Month: January 2014

Agreement With Bank on Deffered Payment of 510 Million Euros

GECINA, a French real estate company hold by Metrovacesa and Joaquín Rivero and Bautista Soler, has refinanced two credits valued at 510 million Euros. The agreement with its banking institution in the framework of refinancing its entire debt was made at the end of 2013. The loans expiring this and the next year have been prolonged for 6 years more.

What is more, Gecina has negotiated the commissions for three unused credit lines of 430 million Euros, which will help it to cut about a million down on its financial expenses and has already cancelled mortgages for 140 million Euros.

Source: Expansión

Anima Investment Fund Buys 0.8% of FCC

On December 20th Ether Koplowitz, together with B-1998 and Azate, sold 3.8% of FCC to two institutional investors for about 15 € per share (total of around 72 million Euros). Although officially the names of the buyers remain unknown, the magnate George Soros acquired the 3%. According to the financial sources, the 0.8% was bought by a European fund, Anima, entity managing 44.000 million Euros in cooperation with more than a million of clients.

Thanks to the sale of 3.8%, Esther Kolpowitz could refinance personal debt of 900 millions by 2018.

On the other hand, FCC and its banks agreed to extend the expiration date of its debt by February 28th, by which date the agreement on restructuring 5.000 million Euros of its liabilities shall be made. The company counts on “the good will” of 95% of its 37 creditors under the terms of the refinancing proposal for the debt amount, with the liabilities total bulk equal to 6.577 million Euros noted down at the end of September.

Source: Expansión

Caixa Bank To Negotiate With Tenants of Block Occupied in Madrid

They call it La Manuela. A building of 5 floors in the heart of Malasaña has been occupied since Sunday. A dozen of families, (…) has started to settle down in an empty block on the Corredera Baja de San Pablo Street within the Malasaña district. On Thursday, the Housing Assembly Centro commented on the case during a press conference. This is the second occupied building in Madrid (the first is in Carabanchel) and 15th in Spain, according to their estimations.

On December 13th, families living in a property in Salt (Girona) were evicted on power of legal notice and where the PAH (Platform of Affected by Mortgage) has settled 7 families. The builing in Malasaña has been already occupied in 2011.

The place in this kind of property is destined for homeless and evicted families. In the vast majority of cases the buildings belong to bailout banks and this is the latest ongoing initiative of the anti-eviction groups, designating the action ironically as the “Obra Social” (Welfare Project, the same name the savings banks use) (…). At 12:00, on Thursday, the activists put a table in the middle of one of the dining rooms – kitchen on the 4th floor.

The building in Malasaña – with electric wires hanging from the roof, several bulbs on, parquet and almost new spotless doors – belongs to Caixa Bank, that is going to meet and negotiate with the occupants on Monday. The bank refuses to give any comment.

“La Manuela is neither the first nor the last recovered building in Madrid” – says one of the activists – “12 families are going to live in it, making the problem painfully visible: having an empty building belonging to a bank and bailed out with public funds is unacceptable and inhuman”.

(…). Two protesting women told their story behind the occupance. One of them, Marisa (51) highlights that “(…) There are rights that shall be granted to each person, like food, having a shelter, medicines and clothes”. (…).

Few months ago the anti-eviction group launched a campaign in order to prevent Marisa´s eviction from her home, titled: “Marisa stays”. (…) Despite this, Marisa has been evicted. Now she will settle down on the second floor of La Manuela with her cat (…).

Source: El País

Revival of “Corralas”

They were born in the age of Philip II, brought into being to couteract the lack of space in Madrid now, more than four centuries after, the “corralas” became an attractive target for young people looking for a dwelling in the center, singular and not expensive. At first glance it is difficult to see them, however the City Council estimates their number at over 400, most of them found in districts of Lavapiés, Embajadores or La Latina.

In order to distingush them from the convencional houses one needs to enter the door and reach patio, a very typical element of this kind of constructions in Madrid, which continues to be a meeting place for the neighbours, just as the corridors link the dwellings from outside.

