Sale of Morgan Stanley building for €60m reflects yield below 10-year bond rate
José Manuel Cavero, whose family is one of Spain’s largest property owners, has bought Morgan Stanley’s Serrano 55 HQ in Madrid for just under €60m, representing a record 3.5% yield – lower than the yield on Spanish 10-year bonds.
Owner Generali Lend Lease received unsolicited offers for the 5,400m² building on the edge of the central business district, which it bought for €39m from Grupo Lar in 2003. Armancio Ortega, owner of the Zara retail chain, was the underbidder.
Edward Farrelly, CB Richard Ellis Spain’s head of capital markets research, said: “Prime office yields are now so low that investors are buying for rental growth, which is expected to gather pace through 2006.”
Borja Sierra, Savills Spanish managing director, said: “A building in Serrano is always a good investment irrespective of the price.”
Also in Madrid, Inmobiliaria Colonial has paid Pramerica €103m for the 22,240m² Philips HQ, reflecting a 6% yield. Colonial will redevelop the site, which is let to Philips for another two years, as modern offices.
Marcus Lemli, head of investment at Savills Spain, which acted for Colonial, said: “To obtain modern offices at attractive prices and get good returns you need to do deals with a development angle.”
Meanwhile, Banco Bilbao Vizcaya Argentaria has bought the 8,000m² Madrono building in Madrid’s Alcobendas suburb from a private consortium for €70m, reflecting a sub-6% yield. It is also set to pay Credit Suisse around €100m for the 23,880m² Julian Camarillo 6 building in the Necsohenar industrial area, at a 5% yield. JLL acted for Credit Suisse.
And Renta Corporation has bought the 12,200m² Gran Via 48 from a private consortium for €82m. JLL acted for Renta.
