real-estate-transactions Market News: Spanish Real Estate Intelligence

The Ruggieri Family Buys Eurosic's Spanish Socimi

18 October 2017 - El Confidencial

One of the wealthiest families in France has set its sights on Spain’s tourism market. The Ruggieri family, owner of the Batipart Group, reached an agreement in August with the also French firm Eurosic to purchase the Socimi that that firm had created in Spain, and has now renamed the entity Elaia Investment Spain.

After taking over 66% of the vehicle, Batipart has put all of the wheels in motion to enable the company to make its debut on the stock market before the end of the year, just like its previous owner had planned.

In this new business venture, Ruggieri is accompanied by Euler Hermès, owner of 13.81% of the Socimi; Allianz Invest Pierra, owner of another 9.21%; and around twenty individual investors who own the remainder of the share capital.

Elaia owns twelve real estate assets in Spain, primarily hotels and tourist apartments, although it also owns two residential properties in Madrid, on the centric streets Bailén and Atocha.

The Socimi focuses on three-and four-star category hotels and on taking advantage of the boom in tourist apartments. It owns two assets of each type in Mallorca and a hotel and two apartment blocks in Málaga, whilst, in Cataluña, it owns a hotel in Roses (Gerona), one tourist rental building in Barcelona and another in Estartir (Gerona).

In total, the Socimi has invested €145 million so far acquiring its portfolio, although its objective is to reach €280 million. To that end, it is currently holding talks with various investors, whose contributions will range between €10 million and €30 million.

When it debuts on the MAB, Elaia expects to have a market capitalisation of €120 million, a figure that will make it one of the largest Socimis on the market. The company will be managed by Elaia Management Spain, a subsidiary of Batipart, and the plan is to undertake some of its expansion together with Pierre & Vacances, its main partner in Spain.

The Socimi’s roadmap foresees it continuing with its intense asset acquisition policy for the next year or so, before spending the following two years repositioning those assets. The divestment phase is expected to be activated from 2021 onwards and that strategy is expected to be carried out on an asset by asset basis, culminating in 2024, with a forecast rate of return (IRR) of 15%.

Eurosic-Gecina’s heritage

The Batipart Group was founded in 1988 by Charles Ruggieri, who was born in Italy but who settled in France many years ago, where he is one of the top 100 wealthiest people in the country, with a net worth of around €900 million. A historical shareholder of Eurosic, in June, he agreed to sell his 24% in the real estate company to Gecina, in exchange for taking ownership of all of the leisure, health and hotel assets in the portfolio, including Elaia, worth €463 million in total.

That agreement was signed on 29 August, which is when Batipart took control of the Spanish Socimi. Moreover, the group owned by the Ruggieri family also has a presence in the nursing home sector, through the Korian Group, and it owns six hotels in Africa.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

 
Invesco & Niöra Acquire Residential Building In Madrid For €30M

18 October 2017 - Eje Prime

Another new partnership has been formed in the real estate sector. Invesco Real Estate, the global real estate investment management firm, and Niöra Real Estate, the real estate investment firm belonging to the Levante Capital Partners Group, have joined forces to purchase the property located at number 7 on Calle Génova, in Madrid. The project will involve a total investment of more than €30 million.

The real estate operation between Invesco and Nïora Real Estate marks the beginning of a collaboration between the two companies to create a series of luxury real estate projects, given that the two entities are already working together on the completion of a second operation before the end of the year.

The building, constructed at the beginning of the last century, is located in the Almagro district of Madrid, one of the wealthiest in the capital. Génova 7 comprises seven above-ground floors and one underground floor, spanning a total surface area of 6,088 m2. The property is going to be completely renovated to create retail premises on the ground floor and luxury residential units on the upper floors. The renovation, which is expected to be completed in 2019, will begin at the end of this year and Niöra Real Estate will be responsible for managing the project.

Niöra Real Estate specialises in originating real estate opportunities based on analysing the fundamentals in the market; repositioning assets, advising on the modification of features to improve their value; and optimising exit strategies and divestments.

Meanwhile, Invesco Real Estate currently has around $65,000 million in assets under management, which it handles through 21 offices around the world. This new acquisition is being incorporated into its European portfolio containing more than 130 assets in 13 countries, worth around $9,000 million.

Original story: Eje Prime

Translation: Carmel Drake

 
Sabadell Sells Its Hotel Management Company To Blackstone

17 October 2017 - Expansión

Sabadell has sold 100% of the share capital in HI Partners, its hotel management platform, to Halley Holdco, an entity controlled by funds advised by subsidiaries of Blackstone. The transaction price amounted to €630.73 million, according to a statement filed by the bank with the CNMV. Nevertheless, the definitive valuation will be subject to “possible non-material adjustments” and “is conditional upon obtaining the necessary authorisation from the National Securities Market Commission (CNMV)”.

Sabadell will recognise a net gain of €55 million in its results for this year as a consequence of the sale. Moreover, it will improve its maximum quality capital ratio (CET 1 without full implementation of Basel III) by 22 basis points. In June, its capital ratio amounted to 12.67%, in accordance with the calendar for the gradual adaptation of the rule, and to 12.1% assuming the full application of Basel III (fully loaded).

HI Partners is one of the largest managers of hotel assets, including debt, in Spain, with 29 properties in its portfolio and 4,793 rooms in total. Its establishments include the Hotel Ritz-Carlton Abama, in Guía de Isora (Tenerife); the Hotel Abora Catarina, located in Maspalomas (Gran Canaria); and the Hotel ME Sitges Terramar (Sitges), the Hotel Hilton Sa Torre, in Llucmajor (Mallorca); and the Abba Acteon, in Valencia.

Before the summer, Sabadell engaged the investment banks Citi, JP Morgan and Credit Suisse to sound out the market regarding the possible placement on the stock exchange of its hotel management subsidiary.

In addition to Sabadell’s majority stake, HI Partners’ other shareholders include the company’s management team, comprising Alejandro Hernández-Puértolas, Sergio Carrascosa and Santiago Fisas. Its most recent operations involve several agreements with the Canary Islands-based hotel group Lopesan, from which it purchased the hotels 'Ifa Dunamar', 'Ifa Continental' and 'Ifa Beach'.

Original story: Expansión

Translation: Carmel Drake