Spanish REIT Merlin Properties has acquired Torre Glòries, one of the tallest skyscrapers in Barcelona and reminiscent of the 'Gherkin' tower in London, for €142 mln.
The transaction volume reflects a capital value of €3,775 per m2. Merlin said it will invest €15 mln for multi-tenancy reconversion works and the REIT is targeting annual recurring revenues of €10.3 mln, representing an ERV yield of 6.5%, on completion.
Torre Glòries is located on the junction of Avenida Diagonal with Plaza de Les Glòries, in the tech-oriented business district known as 22@. At 142 metres, the skyscraper is the third tallest building in Barcelona. Tenants in the district include Cisco, Ebay, Yahoo, Deutsche Telekom, Sage, Sap, Capgemini and Indra.
The vendor was Spanish water company AGBAR.
The 34-storey building was originally designed by Jean Nouvel and Fermín Vázquez and opened in 2005. It comprises a gross area of 37,615 m2 plus a 350-seat auditorium. There are also 300 parking spaces located in four below-ground levels. The total constructed area amounts to 51,485 m2.
Through this acquisition, Merlin increases the relative weight of Barcelona in its office portfolio from 17% to 19%, and expands its presence in prime and CBD areas of Barcelona, which will now represent 40%.
Savills advised Merlin on the transaction. According to Savills research, total office supply in Barcelona has decreased by about 30% since 2013 and the current vacancy rate is 10%. Rental levels in Barcelona’s prime CBD were up 7% last year and average rents are expected to rise by 5% in the coming years.
Arturo Díaz, CEO of Savills Barcelona, commented: 'This is an extremely significant transaction for Barcelona's office market and it represents the increasing investor appetite for the city's trophy assets.'
