Spanish telecom operator Telefónica has exercised its pre-emptive right to acquire Diagonal 00, its Barcelona headquarters, taking control of the skyscraper ahead of rival bidder AXA Real Estate.
Spanish telecom operator Telefónica has exercised its pre-emptive right to acquire Diagonal 00, its Barcelona headquarters, taking control of the skyscraper ahead of rival bidder AXA Real Estate.
Telefónica will pay €107 mln for the tower, equalling the price offered by AXA Real Estate in June when it beat off more than 60 competitors and was picked as the preferred bidder for the asset.
The offer represents a 9% premium to the asset's selling price of €98.5 mln and is believed to reflect a net initial yield of 6%.
The sales process is being overseen by Catalan public agency Consorci de la Zona Franca de Barcelona (CZFB).
DIAGONAL 00
Built in 2010, the 110-metre high tower has been dubbed Diagonal 00 due to its location at the start of the Barcelona's main avenue, Diagonal. The property provides a total of 32,811 m2 of gross area over 24 floors and 295 parking spaces and is fully let to the telecom operator until 2060.
While Spain has undergone something of a resurgence in the past 12 months, particularly among opportunistic investors, the Telefónica asset sale shows that investors appetite is now as strong for core assets as for riskier product.
The asset was put up for sale by CZFB in May with a guide price of €98.5 mln and attracted 66 expressions of interest, 60 of which from international capital, including an offer from Qatari private investor Ibrahim Hassan Al Asmakh. Bids were also received from several German funds and some of Europe's largest insurance companies.
This is the second asset to be sold by CZFB in 2014, following the disposal of the Banc de Sang i de Teixits for just over €38 mln to Recober Inversiones. The public development agency is the owner of the free trade zone at the port of Barcelona and has built a number of high-profile assets in the area including Las Gloriès shopping centre, currently being redeveloped by Unibail Rodamco.