Merlin Properties wants to take advantage of the strategic location of its Callao building in Madrid, where Fnac is currently located, to create a new exclusive restaurant offer with terrace, in what he believes will be the jewel in the crown of that property. Likewise, it will open new commercial premises at street level and there is still the question of whether the French distribution group will remain in its historic store.
The real estate company has designed a rehabilitation project in which the last six floors of the building They will be destined for gastronomy, very focused on quality restaurants and new offers in the capital, according to company sources.
This property has an area of 10,300 m² distributed over 11 floors. From the sixth level it will be assigned to that new area gourmet. As an attraction, moreover, the sixth, eighth and last floors will have terraces overlooking the Madrid skyline.
From this patrimonial society it is considered that this offer can be very attractive due to its location in the center, at the confluence of Callao, Gran Vía and Preciados, one of the busiest commercial hubs in Europe. In addition, it has the advantage of being one of the tallest buildings in the historic center, so the views from the restaurant terraces can be one of the most attractive points.
Right in the adjoining building on Calle del Carmen, El Corte Inglés has a gastronomic area on one floor with several operators. Not far away, in the Canalejas Gallery in Puerta del Sol, OHLA and its partner Mohari also recently inaugurated a food court with various brands. But in the case of Merlin, the socimi will look for restaurants that completely cover one or two floors and which will be accessed directly from Plaza de Callao. At the moment, the real estate company is negotiating with several candidates.
The intention of the real estate company is to maintain the mixed use of the building, with restaurants, offices and retail. Currently, Fnac is the only tenant of the buildingoccupying 7,000 m², after the departure of several companies from the office area due to the upcoming reform.
The biggest current unknown is whether the distribution group will remain a tenant of the building, although in any case it will lose commercial space. The Spanish real estate listed on the Ibex 35 negotiates the continuity of the French group in his most iconic store, the first he had when he landed in Spain in 1993, in a building previously occupied by Galerías Preciados. It is understood that both parties have a vocation for the warehouse to continue in Callao. The current talks are focused on how to reconcile the business with a project that is expected to last two years. Without the Fnac inside –with the building empty– it is also understandable that the work is more agile and simple.
Fnac was the lease ends at the end of the year and it will be from that moment when the reform is scheduled to begin, which will not be completed until 2025. A spokesman for the French company reports that it cannot offer information on ongoing conversations. “Negotiations and renegotiations of rent of commercial locations are part of the most absolute normality of retail activity”.
Another of the great novelties for Callao will be the new commercial premises at street level. The Merlin project may still have different configurations depending on the tenants, but it is working on opening a 1,300 m² store with a new access through Rompelanzas street and another with access on Preciados and Carmen. This new commercial offer would improve income for the socimi. In the fourth and fifth floor, has also designed an office space.
Around 19.4 million investment
This property came to Merlin’s portfolio from the integration of Metrovacesa’s tertiary properties. In 2018, the socimi valued this rehabilitation at 19.4 million euros in another presentation for investors.
The real estate company introduced in the document of its last presentation of results the reform of the property within its plan called Flagship of improvements in its commercial assets, after this project has been on hold in recent years for the complexity of the licensing process, since the building is protected. Among other urban planning requirements, it has had to overcome the approval of the Ciphan of Madrid, the Institutional Commission for the Protection of Historical, Artistic and Natural Heritage.