Azora buys an office building in Madrid from Australian giant Macquarie to find other uses | Companies

The Azora fund has acquired an office building for nearly 30 million euros on Calle del Doctor Esquerdo in Madrid, a property that could be converted into other uses such as a hotel or residential property, according to market sources.

Azora, with €9.4 billion in assets under management, is buying number 136 Doctor Esquerdo Street, in the Conde de Casal area (Retiro district), from GLL Real Estate Partners, a real estate arm of Australian giant Macquarie. The consultancy firm CBRE has advised on the sale process. Azora declined to comment.

This location is secondary in the Madrid office market, so the experts consulted indicate that the property will probably be converted to other uses. The office market, mainly the secondary market, is strongly affected by the investment appetite of potential buyers due to the rise of teleworking, which leads to more vacant spaces. A report by the consulting firm EY last year indicated, for example, that there are 2.5 million square meters of space in Madrid intended for companies that should change their use to housing, which would provide 28,000 new homes. The Merlin Properties Socimi, for example, also put up for sale a few months ago an office building in Velázquez, the epicenter of luxury residential. In the case of conversion to hotels, Besant Capital and its partners Blasson and Latam Capital Advisor have reached an agreement with Zurich to acquire the building located at number 44 Calle de Alcalá to transform it for luxury tourist use.

GLL had acquired the property in 2018 for 27 million euros. This German asset manager was, in turn, acquired by Macquarie precisely that year when it had a real estate portfolio of around 10 billion euros under management. The Australian fund, owner of GLL, is one of the world’s largest investors in energy, private equity, banking, infrastructure and equities.

For its part, the Spanish manager Azora, led by Concha Osácar and Fernando Gumuzio, invests in all types of properties: rental housing, hotels, offices, logistics, retail and data centers, among others. In Spain, Azora has four properties intended for offices (24,400 square meters of gross leasable area), although its largest market in this sector is in the United States (through the management company Azora Exan), where it has 17 assets valued at more of 800 million.

In recent years, Azora has invested heavily in the hotel sector, first with the now defunct Socimi Hispania and later with its two large vehicles destined for the tourism sector. With the second fund, as progressed last year Five daysplans to invest 2,000 million.

This sale comes to energize the burdened office transaction market after the Covid-19 pandemic and the rise in rates from zero to 4.25% annually, which makes the financing of large operations complicated. In Madrid, the Naturgy headquarters on Avenida de América, a Grosvenor property (owned by Hugh Grosvenor, Duke of Westminster) for around 130 million, is also for sale. The AEW fund is also looking for buyers for its recently renovated asset at Claudio Coello 124.

The Spanish fund also recently announced that it was entering the data center sector, in collaboration with Core Capital, by launching Quetta Data Centers, a platform that will invest more than 500 million euros in the construction of a network of six data centers.

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