Philip II created the buildings of this type, inspired by the blocks of flats in the Roman times, in order to work against the lack of space in the capital after the Court moved until there in 1561, and due to the necessity to build rapidly and cheap.

What has been designed for the humble social class, with shared bathrooms and little flats (of about 20 square meters), after some reforms and renovations a “corrala” is currently an appealing place for living for young hard-workers seeking good location and price.

“Living in the very center is a luxury, even if the home is small” says Ana Lázaro who has recently rented a flat of about 50 m2 in a “corrala” in Lavapiés. (…) Another woman living in this kind of building complains about lack of soundproofing (…).

All in all, “corralas” carry on with serving as homes for people with limited economical resources. (…) In many cases they are elderlies who lived in a “disastrous state” buildings before and have been relocated.

Together with the redevelopment, the “corrales” gained individual bathrooms and more square meters. (…).

The truth is that the “corrales” achieved calling the public attention. Recently, the Tourist Office in Madrid has added to its “must-see” list some examples of the “corrales”, recommending a two-hour walk to discover them. Among them there is one at 79 Mesón de Paredes Street declared as Patrimony of Cultural Interest and another, close to the Rastro, converted into the La Corral Cultural Center.

Source: El Mundo

Amancio Ortega Buys Old Catalonian Banesto’s Premises From Sareb

Amancio Ortega, the founder and the first shareholder of Inditex, has bought a building which hosted the Catalonian premises of Banesto in the Plaza Catalunya Square in Barcelona for 44 million Euros. Ortega, who acquired the property from Sareb, bought commercial premises of Apple within the building in 2012.

The real estate sources explain that Pontegadea, the investment company of the businessman, has tied itself up with the building through the purchase of the mortgage encumbering it, initially awarded to Banco de Valencia and Bancaja but later it was transferred to Sareb due to the banking restructuring process. (…)

The same sources reveal that the credit sale finalized at the end of December 2013, has been conducted with a 33% discount on the mortgage value that the Valencian banks granted to the building in 2006 to the Valencian real estate company Ballester to buy the building from another real estate firm, Monteverde from Madrid. At present, both companies entered the creditors´arrangements.

The mortgage of the building, occupying the number 1 of the Paseo de Gracia Street and number 10 of the Plaza Catalunya Square, at the beginning was a jewel in a lot of credits that Sareb put on sale last year. The lot, with the nominal value of 233 million Euros, named Abacus, was finally acquired by Deutsche Bank. In extremis, Sareb put an additional building of Banesto to receive a better offer, as the investors from Russia and Dubai has been already bidding for it in order to build a hotel.

Ortega bought 2.000 m2 occupied by Apple shop for 86 million Euros and was still interested in purchase of the rest of the building, reaching an agreement with Sareb after agil negotiations. The building disposes of an area of 8.500 square meters in total, 700 m2 of a terrace and 4.500 m2 of an underground parking (…).

The purchase delays converting the building into a hotel, the idea suggested for example by the Marriot group, however it would need additional input of 20 millions for refurbishment if it was to serve as a luxury hotel unit. (…).

The sale could facilitate commercial destination of the building that would require an investment of 8 million Euros. Unfortunately, the project could not be launched in short term: Apple signed the tenancy contract for 15 years in 2012 and from a top shop in Barcelona it became an important spot in the south of Europe (…).

Through the purchase Armancio Ortega empowers his position as a main investor in Barcelona since the beginning of the recession. Zara´s owner bought exactly a year ago the old commercial premises of BBVA in the corner of the Bergara Street for 100 million Euros from a German fund, Deka, and a building at 56 Paseo de Gracia Street (hosting a Burberry shop) for 53 million Euros from Testa real estate company. In the area Ortega also owns a building on Paseo de Gracia-Gran Via (a great Zara shop), number 95 – the luxury shop of Santa Eulalia and number 5 hosting premises of Santander.

