a 7,500 square metre complex in Malaga. The complex will include a gym, multi-purpose room, social and games room, co-working space, events room, cafeteria, swimming pool, and terraces.

CBRE IM announced that it would invest €465 million in creating a rental housing portfolio. The company plans to bid for tenders launched by Spain’s various regional governments to achieve this objective.

The management company Argis launched a fund to invest 200 million euros in build to rent, co-living projects and tourist flats. Leverage would provide the firm with a total of 400 or 500 million euros to invest in the projects.

Institutional investors, the Swiss asset management company Partners Group and the Spanish financial group Dunas Capital will invest 400 million euros in a portfolio of 1,500 homes in Madrid, Barcelona, Malaga and Valencia.

The British company Taylor Wimpey earmarked €17 million for residential development in Alicante. The project includes 48 two- and three-bedroom flats located next to another residential development they developed in the past. Bilbao-based Kategora will invest 24 million euros in a resort in Tenerife, consisting of 88 one- and two-bedroom flats with terraces and communal areas.

In Mallorca, Aberdeen acquired a building with 121 flats. The build-to-rent complex is located 15 minutes from the city centre.

Offices

Starwood announced that it would acquire Barcelona’s Torre Estel. The Indian executives and current owners, Dinesh Gidwani and Jairam Mangharam Gidwani, will receive 120 million euros for the asset.

The Partido Popular commissioned Colliers to organise its move from Genova 13. The consultancy firm will have to explore the different options, sell or rent, and find a new location for the political party.

The family office Royal Metropolitan acquired Liberty’s headquarters in Madrid. In exchange, the insurance company received 35 million euros. The sale & leaseback operation will allow Liberty to remain as a tenant, though it will only retain half of the space.

Another insurer, Generali, sold a more than 4,000-m2 office building in the centre of Madrid to a family office. The asset is in Calle del Marqués de Valdeiglesias, in the neighbourhood of Justicia.

Also in Madrid, the socimi Saint Croix bought an office building. The Colomer family, who own Pryconsa, paid around 20 million euros for the property.

BNP Paribas put a 13,200 square metre complex in Méndez Álvaro up for sale. They expect bids to exceed 50 million euros.

Deutsche Bank’s asset manager, DWS, is looking to sell a complex leased to the Generalitat for 110 million euros.

Roebuck AM announced its interest in investing €300 million in logistics assets and offices in Spain and Portugal. Among the planned operations are development at risk, forward purchase and sale & leaseback operations.

Industrial & Logistics

Goldman Sachs created a logistics investment platform in Spain. Its subsidiary, Newdock, plans to invest one billion euros in developing new assets. The first project will be three warehouses in the province of Malaga, with three independent properties.

The asset manager DWS sold two assets in Madrid for €20 million. Both are in Getafe and are leased to Amazon and TXT. Deutsche Bank’s investment company initially acquired them in 2005 and 2008.

Singapore’s sovereign wealth fund (GIC), through P3 Logistics, bought five properties in the Pulsar portfolio from KKR and Round Hill. The assets are in Castilla La-Mancha and Catalonia.

GLP will develop an 18,906 m2 warehouse in Pinto, Madrid. According to the company, this is a speculative development given the current appetite for investment in the area.

The developer Panattoni is to develop a 45,000 m2 turnkey platform in Murcia for Alfil Logistics. The same company bought land in Alcalá de Guadaira to build a new 12,500 m2 property. In addition, it acquired the El Corte Inglés flagship in Tarragona for 70 million euros. The deal adds 45,000 square metres constructed and another 150,000 square metres of land for development to its portfolio.

Aberdeen commissioned DeA Capital Real Estate to develop a last-mile logistics warehouse in Madrid. It will pay €25 million for a 19,000 square metre warehouse.

Erke finalised the acquisition of its second logistics warehouse in Alcalá de Henares.

