The time to buy properties has arrived.

The time to buy a house has arrived. Housing prices have fallen around 40% from the  maximum levels in 2013, meaning the sector has reached its rock bottom level. Experts see  an upwards potential in all real estate assets, but especially in houses and offices located in the best locations in big cities such as Madrid and Barcelona. These investments should  generate an annual yield of up to 7%, as well as the revaluation of the asset.

 

Source: Expansión

Sareb starts an express auction for 800 subsidized homes.

The bad bank (Sareb) intends to finish 2013 with the best results possible, after the critics received from Brussels. The company lead by Belén Romana has put 822 subsidized homes on sale in the Dorian project, for which Sareb intends to obtain around 50 million Euros, according to financial sources close to the operation.

The bad bank and its adviser in this operation, N+1, gave details from this operation last week, intending to close it before 2013 ends. The funds have been surprised by the celerity to get rid of this portfolio, however, they confess their high interest in the sale.

With this strategy Sareb wants to take advantage of the success the sale of subsidized homes is having among great foreign funds such as Goldman Sachs and Blackstone and the Spanish management companies Azora and Magic Real Estate.

This is why it has joined in one portfolio the subsidized apartments it has in its stock that belong to the same building. In total, seven apartment blocks that make up the Dorian Project, from the awarded assets transferred by Bankia and Catalunya Banc. Five of these buildings are located in Madrid, the other two in Guadalajara and Barcelona. (…)

Sareb would have another 7000 subsidized properties, mainly from Catalunya Banc. It has still not taken a decision yet on how to get rid of them. (…)

Source: Expansión

Mahou-San Miguel acquires its headquarters in Madrid for 38,5 million Euros.

The brewing company Mahou San Miguel has announced the acquisition of its corporate headquarters, on number 15 of Titán street in Madrid. The acquisition of this building, with more than 8500 square meters in thirteen floors, has been closed for 38,5 million Euros, according to the company.

At the beginning of 2010, Mahou-San Miguel moved to the former headquarters of the real estate company Nozar. At that time, it rented 7762 square meters. The brewing company occupies eight floors nowadays, the rest is rented to other companies. “The headquarters in Madrid have spaces such as the Club Mahou San Miguel, for internal and external events”, they detail from the group.

The move to Titán meant leaving the historic plant of Mahou on Paseo Imperial 32. These land is included in the operation signed by the brewing company and the football club Atlético de Madrid and the Madrid Council to reassess 92.297 square meters, 61.000 of which are in the hands of Mahou. Currently, this plot continues in the hands of Mahou. Mahou´s headquarters was developed by Nozar along with three other towers with an average surface of 10.000 square meters. The real estate company, in a creditor´s meeting right now, sold in 2007 three of the towers to the German fund TMW Pramérica for 200 million Euros.

 

Source: Expansión

The Spanish partners of the great real estate funds.

They are the current kings of the Spanish real estate sector. Funds such as Blackstone, Apollo, Fortress or Goldman Sachs, among others, have carried out the biggest acquisition of assets in the Spanish market. With a slow start in our market, due to the high prices first, and after that because of the lack of trust in the national economy, the situation has changed radically since the summer.

The closure of the first operation by Sareb, called Toro, had a call effect and in hardly four months, there have been acquisitions for more than one thousand million Euros. Toro was followed by Bermudas, with the sale of credits for hundreds of millions from the listed real state companies such as Realia and Metrovacesa.

Sareb was not the only one to attract attention from funds and as an example, two packages of subsidized properties from the Council and Region of Madrid were acquired by Blackstone and Goldman Sachs. Other funds, such as Baupost, are finalizing the acquisition of a package of eight malls for 180 million Euros.

The sale of these portfolios with a high volume and important discounts has attracted funds from all over the world to Spain. In some cases, the negotiations are carried out from the headquarters of these firms abroad.  In these cases, the firms collaborate with law firms and real estate consulting companies with a team in Madrid, who are in charge of studying and closing the acquisitions. Once the
assets have been acquired, the funds search for teams located in Spain that may manage them and help them to recover their yield.

Here is when companies such as Azora enter the game. This company has been managing subsidized homes in Spain for many years and has collaborated with Goldman in the management of 3000 homes they have acquired in Madrid. Other firms, such as Magic Real Estate, have less experience as a company, but rely on managers with a long experience in the sector. Others, like Grupo Lar recycle themselves from great developers to managers of malls for third parties.

This phenomenon has also caused a great interest in the platforms of real estate management belonging to the financial institutions. In the last few weeks, the acquisition of some management companies from banks such as Santander or Popular has been closed.

Before that there were agreements with CaixaBank, Bankia, Catalunya Banc and Banesto. Investors such as Kennedy Wilson, Värde Partners, Apollo TPG, Cerberus and Centerbridge have invested nearly 2000 million Euros in these platforms.

