Meridia Capital places €200M+ offices on market

Photo of Omega Park in Alcobendas featured on Savills’ website.

Meridia Capital Partners is selling a major portfolio of a dozen office assets in Madrid and Barcelona with a total volume which could surpass the €200 million mark. The assets are currently part of the underlying investments of Barcelona based Spanish REIT, Meridia III, which is listed on the Mercado Alternativo Bursátil (MAB), a sub-market of the Spanish stock exchange akin to London’s AIM or Frankfurt’s Neuer Markt.

Known as Project Square, the sale process is being managed by Savills and includes the Omega building in Alcobendas; three offices on Madrid’s Julián Camarillo street and a property known as Virgilio II in the Madrid suburb of Pozuelo de Alarcón. The portfolio also includes well-known office buildings in Catalonia such as Citypark in Cornellá; two offices in Viladecans; the Diagonal Business Park in Esplugues de Llobregat and a centrally located office on Paseo de San Joan 75 which is let to Barcelona’s town hall. In total, Meridia is selling 80,000m² of GLA with approximately 1,200 parking spaces.

This is the first of the investment vehicles chaired by Javier Faus that has adopted Spanish REIT (SOCIMI) statuts and was focused on purchasing assets with value-add potential through refurbishments.

About Meridia Real Estate III, SOCIMI, S.A.

As of June 30^th, 2019, Meridia III had a total outstanding investment of €339.1 million and the total equity invested amounted to €158.4 million, plus an additional €25.3 million of committed equity for further payments in Project Scottish and for CapEx in other projects. Based on the latest financial statements, total net NAV of the Fund was€203.8 million. This represents a c.1.27x net equity multiple (post-carried interest estimate).

Meridia III is virtually fully invested with a highly balanced exposure between Madrid (49% of equity) and Barcelona (50%). By segment, offices is the predominant sector, accounting for 64% of the portfolio, followed by logistics (12%), retail (9%), hotel (9%) and residential (6%). At the time of the latest report, the portfolio was comprised of 32 properties: 24 office buildings, 4 logistics warehouses, 1 shopping center, 1 hotel and 2 residential units.

The fund’s 9% exposure to retail is due to a 30,740m² shopping centre located in the Barcelona metro and known as Barnasud. It was purchased from Unibail Rodamco in November of 2017 and is currently being refurbished. Meridia has various improvements planned for the asset including a new food court project which was presented to the City Hall for approval in Q2 19 and a waterproofing project. CINESA also signed an agreement in Q1 to refurbish the cinemas and there is an ongoing project to enhance the mall with creating a 367m² unit for leading pet store Kiwoko taking 3 of the 4 vacant units of the mall bringing the façade ahead and gaining GLA and height.