Green light for the start of works to transform Barcelona's Estel Building into a high-level office complex. Will this time be the definitive one? Will the property manage to be reborn and embody a new life after having become a colossal real estate blunder? This is what the new owners of the former Telefónica headquarters assure, which has been practically abandoned for more than a decade, converted into a concrete skeleton that has been the great shame of the Eixample all these years.
After Telefónica's move to the Fòrum in 2011, the Estel Building, located at the confluence of Avenida de Roma with Viladomat, Calabria and Mallorca streets, was attempted to be converted into luxury homes and also into a hotel, but both projects failed. Now, after several changes of ownership and construction company, of failed starts and interruptions of works, suspensions of payments and even occupations and fires, the Barcelona City Council has just granted the building permit and endorsed the project presented by the German real estate investment manager Freo and the Bain Capital Credit fund. The municipal authorization was approved at the City Council's government commission held this Thursday.
These two investment groups acquired ownership of this real estate asset at the end of 2021, for an amount that some sources estimated at 120 million euros. Their first decision was to abandon the idea of building luxury apartments and opted to transform the ghost building into a modern office complex, taking advantage of the strong increase in demand for workspaces located in the city center, one of the main trends in the post-pandemic real estate scenario.
The works will begin immediately and will have a cost of more than 80 million euros, with the forecast that they will be finished by the end of 2024, according to CBRE and JLL consultants, who will be in charge of co-exclusively marketing the new offices, explained this Friday. The new Estel Building will have more than 51,000 square meters of offices and individual floors of up to 5,000 square meters, which will be among the largest in the city. The architectural project has been commissioned to the firm Blanch + Conca Arquitectura (BCA), which has conceived a building that aims to be certified with the highest score in terms of sustainability and well-being and that will have "a multitude of terraces". Another of BCA's priorities has been to seek maximum integration and connection of the building with the neighborhood in which it is located.
The complex will be equipped with an auditorium and multiple rooms for meetings and events, as well as other services such as a gym and entertainment and socialization areas. One of its main hallmarks will be the terraces and exterior garden areas, with more than 8,000 square meters. On the ground floor there will also be commercial and restaurant premises open to the public.
According to CBRE, the renovation of the Estel Building "will boost the economic activity of the center of Barcelona and will drive the city center after a period in which most new quality projects have been located in districts such as 22@, Plaza Europa or the Diagonal-Paseo de Gràcia axis". "This is the largest urban regeneration project for offices in the center of Barcelona and will help attract large companies that, until now, had found themselves needing to leave the city to find this type of surface," emphasizes Lindy Garber, CBRE executive.
The property aims to be a benchmark in sustainability
The Estel Building was built in 1975 by the architect Francesc Mitjans, author of Camp Nou and Torre Banc Sabadell. The transformation conceived by BCA will respect the distinctive characteristics of the original building, which is like a horizontal skyscraper, but will become a "more transparent" building open to the outside, since the original was more compact and closed, having been conceived to house the machinery of a telephone operator. The most striking element will be the large facade on Avenida Roma, with a large white structure and horizontal slats.
According to Freo and Bain Capital Credit, the project will be "a benchmark in sustainability" and will aim to be certified as LEED Platinum, WELL Platinum, SmartScore Platinum and Wiredscore Platinum, in addition to Zero Net Carbon certification. 35% of the building's energy consumption will be through sustainable sources through the installation of photovoltaic panels.
Freo is an international real estate investment and development group, with 2 billion euros in assets under management and offices in Germany, France, the United Kingdom, Spain (Madrid and Barcelona). For its part, Bain Capital Credit is considered one of the leading global credit funds, with approximately 43 billion dollars in assets under management.
The first fund that acquired ownership of the Estel Building when Telefónica decided to change its headquarters was Carlyle, which paid more than 200 million euros to the operator in 2007. Its idea was to promote luxury homes, a project that failed with the outbreak of the real estate crisis. From 2013, the property changed hands; its recent owners include Sareb, Platinum Estates and the Indian Gidwani family, who unsuccessfully tried to promote different projects, including the opening of a Hyatt chain hotel, which ran into the city council's hotel moratorium.