With these acquisitions, the funds get employees, the agreements for the management of properties and the credits to developer from banks. But these operations are also seen like the anteroom of great acquisitions of assets from these institutions and as the base to manage and acquire properties from Sareb. (…)

Source: Expansión

Fortress acquires Geslico, the recovery business of the savings banks.

If everything goes well, Fortress will sign shortly the acquisition of Lico Corporación, the credit company for consumers and small companies from the savings banks. The operation includes a bonus: the recovery business, with twelve subsidiaries that were merging in Geslico and that are now being transferred to the vulture fund.

Financial sources have confirmed that the operation is practically closed and that only the signature of the transfer of the financing group is pending. Lawyers from both companies have established a date to sign the agreement approved by the shareholders of  Lico Corporación in the meeting held on the 25th  September, but was left pending due to the recovery business.

Finally, the U.S. fund has decided to include Geslico into the operation. This is a holding in charge of recovering the default credits, the recovery of payments, the refinancing and disinvestment in real estate assets, and the counseling and management of default from the savings banks.

The concentration process within the banking financial sector and the disappearance of several savings banks owning Lico Corporación caused a significant fall of the business of Geslico. In view of this situation, the shareholders decided to value the recovery business in order to sell it to a third party.   The main measure taken was the merge of the twelve subsidiaries belonging to the holding, so that a bigger company was created, with the intention of transferring it.

Finally, Fortress has chosen to keep this segment, which it already manages through Paratus,  a  firm  with  headquarters  in  Barcelona  with  a  staff  of  nearly  100.  With  the acquisition of Geslico, counseled by Société Générale, it will double its staff and will create one of the greatest companies focused on the chase on late payers and the recovery of credits.

In all, the distress fund will pay 220 million Euros for Lico Corporación, who employed more than 1100 workers in spite of the dismissal program approved at the end of last year in Lico Leasing. This working force will be transferred to Fortress,that already manages nearly 3000 million Euros in default credits.

One of the most important operations was the agreement with Banco Santander to assume a portfolio of default credits of 1.100 million Euros. A transaction for which it paid only 55 million Euros, as it had a discount of 95% on its value in books.

Lico Corporación, with assets for 745 million Euros, is the mother company of Grupo Lico, founded in 1988, twenty-five years ago. The holding is made of 21 companies that operate in the businesses of leasing, factoring, confirming, renting, corporate finance, payment of late payers, valuation of portfolios, insurance intervention and real estate investment. (…)

Source: El Confidencial

Deka sees Spain as one of its priority markets for investment.

The German fund Deka has established the Spanish market as one of its main investment objectives, as well as Germany and England. The person in charge of the management of the fund Deka Immobilien Investment in Europe, Esteban de Lope, declared yesterday that “until now Spain was a plan B”, but it now it is a priority again. “The recovery of the Spanish economy will be a hard and slow process, and therefore we are in no hurry, but the moment to buy has arrived”, he added.

Deka, that manages a patrimony of 177.000 million Euros, is searching for well located office buildings in Madrid and Barcelona. “We do not care if the buildings are in need of refurbishing or are looking for tenants: our priority is the location”, he pointed out.

The German fund has recently closed acquisition for 500 million Euros in London and 300 million in Paris. “These are very expensive assets, but also very stable”. Spain, however, “after the adjustment of the last few years, can offer a much more interesting development”, De Lope pointed out.
Deka intends to invest on the long term, from ten to twenty years. Today the German fund inaugurates the reform carried out on the Alta Diagonal building, in Barcelona, acquired for 165 million Euros.

Source: Expansión

Popular forms an alliance with two funds and sells its real estate company for 800 million Euros.

Two U.S. funds will manage from now on the real estate assets from Banco Popular. The institution presided over by Angel Ron closed last week the transfer of its bad bank, Aliseda, for  800  million  Euros.  This  price  values  the  management  of  the  properties  and  the developers credit of the group, but it is still necessary to determine how much Popular will receive for the operation, as the bank will still hold a participation in the new company. Although they are still negotiating, it seems that both funds, Värde Partners and Kennedy Wilson, will get 52% of the company that will receive the business from Aliseda, and Popular will get 49%. Should this be the case, the U.S. investors would pay 400 million Euros for Aliseda.

The price of the operation, advised by KPMG, boosted last week due to the reception of counteroffers from interested funds. The price that was being mentioned in the first stage of non-binding  offers  reached  650  million  Euros.  Centerbridge  and  Cerberus  were  the investors that were the closest to get Aliseda, although WL Ross, Lone Star and Fortress also took part in the negotiations.