Retail

Carrefour supermarkets raised a ruckus with investors in October. First, Realty Income bought seven assets from Carrefour Properties for €93 million. The same REIT acquired another three such properties for 64 million euros from an unknown seller. Next, the Portuguese group Square AM bought a portfolio of hypermarkets, some of which are operated by Carrefour.

Pagoda Capital acquired a property in the centre of Bilbao for 7 million euros. The former headquarters of Iberdrola has 1,800 square metres of leasable area between the main floor and the basement.

The A Coruña-based family office, Pelayo Capital, acquired a store in Zaragoza. The asset has 2,650 square metres on a single floor at street level and more than 40 metres of frontage. It is currently a dealership.

Another family investment vehicle, in this case from Seville, bought a commercial property in the city centre. The 250-m2 property is rented to the cosmetics firm Kiko Milano.

Compañía de Phalsbourg, the owner of the future Oasiz Madrid shopping centre, announced a delay in the opening due to the transport crisis. The firm noted that there had been delays in needed deliveries.

Land

The Colomer family’s developer, Pryconsa, bought six plots of land in Alcalá de Henares. Spain’s Ministry of Defence also managed to sell part of the fifteen proprieties in total that it has on the market.

Tectum acquired a site in Cañaveral to develop 210 build-to-rent homes. The project will be carried out by Locare and leased at affordable prices.

Together with an investment fund, Momentum Reim acquired a plot of land in Valdebebas. The land, formerly owned by the Junta de Compensación de Valdebebas, has a buildable area of 36,448 m2 that will be used for serviced apartments.

La Llave de Oro, a developer, acquired a 225,000-m2 plot of land in Los Ahijones. The asset has a buildable residential area of 60,000 m2, representing some 600 homes, part of which will be rented.

A joint venture between Grupo Lar and Primonial acquired land in Malaga for a new build-to-rent project. They will build 76 homes there.

Seville’s City Council announced a new urban development on land in the Northern District focused on developing subsidised rental housing (VPO).

The developer Aedas Homes announced that it had invested 217 million euros in acquiring land during the first half of 2021. This incorporated land bank will allow it to build 3,000 homes.

Mercabarna acquired a 173,194-square-metre plot from the Zona Franca Consortium of Barcelona for almost 70 million euros.

Hotels

Spain registered 25.6 million overnight stays in hotels in September. This figure represents a 212.1% increase compared to the same month last year, largely determined by the coronavirus-linked lockdowns.

Union Investment acquired the Hotel Barcelona 1882 from Meridia for 60 million euros. The property has 182 four-star rooms and will be operated by Izaka Hotel Management.

Orienta Capital acquired a 2,700 square metre, 200-bed resort in Porto. It will be operational from January 2022, operated by The Central House. Hoteles Globales bought the three-star Castillo de Ayud hotel, located in Zaragoza. The Optursa Group company has a portfolio of 53 hotels.

The investment firm Boscalt and the asset manager Edmond de Rothschild AM created a new hotel investment fund. This vehicle will invest up to 500 million euros in the main European capitals, looking to build a portfolio of 1,500 rooms in 8-12 properties.

Also, former Cirsa owner Manuel Lao’s investment vehicle, Nortia Capital, announced its intention to invest €100 million in acquiring hotels over the next five years with Pulitzer.

NPL & REO

Blackstone neared the sale of its Hercules portfolio, initially acquired from Catalunya Banc in 2014. Morgan Stanley and CarVal are the best positioned to take the assets, with offers close to 80% of book value. The investment bank invested €3.6 billion in the purchase.

Sareb continued its sale of non-strategic assets. In this case, it offered international funds two portfolios of unpaid loans backed by land and hotels as collateral. They are valued at €500 million, though the loans’ original value was €1.5 billion.

The Norway-based opportunistic fund Axactor acquired a portfolio of bad loans from Caja Rural del Sur. The loans’ nominal book value is €116 million, although only €39 million are secured by mortgages.

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