2023-12-01 06:00:06
Sport is proposed as one of the great real estate bets for the coming years, both as an investment and as an accelerator of the transformation of cities. It has already emerged in countries such as the US and the trend in Spain, despite being incipient, “is here to stay”according to the Harrison Street investment fund.
This was explained by Javier de Castro, Head of Iberia of this American fund specialized in alternative assets, during the 10th Real Estate Forum organized by IE and sponsored by idealista/data. At the event, de Castro was accompanied by consultant Jaime Colás; Beatriz Barco, executive director and head of strategy consultancy at Savills Spain; and Alejandro Campoy, general director of Savills Spain.
All of them agreed that sport opens a new opportunity both for real estate investment and for the transformation of cities, which will have private capital at their disposal to increase the tourism, leisure and physical activities offer, as well as create green spaces.
And one of the objectives of ‘sports real estate’ is to use sports facilities for other uses in order to make them profitable, as well as create an ecosystem in its surroundings.
“Sport is increasingly closer to real estate. A sports asset cannot be conceived that does not have a hotel, an office or a shopping center next to it,” he stated. Alejandro Campoy, general director of Savills Spain.
To understand how the sports and real estate worlds come together, it is enough to review the specific case of the new Santiago Bernabeuthe Real Madrid stadium, whose renovation is promoting new restaurant spaces and will allow non-sporting activities to be carried out thanks, for example, to the system that allows the grass to be hidden.
He WiZink Center of Madrid (former Sports Palace) is another example of how to combine getting a performance out of a facility beyond sports, in this case through concerts and shows, just like the tennis academy promoted by Rafael Nadal in Manacor (Mallorca), his hometown, which has a hotel, international school, gym and spa.
This modality also includes the new complexes that are being promoted in the heat of this trend y that mix the sports field with others such as education and residential. An example is Harrison Street in the Madrid municipality of Villaviciosa de Odónnear the capital.
“We do not touch retail, offices or hotels. We are experts in student residences, build to rent, senior living, data centers… In Spain we currently have 1,600 build to rent homes under development and 4,000 beds in residences. And we created a ‘joint venture’ with T3N Sport and Investments to create a new asset, with the aim of replicating the model in other parts of Spain and exporting it to other countries.
As idealista/news announced last March, the US fund committed to invest 300 million euros to create the largest group of sports ‘colivings’ in Europe, after reaching an agreement with ColivINN, one of the main operators in the national market, and its sports complex operator T3N Sport and Investments.
The model he wants to replicate is that of the ESC LaLiga/NBA center, a 42,000 m2 complex, in Villaviciosa de Odón, which includes a seven-building student residence with a capacity for 450 places, an American school, a high-performance clinic, basketball pavilions, soccer fields, gym, swimming pool… This concept, according to de Castro, is based on creating a “football complex to sleep, study, train… Everything is in one place.”
Investor interest
During the day, the speakers insisted that this type of project is attracting the interest of large investors. In the US, for example, there is a list of funds that are focused on the sports business. and in looking for what uses they can give to the facilities to make them more profitable, while in Spain the agreement between the British fund CVC and LaLiga stands out.
The pact is based on loans worth 2,000 million euros available for first and second division football teams, the amount of which must be allocated at least 70% to the renovation of facilities, in exchange for the transfer of 10% of television rights.
Apart from this agreement, Beatriz Barco, executive director y head of strategy consultancy de Savills Españaassures that the consulting firm has been working with sports projects for “20 years” from different perspectives: advising on urban planning procedures, management, issues related to sustainability… However, it has been “in the last two years when there has been a change and funds and specialized managers have entered.
The reason, as explained by the person in charge of Harrison Street in Iberia, is that “all funds look for extra returns at a time of compression of ‘yields’ and higher financing costs”, hence they are looking “new asset classes that give more profitability, although that also implies more risks.
Added to all this is the attractiveness of Spain for being the birthplace of great international athletes and for the climate, as well as for the celebration of the 2023 Soccer World Cup, together with Portugal and Morocco. In his opinion, it is a perfect moment “to attract American, Asian and Arab capital that wants to invest in sports.”
A vision that is also shared by the Savills board, who affirms that “the interest of the funds, the World Cup… are going to accelerate investments and all these changes.” From the consultancy, they also remember that “in Europe we are light years away from the US in the management of sports companies”, which leaves “a long way to go.”
Urban regeneration
In addition to the interest for investors, experts assure that These types of projects are an engine for the transformation and modernization of cities, Therefore, both city councils and autonomous communities are open to studying its implementation.
“Sport has no political color. From the Balearic Islands to Valencia, Andalusia or the north of Spain, All mayors and regional governments want to do projects like this. On the one hand, because they go hand in hand with a local club and have social development and, on the other, because they manage to bring private money to build projects, promote sports, create schools… All of this regenerates the area. In addition, the projects are also committed to sustainability. In our case, we installed solar panels and we have a system for collecting water,” details the Harrison Street manager.
Along these lines, the Savills executive assures that this type of projects helps give visibility to cities, like Manacor thanks to Nadal’s tennis academy; and become a Tourist claim, as in the case of the Santiago Bernabéu. “There is a brutal tourism of the stadiums, and they become a reference for the entire city,” emphasizes Barco.
For the consultant Jaime Colás, who was sponsorship director of Real Madrid and later commercial director of Inter Milan and is currently the business development director of the Baskonia-Alavés Group, We are facing “a before and after” in this type of projects, and he believes that “cities have to start thinking that assets have to have a usefulness and profitability, although until now it has not been seen that way.” “The qualitative leap is going to begin now,” she insists.
Custom projects
What experts also agree on is that the same solutions cannot be implemented in all projects.
Consultant Jaime Colás assures that “each property has an income statement”, so management has to be very focused, and insists that “each project has to be profitable ‘per se’.” The consultant remembers that the concept ‘multisport use’ is very broad and that “not everything goes.” The key, in his opinion, is to detect “what the investment requires and to know what is culturally needed.”. For example, what you can propose at the Santiago Bernabéu, which is on Paseo de la Castellana, is not the same as at the Civitas Metropolitano, Atlético de Madrid’s stadium, which is on the outskirts of the city.”
The Savills directive points out the same, which emphasizes that “each asset is very different. “There are no magic formulas here.”. For this reason, he sees it as essential “to do a good analysis of the users and how the facilities can be made profitable on non-match days in terms of retail space or visits. “What needs to be achieved is to make it profitable and sustainable over time and take advantage of sporting talent to create cities with social and economic meaning.”
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