The owner, the richest man in Spain and the third in the world according to Forbes, during the last years has invested over 1.2000 million Euros on property not only in Spain, but also in London (bought the Devonshire House for 490 million Euros) and in the New York (a building on the Fifth Avenue for 231 million Euros) and not long ago another one destined for offices in the Meatpacking district.

Source: La Vanguardia

The Economist: Spanish Housing Overvalued by 10%

The prices of houses in Spain still shall come to an end with adjustment. According to “The Economist”, in the twilight of 2013 houses were overvalued by 10% in regard to the wages available for home. The number is by 20% smaller than the one estimated at the beginning of 2013.

Idealista.com echoes the data adding that Spain leads together with Italy in the price fall among the most developed countries in the world.

Calculation highlights that the Spanish housing declined by 5.3% last year, while compared to the maximum recorded in the first quarter of 2008 the drop-off equals to 30%.

If it comes to Italy, the 2013 witnessed 5.9% decrease and, in reference to the top score, the housing numbers depreciated by 12.2%. Similar sort of data is found in the Netherlands (…).

In order to present the data above, the weekly newspaper analized the long-term information about the relation between the rental price and wages.

According to the classification, New Zealand, Australia, the United Kingdom, Canada, Belgium or France set themselves among the countries with the most overpriced houses. (…).

 

Source: El Economista

FCC at the Verge of Finalizing Sale of Realia to Fortress

FCC begins to see the light at the end of the tunnel. The company chaired by Esther Alcocer Koplowitz is at the point of finalizing the transfer of Realia to Fortress Investment Group, the same fund that acquired the debt of Sareb. FCC holds 34% of Realia and Bankia 26%. Realia capitalizes stock worth 220 million Euros and owns a corporative debt of 1.000 million Euros. (…)

Also, the talks on positioning FCC Logistica are being carried out while Cemusa (Exterior advertisement) negotiates with JCDecaux. The agreement will not be established soon, though.

In the meantime, Portland Valderrivas, unmarketable because of the conditions set by of its own cement producer sector, has reduced expenses and it hopes to reach its breakeven point this year. In 2013 the company produced 10 million tonnes (53 before the recession) and this year it is planning to reach 15 million tonnes. Not due to the civil work projects but the real estate development recovery.

Another part of the future business plan presented by its CEO Juan Béjar, is the British Waste Recycling Group (WRG), acquired by FCC for 2.000 million Euros. (…)

Right now the most important news is the advance in the refinancing the global debt of FCC. There are 4.600 million Euros of banking debt scheduled for refinancing by February 28th. As FCC informed CMNV, an agreement has been already made with 96% of the institutions, exceeding the homologation level. (…) Before the arrival of the pact, the company had to accelerate divestment to focus on the specialty of the house: garbage and water.

Source: Hispanidad

Blackstone Finalizes Purchase of Dwellings From Sareb

Blackstone completes the purchase of a lot of protected flats put on sale by Sareb and known as the Dorian Project. The portfolio consists of around 600 subsidized homes and 1.200 attached. According to the financial sources, the transaction could involve about 50 million Euros.

Last year Blackstone paid 128 millons for 1.800 subsidized houses to the City Hall of Madrid. Sareb launched the operation at the end of November through a quick tender where the assets were offered to several funds. The buildings are located within the Community of Madrid, Guadalajara and Barcelona. The capital assets are found in Mostoles, Valdemoro, Parla and Rivas Vaciamadrid. Sareb possesses other 7.000 subsidized flats, mainly acquired from CatalunyaBanc. The bad bank, obliged to report its balance from 2013, registered revenues of 2.000 million Euros last year.

Source: Expansión

Vulture Funds Manage Half of the Banks´ Property

If you have ever wondered of buying property from a bank in upcoming years, the odds are high that the operation will be finalized by a foreign fund called Apollo, TPG or Kennedy Wilson. The international investors already manage 52% of the awarded banking assets after the recent purchases of the two real estate companies: Altamira from Santander Bank and Aliseda from Popular. And it points just the tip of the iceberg.

