680 m² industrial parcel with warehouse, central Torrevieja

A 680 m² industrial-classified parcel inside the urban core of Torrevieja, with a small 76 m² warehouse already standing. One title, no horizontal division. Industrial parcels of this size inside city limits have effectively stopped trading — the combination is the entire reason this file is on the shortlist.

The asking reflects the asset as it stands today — the warehouse is from 1960 and is best treated as a starting shell rather than the value driver. The case for this acquisition sits in the land underneath and in three repositioning paths underwritten separately.

Scenario 1 — Logistics / last-mile warehousing

Refurbish the existing footprint and add modest extension within the existing buildability envelope. Lease to a small-format operator — couriers, e-commerce stockholders, local distributors. On current Torrevieja-centre industrial rents:

• Indicative rent: €6 – €10 / m² / month on the developable area, depending on covenant strength and fit-out spec.
• Projected annual rent at stabilised occupancy: €30,000 – €70,000+.
• Stabilised gross yield on €1.39 M asking: 3.5 % – 6 %.
• Operating costs (IBI ~€2,500 on industrial cadastral, insurance, asset management 5 %, 5 % vacancy reserve, 0.5 % maintenance): ≈ €13,000 – €17,000 / year.
• Net rental (pre-tax, stabilised) ≈ €17,000 – €53,000 / year → ≈ 1.2 % – 3.8 % net yield. The wide spread reflects the gap between exploitation of the bare 76 m² envelope (poor yield, headline only) and a buildout to the parcel’s permitted ratio (where the case actually works). After Spanish tax this trims by ~25 %.

The lower end of the range assumes a modest reno on the existing 76 m² envelope; the upper end assumes extension consistent with the parcel's buildability — which we confirm against the PGOU file in the engagement. The yield case is materially dependent on the buildout actually happening; on the 76 m² alone, Scenario 3 (land banking) usually out-performs Scenario 1 on a risk-adjusted basis.

Scenario 2 — Industrial-commercial hybrid

Recast the asset as a showroom plus warehouse, or split into two or three trade-service units. Hybrid product typically commands stronger rents than pure industrial because retail frontage on a working street has buyers; warehouse behind serves the same tenant. The model improves both the rent per square metre and the exit cap.

Capex is meaningfully higher than Scenario 1 — full façade work, glazing, climate, and tenant fit-out. We do not quote a single number here because it depends on the tenant mix you intend to write the deal around, but indicative all-in (construction + soft costs + fit-out on ~500 m² of repositioned envelope): €700,000 – €1,000,000 on top of the acquisition.

First-pass IRR underwriting on a 3-4 year develop-and-lease cycle: ≈ 9 % – 14 %, sensitive to exit cap rate and pre-let covenant. The case is strongest when an end-user is identified before construction starts — which shortens vacancy and improves the exit cap by ~50 basis points. We stress-test against a 12-month vacancy at stabilisation and a 10 % cost overrun in the full memo.

Scenario 3 — Land banking

The conservative version of the thesis. Industrial-classified urban land is a structurally constrained resource; once consumed, the supply curve does not refresh. Buy, keep the warehouse on a peppercorn or short-form lease to cover carry, and wait for the right exit — either a change-of-use opportunity under a future PGOU revision or a direct trade to an end-user that needs central footprint.

We treat the rental income as optional in this scenario. Conservative underwriting holds it at €0 and rests the case entirely on land appreciation.

Observable historical performance: urban-industrial parcels of this size class inside the Torrevieja municipal boundary have compounded at roughly 3 % – 5 % per year across the last two cycles — narrower than central commercial land because the industrial-use buyer pool is structurally smaller, but supported by a supply curve that does not refresh. Annual carry (IBI ~€2,500, insurance, minimal warehouse upkeep) ≈ €4,500 / year — ~32 basis points against the asset value. Five-year hold, modelled conservatively:

• Asset value at 3 % p.a. compounded → ≈ €1.61 M (≈ €220 k gross gain).
• Asset value at 5 % p.a. compounded → ≈ €1.77 M (≈ €380 k gross gain).
• Annualised return after carry, before exit costs: ≈ 2.7 % – 4.7 %.

What we still need to confirm

The cadastral identification is verified and the file is regularised on the fiscal side — that part is clean. Before arras we still pull and verify, together with you:

• PGOU file — the exact buildability index, maximum height and any restrictions on the parcel. This determines whether the upper end of Scenario 1's rent range is achievable.
• Utilities connection capacity — water, power and fibre on the existing warehouse, and the cost of upgrading them for any tenant heavier than light industrial.
• Warehouse structural assessment — the 1960 envelope is original; whether it stays, gets refit or gets demolished is a decision we make against an engineer's report.

What is and is not in the price

The €1.39 M is for the land and the existing warehouse, vacant. Standard Spanish closing costs apply on top — ITP at 10 % in the Valencian Community, notary, registry, due diligence — roughly €155,000 on a file this size. Each of the scenarios above is underwritten net of these acquisition costs in the full memo.

What is not in the price: any refurbishment or extension capex, the architect's project for Scenario 2, and tenant fit-out. These become line items in the model once the path is chosen.

How we run a file of this size

A €1.39 M industrial acquisition follows the same workflow as the commercial-building file: discovery call, signed engagement letter, full PGOU + cadastral + utilities audit, and the buy/no-buy memo with the three scenarios modelled to your capital structure. The memo is yours regardless of whether you proceed.