Real Madrid appoints FCC to lead Bernabéu redevelopment

Real Madrid has awarded Spanish building and infrastructure company FCC Construcción the contract to handle the redevelopment of Estadio Santiago Bernabéu.

The LaLiga football club made the appointment yesterday (Wednesday) following a board of directors meeting. It stated that an evaluation report carried out by independent engineering company, Ayesa, deemed the proposal put forward by FCC to be the most economically viable.

Real also stated FCC’s proposal was the quickest way to carry the project out, as well as having a construction system in place that minimises any hindrance to the operating of the stadium and its surroundings during the work.

Majority owned by Mexican billionaire Carlos Slim, FCC has prior experience in the Spanish football stadia market having recently handled the development of Atletico de Madrid’s new home, Wanda Metropolitano. Financial terms of the contract were not disclosed, but Madrid-based business newspaper Cinco Días said the deal will be worth around €475m (£408.6m/$531.3m).

The award of the contract to FCC comes following a tender process which commenced on October 30. Invitations were sent out to all major Spanish construction companies, excluding Dragados, which is part of the ACS group chaired by Real president Florentino Pérez.

Real said the timeframe needed to renovate the Bernabéu is 39 months, meaning it would be finished by August 2022, plus an additional four months needed to develop the stadium’s exterior. The redevelopment work will take place alongside the normal sporting calendar and the stadium’s other activities.

The FCC deal comes after Real Madrid last month approved a financing package for the redevelopment of the Bernabéu, with US financial services giants J.P Morgan and Bank of America Merrill Lynch to lead the €575m loan.

Real will pay off the loan over a 30-year period, with a fixed interest rate of 2.5%. Key Capital Partners acted as the financial advisor and coordinator of the financing project for the club. The financing has been structured by J.P Morgan and Bank of America Merrill Lynch with the collaboration of Banco Santander and Société Générale. CaixaBank will be the agent in the transaction.

The financing has been structured through a loan with three tranches – July 2019, July 2020 and July 2021. A three-year deferral period for the principal of the loan has been agreed, which will result in Real Madrid paying an annual debt service of €29.5m, starting on July 30, 2023, and until maturity on July 30, 2049.

The redevelopment project is set to begin at the end of this season after Pérez provided an update on the plans earlier in April. Through extensive renovations, Real is planning to modernise the 81,000-seat stadium, which has been its home since 1947.

Image: Real Madrid