State Industrial Subsidiaries Company (SEPI) faced a setback in its attempt to sell a property linked to its foundation in Madrid. The auction, initiated last May to offload the third floor of building number 2 on Quintana Street in the Chamberí district, concluded without attracting buyers. The asset was positioned for use as an office with cadastral value in mind but did not draw interest from the market.
The facility spans 668 square meters of constructed area and 107 square meters of common spaces, with the tender terms noting its current use and layout. The initial auction price stood at 2 billion 269 million euros, translating to roughly 3,400 euros per square meter purely on the usable surface. Despite this substantial asking price, investors did not submit bids.
In response, SEPI reduced its expectations by 24 percent for the second auction of the foundation’s former headquarters. The starting price dropped to 1 billion 718 million euros, below 2 thousand 600 euros per square meter when considering the entire surface. The public company issued a brief statement indicating that the tender was invalid and would be re-tendered with revised conditions, stressing that the sale aimed to improve the efficiency of the Foundation’s property use.
Brokers and potential buyers were given one and a half months to submit their proposals, which would be sealed and presented to the highest bidder. The bid deadline was set for 23 February, after the tender was published on 9 January.
The asset is located in a building erected in 1981, with the SEPI Foundation having registered ownership since 2012, according to the entity’s records. In 2021, the Owners Community of the building prohibited using any part of the property for tourist accommodations, a decision that was finalized with a notary’s acknowledgment.
In recent months, as housing access in Spain’s major cities has tightened, investors have shown growing interest in repurposing vacant offices into residential spaces or alternative living arrangements. Many ventures confront local urban-planning rules that restrict housing on tertiary land, although some projects permit flexible or medium-term accommodations when compliant with zoning constraints.
EY’s Office Property Telescope report notes that Madrid alone could repurpose about 1.8 million square meters of office space for residential use if repositioning targets occur, potentially enabling construction of around 20,000 homes. In a scenario involving SEPI assets, investors might explore converting offices into temporary student housing or co-living arrangements, characterized by private rooms and shared facilities that facilitate communal living. These ideas are not explicitly prohibited by the Owners’ Community agreement, though any such conversion would require careful coordination with local regulations and the property’s governance framework.
Laid out opportunities for the broader market include repurposing strategies that align with demand for affordable living options in major urban centers, offering pathways for efficient use of built space while respecting civic planning and community rules.