Värde Partners and Kennedy Wilson will control the company to which both funds and the bank will transfer part of  their team. Popular could send the 300 employees that are currently working in the real estate company to this new company. On the other side, the funds  have  nearly 200  professionals in  Spain  from  the  acquisition of  CatalunyaCaixa Inmobiliaria, although it seems that there are no intentions of integrating both platforms.

The new location also needs to be decided. For the moment Aliseda is located in the center of Madrid, in the former headquarters of Banco Pastor.

What seems to be sure is that the operation will include the management of 9350 million Euros in credits for building and developments and the management and sale of awarded assets for a net value of 6500 million Euros. All assets will continue in Popular´s balance sheet.

Popular has not yet quantified the earnings it will receive for the sale. The institution intends to close 2013 with earnings for 600 million Euros, receiving already 370 million Euros in the first half of the year. (…)

 

Source: Expansión

Sareb sells credits from Metrovacesa to Bank of America for 80 million Euros.

Sareb has sold two bilateral loans from the real estate company Metrovacesa to Bank of America for 80,5 million Euros, as informed by two sources informed of the operation. (…) For the moment, official sources from Bank of America and Sareb have declined any comments.

With this transaction, Sareb has been able to sell a total 880 million Euros of its portfolio of loans from the great real Spanish real estate companies, including Metrovacesa, Realia or Colonial.(…)

 

Source: Expansión

Entrecampos, the first Socimi to enter the Alternative Stock Market.

 The real estate business is taking a different shape in the market. Entrecampos will start on the next 28th November its path in the Alternative Stock Market (ASM). And it will do so with the new alternative of the Socimi (listed public limited companies for real estate investment), a financial vehicle oriented to those companies renting buildings. “We represent a very different business to the one of the real estate companies listed in the stock exchange. The rental business has already digested the crisis, decreasing the rents. It is an activity which continues to be necessary”, Ignacio Segura, managing director at Entrecampos, explains. The company will start operating at a price of 1,59 Euros per share and will have 54,6 million  bonds  (representing  a  value  around  86,8  million  Euros).  In  this  operation, Entrecampos has been assessed legally by DLA Piper and by VGM Advisory Partners as a registered counselor.

The changed to the ASM takes place after the legal reform of last December. “We have left the market when the law has allowed us to do so”, Segura declares. The change in the law made the criteria to create the socimis more flexible, improving its taxation (0% on the company tax) and opening new ways to be listed with its negotiation in multilateral management systems, which are less strict than the traditional stock exchanges. This impulse has motivated that other companies within the sector would also be working in their change to that market.

Entrecampos pretends “to consolidate, grow and prevail in time” with the listing in the ASM, Segura declares. He admits that, generally, there can be some mistrust within investors to enter a company linked to the Spanish real estate sector. However, he hopes to catch the interest of other patrimonies wishing to enter an already consolidated socimi. “The future of the socimi will be linked to the patrimonial mergers”, he comments.

Entrecampos has some presence abroad (12,8% of its properties is located in Germany). However, Segura dismisses the entrance of foreign investors. “Before working with foreign patrimony it is necessary for us to grow”, he points out.

Source: Expansión

Housing prices rise for the first time in the last five years.

Housing prices have increased again, after five years. Only 0,91%, but the trend has been broken. However, the figure which really defines the sector is the annual one, and this one registered in the third quarter of the year a decrease of 5,3%, according to the statistics of the property registrars. But although it is still premature to talk about a recovery, there are already some analysts that consider that the landing is about to finish. According to this, the next step would be to touch ground.

The report of the registrars points out that “it will be necessary to wait for the next quarters to be able to confirm that, in fact, we are at a change of trend” or “simply within an economic situation”.

Housing prices have fallen by 31,07% since the peak of the bubble, according to registrars. Other sources, such as notaries public and valuation companies, talk of a descent of nearly 40%. In any case, “the current prices are at similar levels to the ones reached in 2003”.

The demand for houses was relatively stable, reaching 76.818 acquisitions during the third quarter, the second worse figure in history. However, the sum of the last twelve months continues providing positive figures, due to the effect of the elimination of the tax deduction on the acquisition of properties. In the last 12 months there were 334.867 acquisitions of properties (2,06% more). In reference to the second quarter there has been a descent of 2,76%.

55,36% of the operations were on second hand properties and the remaining 44,64% on new homes, which experienced an increase of 4,35% in reference to the previous quarter, maintaining  “an  acceptable  percentage  of  operations,  mainly  those  that,  directly  or indirectly, are in the hands of financial institutions”.

The regions with the highest number of acquisitions were Andalusia (15.782), Catalonia (12.411), Valencia (12.205) and Madrid (9532).

Following the trend of the last few months, the acquisition of properties by foreign citizens “continues to be one of the most important revitalizing factors of the Spanish real estate market”, representing in  the  third  quarter,  12,16%  of  the  total  number  of  acquisitions (17,2%, according to notaries). (…)

Source: Expansión