Independent sales transactions data on the Spanish commercial property investment market

One high profile failure in the Spanish retail leisure centre investment market may be about to get a face wash. According to press reports, Portuguese retail leisure centre investor and developer, Sonae Sierra, is in negotiations to sell the bankrupt Avenida M40 shopping centre to the Chinese Traders Association in Spain.

Sonae have been looking for a solution to the failing centre for a long time but have not been able to prevent its continuing decline to its present sate which is now one of almost complete abandonment. The poor performance is due to the location of the centre which is in a low income area next to the M40 ring road to the south of Madrid. Since inauguration, some 10 years ago, significant new competition has opened up within a short drive time which has not helped Sonae Sierra turn Avenida M40 around.

The outstanding debt of the centre is not helping matters. The initial bank debt was for an amount of €68.25m and currently is understood to stand at around €40m. The offer from the Chinese is understood to be slightly below this amount. Construction of the centre was a rare error made by Sonae Sierra demonstrating that even the biggest, and most professionally run companies, can sometimes make mistakes.

Exactly what the Chinese Traders Association in Spain intend to do with the centre remains to be seen. However, i-comparables.com sources indicate that one of the aims is to make a trip to the centre an interesting cultural experience. The retail gallery units are likely to focus on the sale of up-market Chinese foodstuffs, clothing and other good quality products. Whatever the Chinese do with it, i-comparables.com understands that the centre gallery area would definitely not be used for the sale of low quality Chinese products although the hypermarket could be turned into a wholesale distribution centre serving small to medium sized Chinese retailers.

i-comparables.com comment: If the sale does complete it will represent “a first” in the Spanish shopping centre investment market. Maybe it will be “a first” in the European real estate market also. Sellers take note! | i-comparables.com

Market sources in Madrid, Spain indicate that Barclays Bank (Banco Barclays) will shortly sign a mandate to sell an office investment at Plaza Colon 1. Barclays have already sold an office building in Calle Mateo Inurria, Madrid this year and also many bank branches located around Spain. See previous blog posts of i-comparables.com. The exclusive sales mandate is likely to go to one of the big three international brokerage firms: Jones Lang LaSalle, CB Richard Ellis or Cushman & Wakefield. 1 i-comparables.com

According to sources Apple has made an offer for the Banco Sabadell building in Paseo de Gracia 36, Barcelona. Competition for this type of prime property asset is fierce in Spain’s commercial real estate investment market and it is understood that Isac Andik, chairman of Mango, the Spanish clothing retailer, has also made an offer for the building.

Banco Sabadell are believed to be asking in the region of €50m for the building which is situated in Barcelona’s prime retail pitch. The bank recently purchased the upper floors of the building for €20m in order to generate more buyer interest and a higher price on the disposal. This is an excellent example of added value based on the advice of a reputable and professional consultancy firm, in this case Cushman & Wakefield.

It is understood that the chief attraction of the asset for both interested buyers is the 2,290 square metres of retail accommodation within the building. Apple are seeking to open the first “Apple Store” in Spain and Mango are interested in opening their second clothing store on Paseo de Gracia.

Isak Andik is one of the principle private shareholders of Banco Sabadell with control over 5.7% of the share capital. International property consultancy firm, Cushman & Wakefield, has the sales mandate of the building and a final decision with respect to the buyer is expected to be announced within a question of days.

i-comparables.com provides property transactions data on retail leisure centres, cinema complexes, shop units, office, industrial, logistics buildings and other property types in Madrid, Barcelona and the rest of Spain’s commercial investment property market. Contact us for a free demonstration. | i-comparables.com

Dutch retail shopping centre developer, Muli Development, are attempting to close the purchase of a large development site upon which they could construct a 180,000 square metres retail project and another site for office development of 35,000 square metres. According to sources there is only one other potential purchaser which comprises two investment funds working together and believed to be of British and Spanish origin.

The sites are located close to Barajas Airport, in an expansion area of Madrid known as Valdebebas. The area includes residential, office and retail projects. If the bid is successful Multi are expected to develop jointly with Spanish group, Proactiva Asset Management. A final decision by the compensation committee (Junta de Compensación) could take up to four weeks. | www.i-comparables.com

The following article first appeared under “news” on the i-comparables.com website on 11/02/2010:
British Fund in Due Diligence on H2O Shopping Centre in Rivas, Madrid
Avantis will receive aproximately €100m for the sale of the H2O shopping centre inaugurated only a few years ago. The due diligence process is likely to take a few weeks more before the transaction to a a large UK fund is completed. The fund already owns large investment properties in Spain. Source: | i-comparables.com

According to various sources, the British fund, Moorpark Capital Partners LLP have made an offer for 378 Spanish properties owned by Banco Sabadell. Most of the properties are between 500 sq.m. and 1,000 sq.m. which would indicate that the portfolio comprises mainly bank branches. The transaction, which is on a sale & leaseback basis is at a reported net initial yield of 6.65%. The transaction which was notified to the CNMV, Spain’s stock market regulator, could be completed within two weeks. More information for subscribers on www.i-comparables.com

i-comparables first published the following article on its website under “news” on 11/02/2010:

According to confidential sources Mapfre Inmuebles is close to closing the sale of the Masters II office building located at Calle General Peron 38, Madrid to the Consorcio de Compensación de Seguros. The sale of the building is likely to be completed shortly at an amount considerably below the asking price in the region of €128m according to i-comparables.com sources. The office building includes ground level retail units and some 400 parking spaces. The asking price represented a triple net initial yield in the region of 5% although the closing yield is likely to be considerably higher. The building enjoys a high occupancy level. Source: | i-comparables.com