Spain continues to be in the investment spotlight with both Kennedy Wilson Europe and Meridia Capital Partners revealing deals today.
Kennedy Wilson Europe, the listed entity of the California-based firm, has acquired for €30 million Plaza Puerta del Sol in Madrid, which is a 65,000 square foot six-story building that requires refurbishment. The firm is expected to make a planning application to alter it from residential to retail use at the end of the year.
Significantly, this is the second time Kennedy Wilson has acquired a property since forming an alliance with listed Renta Corporación in 2014 when it announced the first deal would be the conversion of an office block into a luxury residential property in the Chamberi district of Madrid.
The joint venture struck is targeting investing in and converting properties in Madrid and Barcelona.
In a second transaction today, Barcelona-based Meridia Capital Partners said it had acquired a mixed use portfolio of 33 assets mainly in Madrid for an undisclosed price.
The portfolio, previously owned by a Spanish family office, includes office, retail and residential assets as well as a land plot in Valencia. Meridia launched its Meridia Iberian Real Estate Fund II in May 2014.
Both deals come in the same week that The Blackstone Group announced a transaction to buy malls in Spain and Portugal for around €500 million. The properties have been bought from Commerz Real, a subsidiary of Germany’s Commerzbank.
And last week, London-based Cordea Savills said that economic recovery in Spain would “power” the office sector.
New research, it said, showed Spain’s office sector offered one of the most compelling investment opportunities in Europe because of its strong correlation with the unemployment rate, which is falling sharply as the country emerges from deep recession.
“Rental levels in Spain’s prime office sector have a six-quarter lagged correlation factor of 76 percent with the country’s unemployment rate in the two decades between 1994 and 2014. In 2014, Spain saw the largest annual drop in the number of unemployed since 1998,” said the report.
The unemployment rate fell from 25.2 percent in February 2014 to 23.4 percent in February 2015. Consensus forecasts are that the economy will grow by 2.4 percent in 2015 and 2.3 percent in 2016.