Spanish property company Inmobiliaria Colonial has secured a prime redevelopment opportunity in the tight central Madrid market.
The company has paid Unión Eléctrica Fenosa (UEF) €81m (Pta13.5bn) for the 17,586m2 building at Calle Capitán Hayes. UEF will continue to occupy the building until October 2001. Colonial will then undertake an extensive refurbishment at the beginning of 2002.
“Colonial’s interest in the deal was securing a development opportunity in the central business district of Madrid. Last year there were very few opportunities to redevelop in the market,” said Marcus Lemi, director of Jones Lang LaSalle Capital Markets, which advised Colonial.
According to Jones Lang LaSalle’s latest Spanish report, the vacancy rate in Madrid fell to 1.4% in the last quarter of 2000. In 2001, 712,000m2 is expected to come onto the market but more than 50% of that figure is prelet or for owner occupation.
Lemi said the lack of sites in the CBD has resulted in companies such as Colonial looking for more innovative opportunities such as taking on the development risk.
Colonial has a market capitalisation of €800m and will deliver 133,000m2 to the Spanish market in the next two years.
