Real estate experts analyze the future of commercial premises that until now have been occupied by financial institutions.
Between this year and next, the banks are going to make thousands of bank branches available to the market as a result of the efficiency plans they are implementing. In the case of Santander, the entity is already closing 1,033 branches, the majority in Madrid, while CaixaBank and BBVA plan to do the same with 1,534 and 530 branches, respectively, so that only three banks will empty 3,097 premises throughout 2021.
The new Unicaja will join them later, which after its merger with Liberbank, which will close this summer, will have to make its own adjustment of personnel and offices, although it is still early to know the figures.
Spanish entities usually own part of their branches and another under lease.
In the case of the former, the usual thing is that they decide to give them an outlet through the sale of the premises, taking into account the characteristics of each one, since an office located in the center of Madrid is not the same as another in a small municipality. .
In the specific case of Santander, the group has created a company called Retailcompany, in which it will segregate the economic unit that integrates the empty bank branch management business with closure project or leased to third parties, a total of assets with a value of about 36.23 million euros.
BBVA and Merlin
While, BBVA has a lease agreement with Merlin Properties within the framework of the agreement on Operation Chamartín that extends to 666 offices, the fifth part of its branches in Spain, and which is valid, initially, until 2039.
From the socimi led by Ishmael Clement They ensure that it is a binding contract. In fact, when the merger of BBVA with Sabadell was on the table, Barclays estimated in a report that “canceling the deal would be expensive, until €1.7 billion according to the value of the portfolio, equivalent to 21 times the rent”. A not insignificant figure that the bank would have to assume.
From BBVA, Onur Young, its CEO, limited itself to pointing out a few days ago that the total number of offices to be closed could vary within the framework of the negotiation with the unions on its Employment Regulation File (ERE), although it confirmed that Merlin branches are included in the perimeter of those who could lower the blind.
Although in the presentation of the bank’s results it did not go into assessing how much the penalty by Merlin could amount to for the breach of the lease of some offices, Genç explained that there is “flexibility” in the contract to carry out the process.
The future of branches
This trend of closing branches in Spain opens up a range of opportunities for business premises, although with quite a few edges. To begin with, the CEO of aRetail, Miquel Roig, points out that “it will increase supply mainly in secondary areas (not main axes) where, already, the supply is higher as a result of the closures that have been taking place during the months of the pandemic.
This increase in supply, assures the director of Capital Markets of Colliers International, Mauricio Guerrero, will mean “a adjustment in both rental and sale prices”. “The price drop will be more aggressive in less attractive locations without a tenant,” he specifies. Of course, remember, “it is a product to take into account”.
Aurelio Garcia, senior consultant of Valliance and an expert in the Retail sector of Gesvalt, differentiates between those that are owned by the bank and those that are rented. In the case of the former, “the options open to the banks are to close the offices immediately reaching an indemnity agreement with the property The, in the event of costly compensation or long obligation periods, they could opt for the sublease, included in the clauses of their standard contracts”.
In the case of those offices that are owned by them, Aurelio García indicates that “it is most likely that they will determine the strategic importance of each branch based on their network of clients, keeping open those that are most profitable and relevant, after making a change in its corporate image to the new formats set by the company at a general level”.
If they were discarded, the Gesvalt expert points out that the banks would obtain a greater profitability by trying to rent them in the first place, as a previous step to the sale, although it is not a common practice of this type of company. In these cases, “in any case, the premises would be put up for sale on the market through auctions or, also, although it is less plausible depending on the assets of each entity, they have the possibility of creating and selling portfolios.”
Another fundamental key is the location of the branch. The national director of Colliers International Offices, Martin Galbete, states that “logically, those located in urban centers with higher densities will have better repositioning”.
Last mile warehouses
For these, the CEO of aRetail points out that “some of the large-area assets may be rented or used as last mile warehouses of large operators, supermarkets or food, or new concepts that are appearing as ‘dark kitchens‘ The delivery (for this, the municipalities must facilitate access to specific licences)”. “Besides the already proximity trade that every residential area needs”, he deepens.
“Those located in small towns will have it much more complicated”, acknowledges Martin Galbete. In secondary areas, Miquel Roig expands, “it will be the transformation or change of use of commercial premises (to residential or offices), although it is not always possible (by current regulations of the different municipalities)”.
In general, Martín Galbete concludes, “they will have to be reconverted since the future of bank branches does not exist”. Of course, he points out that for CaixaBank “its problem is going to be important, it is the bank with the largest number of branches in Spain”.