In the contrary to the recession of 90s, the banks cannot wait to get rid of the real estate ballast and focus on their traditional work: granting credits and taking deposits in.

Inside the strategy, five entities (six if Banesto taken into account) transferred the management of their property to the third-parties: Santander by selling 85% of Altamira to Apollo for 664 millon Euros (with 550 million capital gain); Popular, handing control over Aliseda (valued at 815 million Euros) to Värde Partners and Kennedy Wilson for 415 millons; CaixaBank that sold 51% of ServiHabitat to TPG for up to 189 millons; Bankia that transferred its real estate company to Cerberus for about 90 millons; and Catalunya Banc that did the same, selling to Kennedy and Värde property valued at 60 millon Euros.

(…) In the next 10 years the funds will be responsible for administration and commercialization of 82.000 properties dumped into banks during the recession, valued at 20.000 million Euros.

Positioning

Answering the question “what´s in it for the foreign funds?”: their aim is to become super real estate companies and sell their business once Spain recovers from the crisis. Thus, not only are they interested in banks´platforms but also they are acquiring debt of the large companies of the sector: for instance Realia, Colonial or Metrovacesa.

Vulture funds usually invest for five to ten years, planning to sell when the real estate sector revives. (…) In Spain a race among the funds may be observed, running for positioning themselves as benchmark real estate managers. (…)

At the moment the most successful competitor is the consortium of Kennedy Wilson and Värde Partners, managing 25.000 million Euros in assets and loans. TPG, Apollo and Cerberus follow the funds at a distance.

Pending Transactions

(…) Sabadell gave clues of selling Solvia, the biggest real estate company after absorbing CAM. BBVA has not shown any inclination to get rid of Anida. Another real estate company bound to change the owner soon is the one of NCG, that has been already put on sale few months ago.

Source: Expansión

The Bad Bank Pulls Housing Prices Down by Selling 3 for 2

Sareb has taken a clampdown on the pricing strategy and in the last months got under way various campaigns of great deals in order to speed the sales up. The last big offer imitates the supermarkets in order to call attention of the clients to the most basic products.

The company chaired by Belen Romana gives possibility of buying lots of three or two properties with additional discounts and the ones already applied exceed 50%. It sells three dwellings at the price of two and in case of purchase of two, the third is available for half of its price.

Sareb has planned the step together with Novagalicia – one of the entities that has transferred the toxic assets to it and that has been granted to Banesto recently. Not only is it going to manage the commercialization, but also it included some of its houses to the project. In total, the portfolio represents 1.100 properties scattered all over the country. The list shows a thousand of homes priced from 10.600 Euros, row houses from 41.700 Euros and rural properties from  2.321 Euros on.

According to the purpose of the campaign started in mid December and foreseen to be valid by the end of January is to sell the properties bearing the same price with a discount of 25% each. If the values vary, both will be reduced “in a way that the discount amount is equal to 50%” of the lower price.

In case of the three-unit acquisition, Sareb and Novagalicia reserves that at least one of them must be cheaper than the other two. The discount is similar for the three and it cannot exceed the value of the cheapest house. (…)

The 30% Fall in the Recession

According to the date made public by the Valuation Society yesterday, the housing prices depreciated at the end of the fiscal year 2013 by 7.8%, marking the most significant drop-off since the crisis had begun. Since the real estate bubble burst in 2007, the accumulated decline reaches 30%. After three years of the slump, the price for a square meter is equal to 2.039 Euros. (…)

In the meanwhile Sareb continues to rectify the transfer valuations. Yesterday it informed about the return of 1.95 million Euros to Caja España-Duero (Ceiss) (…). It has already revised the portfolios of Bankia, Catalunya Banc and Banco de Valencia in the last months involving superb amounts.

Source: El Economista