The legendary Telefónica Building on Gran Vía, one of the icons of Madrid’s skyline, Spain’s first skyscraper and the tallest building in Europe when it was built in 1930, is officially on the real estate market. Telefónica has commissioned Rothschild Bank to manage the sale of its historic headquarters at Gran Vía 28, as part of a strategy to optimize its assets and gain liquidity.
A skyscraper with almost a century of history
Built in the late 1920s, the building was for decades the symbol of Spanish technological modernity and became the tallest in Europe, at around 90 meters high. Today it combines offices, the Movistar flagship store, and the Espacio Fundación Telefónica, one of the most active cultural centers in the center of Madrid.
Telefónica has been reviewing its real estate portfolio for some time and has already closed similar deals with buildings in Barcelona and its headquarters on Diagonal, following formulas such as sale & leaseback . The divestment of Gran Vía 28 fits into this efficiency plan.
How much is the former Telefónica headquarters worth?
Various industry sources, such as Cinco Dias, put the price at between €250 million and €300 million, although some estimates raise the value per square meter to levels that would place it among the most expensive properties in the capital. The building has more than 30,000 square meters of floor space and is located in one of the most popular tourist and commercial areas of Gran Vía.
All the offers received by Telefónica are along the same lines: to convert the property into a mixed-use luxury hotel, serviced apartments, and a commercial area on the ground floor. The operation fits in with the recent transformation of Gran Vía, which has seen former office buildings converted into five-star hotels, flagship stores for international brands, and premium apartments for tourists.
Although the idea of a large luxury hotel and exclusive housing is the investors’ favorite, any change must respect the heritage protection that weighs on the building, which is listed as a unique property. In addition, in order to move from the current use of offices to hotel and residential uses, it will be necessary to adapt Madrid’s urban planning, a point that the sector identifies as one of the main stumbling blocks of the operation.
One of the unknowns is the future of the Espacio Fundación Telefónica, which has established itself as a cultural hub with exhibitions, talks, and free activities in the heart of Gran Vía. It is not ruled out that the company will reach an agreement to continue occupying part of the building as a tenant after the sale, replicating the model used in other real estate divestments.