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KKR & Altamar Join Forces With Elix To Buy Residential Properties

21 July 2017 – Expansión

KKR and Altamar Capital Partners have formed an alliance to invest in the Spanish market where it wants to acquire, renovate and rent out residential buildings. The two funds have joined one of the property developers with the longest history in this sector, Elix, to launch a Socimi that will invest more than €200 million in the purchase of properties in Barcelona and Madrid.

According to sources in the know, yesterday (Thursday) the Socimi Elix Vintage Residencial was constituted, an investment vehicle that is expected to debut on the stock market once it has undertaken the bulk of its investments. This company, which is headquartered in Barcelona, has been created with a share capital of €100 million, most of which has been contributed by KKR and a group of international and domestic investors, including Altamar and Deutsche Finance Group. The other shares are held by Jaime Lacasa (pictured above, right) and Jorge Benjumeda (pictured above, left), founders of Elix.

This capital contribution could be more than doubled when debt is added to the mix. The idea is to buy around 40 buildings in three years, subject them to a comprehensive refurbishment and put them on the rental housing market once the renovation work is complete. The corresponding rental income will feed the Socimi, which plans to rotate its portfolio of assets every three years.

Although Elix Vintage Residencial may debut on the MAB initially, its aspiration is to debut on the main stock market.

Elix will be the company responsible for converting the properties, which is why it has been named as the industrial partner. With this vehicle, the company will be able to successfully scale its business model, which until now had been very concentrated within the El Eixample district of Barcelona. The company, founded in 2003, has managed to convert its brand into a reference in the renovation market in the Catalan capital and last year, it launched activity in Madrid.

“For Elix, this operation represents an important milestone in our development due to the cooperation with some renowned internationally prestigious investors”, explained Lacasa and Benjumeda yesterday. According to the businessmen, the Socimi “will support the growth and institutionalisation process” of the company.

Guillaume Cassou, Head of the Real Estate area at KKR in Europe, has been appointed President of the Socimi. “We are delighted with this new investment in Spain, in a sector that we consider has significant potential and in conjunction with partners with the standing of Altamar and Elix”, said Cassou.

Advice

Altamar Capital Partners, the Spanish independent financial services group chaired by Claudio Aguirre, will be represented by Fernando Olaso, Head of Altamar Real Estate.

The constitution of Elix Vintage Residencial has been advised by Freshfields, RCD, BDO Abogados and CBRE. The investment vehicle will be managed by Elix SCM Partners, a company chaired by Mercedes Grau – formerly a director at Banca March and partner at MdF Family Partners – and will be advised by Lacasa, Benjumeda and the lawyer Adolf Rousaud.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake