We have purchased our first property outside Germany, an office building at Calle de Vizcaya 12, in the heart of Madrid. The property has about 4,000 square metres of lettable office space, which is currently leased to the Spanish start-up Spotahome. We will be including the property in its own portfolio, with plans for extensive renovations to result in a sustainable building in line with the LEED Gold standard. The acquisition is the first investment in the company’s new international strategy of investing in attractive office locations in other countries in Europe in the future, beyond the German market.
We plan to continue to grow and tap into opportunities for value-added office investments within Germany and beyond. The newly founded Coros Advisory GmbH supports the international growth strategy with corresponding expertise and a strong team. Our international strategy involves by analysis of key European markets to pinpoint the most attractive real estate locations that have strong potential for value creation. One of the findings of this study drew our attention to Spain. The far above-average and lasting GDP growth, a marked decline in unemployment rates, growing demand for workers and a healthy business climate speak for this booming market. What is more, the quality of life, which is unique in Europe, attracts a strong pool of talent from all over the world.
In Germany, we have focused so far on office properties in the top seven cities, with increasing attention being paid in recent years to smaller, fast-growing cities as well, alongside mixed-use concepts that combine office, retail and residential space. Currently we have about 1.5 billion in assets under management (AUM), primarily in closed-end special funds and, since 2019, one RAIF. The current portfolio encompasses properties in Berlin, Düsseldorf and Hamburg, among other places.
Our company’s plans for Madrid involve a contemporary renovation of the building, which dates to 1960. High-end exterior design and a refurbished entrance area are planned to give the property a new look. The lifts and ceilings are also set to receive a facelift as part of the interior modernisation efforts. The goal is to achieve LEED GOLD certification, which applies to highly sustainable buildings.
The property is centrally located in the bustling cultural hub of Atocha, within walking distance from Madrid’s best-known plazas and the botanical garden. There are two metro lines right nearby, and the Madrid-Atocha long-distance train station is only about 500 metres away, served by long-distance and regional trains, all commuter rail lines and metro line 1. This makes Atocha an important transportation hub within the city.
The Spanish economy is developing positively. Figures published by the International Monetary Fund put gross domestic product up by 2.2% in 2019, outperforming the EU average. Spain has also seen ongoing strong demand for office space. According to information from Cushman & Wakefield, uptake of space in Madrid, Europe’s third-largest city, stood at more than 600,000 square metres in 2019. Only about 1.9% of all office space in the heart of Madrid was available, a further decline year over year. The thriving local start-up scene is also expected to further boost demand for flexible and modern office space in the country’s most important office markets, Madrid and Barcelona, in particular.
- First purchase outside Germany is part of an international strategy
- About 4,000 square metres of lettable office space in Madrid’s bustling Atocha neighbourhood
- Extensive renovations to result in a sustainable building with LEED Gold certification