AURA REE in the NYTM: Property Investors Flock to Spain

30/05/2014 – New York Times

Aside from the brief historical review on the way of the Spanish real estate market to the present popularity, from the article published recently in the New York Times Magazine we learn about the reasons and forecasts for the future activity on the once-rejected market explained by our CEO, Fernando Acuña at the recent interview with the author of the article, Jenny Anderson, at our office in Madrid.

Ms. Anderson recalls our head had said the number of investors coming in is beyond expectations as nowadays we observe a genuine frenzy about investing in the Spanish real estate. According to the journalist, not only small, start-up real estate advisory companies like ours are being stormed by eager buyers, but also mid- and global-investment banks.

They mostly target office buildings and apartments, real estate servicers and even loan portfolios. And there is a lot to sell, especially if it comes to foreclosed property.

The real jewels for them is the commercial real estate in Madrid and Barcelona whose pool is shrinking more and more, though. Therefore, the investors give up their 20% yield expectations and shift their interest to residential property.

Mr. Acuña admitted the shift goes in line with his future business strategy and after having gone through the boom and the recession, he´s preparing for the next property feast.

The journalist describes AURA REE´s birth as follows: “in 2006, Deutsche Bank hired him [Mr. Acuña] to build its mortgage business. When the market collapsed, he added the title of head of collections. In 2009, he started a business trying to sell repossessed houses for the banks and formed a database with 450,000 properties from banks and more than a million from private clients. When investors started calling and asked him for valuations of land, houses, buildings and portfolios, he started Aura to advise them and also to invest in the sector. Its website is in English because, he said, “all my clients are in Mayfair.””

Moreover, he believes the year 2014 will see an overhelming number of deals.

 

Read the entire article: Dealbook New York Times

Summary: AURA REE

FROB Relinquishes Catalunya Banc´s Offices Sale to Dodge State Assistance

30/05/2014 – El Confidencial

 The FROB (Spain´s Fund for Banking Restructuring) surrendered on seeing the meagre interest in the auction of Catalunya Banc´s 196 offices out of its region: it decided they will be sold together with the nationalized entity, not separately.

The fund received only two offers, from Popular and EVO Banco, which aimed at parts of the package and required public assistance. Adding the offices to the core sale will considerably pull down the value of the bank as shedding the network was supposed to cleanse the balance sheets. The fiasco contrasts with the success of the entity´s loan portfolio sale.

Popular´s offer targeted 80 offices in the Valencian Community and Aragon, while EVO bidded for a similar number of units scattered all around Spain to expand outside of Galicia.

Facing more public aid, the FROB could either add it to expenses for banking bail-out or give the sale up. Given that the loan portfolio sold in parallel already takes a €1.5 billion assitance from the fund, it opted for the other path. In fact, the guarantee was the key factor to fuel such an enormous interest in the “Hercules Project”.

 

Original article: El Confidencial (by Eduardo Segovia)

Translation: AURA REE

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Colonial to Earn €310 Mn at the SIIC de Paris Sale

30/05/2014 – Expansion

Colonial has made the final decision and will sell the 29.63% stake its branch SFL holds in SIIC de Paris to the Eurosic group for €310 million.

Société Foncière Lyonnaise (SFL), half of which (53.1%) belongs to Colonial, said it is negotiating on an exclusivity arrangement concerning sale of the entire stake of the firm in SIIC de Paris. Eurosic that vies for 58.95% of Realia, now shall also buy the stake of SFL at current market price standing at 24.22 euros a share.

Realia has come to an agreement with Eurosic to sell with an 11.43% discount, a total amount of €559 euros paid to the real estate controlled by FCC and Bankia. Colonial will not have to cut in the shares´value.

Colonial considered execution of its pre-emptive right but finally it decided to sell SFL´s stake.

Siic de Paris´s portfolio includes 31 buildings of total 179.699 square meters, principally offices situated in the La Defense, business area in the French capital. At the end of 2013, their value was estimated at over €1.3 billion.

 

Original article: Expansion (by Marisa Anglés)

Translation: AURA REE

Final Countdown to Apple Megastore Opening at Puerta del Sol

30/05/2014 – Expansion

Apple is giving the finishing touch to great inauguration of its fourth shop in Madrid, inside an iconic building on the Puerta del Sol square. On Tuesday morning, the giant firm placed a billboard on the exterior wall of the building saying: “Apple Store, Puerta del Sol. Muy Pronto.” (Coming soon, translator´s note).

The company has not specified the exact date of the opening, however it is conjectured its door will open in mid-June.

It took 12 days for the Apple shop on the Paseo de Gracia street in Barcelona to welcome clients after having hanged a similar advertisement.

Since 2011 the property at the Puerta del Sol has been refurbished after many years of housing the Hotel Madrid. The to-open Apple Store will be the biggest in Spain with an over 6.000 square meter area distributed over seven floors.

 

Original article: Expansión

Translation: AURA REE

Fergo Aisa Goes Bankrupt

30/05/2014 – Inmodiario

The Catalonian real estate firm chaired by Carlos Fernandez ended up in insolvency after six years of unsuccessful arrangements with its lenders.

Now it´s a fact. The Mercantile Court number 5 of Barcelona pronounced liquidation due to Fergo Aisa´s €300 million indebtness and said the firm “is a goner”.

In spite of all evidence, the president assured that the company was still operating and was at the verge of closing several projects. However, Fergo Aisa´s latest sales were registered in 2010, corresponding to swapping its debt for real estate assets with lenders.

The firm eventually was declared bankrupt last year, bringing down its branches, such as Intelinaken or Gazkue. Moreover, the managing board of Fergo Aisa owes €116 million, half of which debt belongs to Mr. Fernandez. After numerous attempts to lift it up, none of alleged contracts was signed and it became obvious there was no other way than to liquidate the real estate firm.

 

Original article: Inmodiario

Translation: AURA REE

Derby Inaugurates Four New Apartment Buildings in Barcelona

30/05/2014 – Expansion

The hotel chain owned by Jordi Clos and settled in Barcelona is going to open its first tourist apartments in the most visited cities like Amsterdam, Munich or Copenhagen in 2015.

The firm already runs ten tourist apartment buildings in Barcelona. Over the past six months, it has opened four establishments of this type, three of them in the Eixample and one in the Gracia neighborhood. In total, it exploits 200 apartments all of them situated inside buildings intended exclusively for touristic use.

 

Original article: Expansión (by Marisa Anglés)

Translation: AURA REE

Values of Houses Have Bottomed-Out Or… They Haven´t

30/05/2014 – Cinco Dias

“We have spent a lot of time in silence because if we had done it, everybody would blame us for the recession, but now the time has come to start doing it again”, said José Manuel Galindo, the chairman of Spanish Association of Developers-Builders, at his yesterday´s SIMA conference hearing in Madrid. He added that on facing such an extolled economic recovery the real estate developers want to be a wagon, not the locomotive pulling Spain out from the crisis.

Just as during the housing boom, prices is the hottest topic at the conference that will end on 1st June.

According to José Luis Feito, president of the Institute of Economic Studies and vice-president of the Spanish Confederation of Business Organizations (or CEOE), the recovery comes firmly and employment and improvement “are synchronising”. Moreover, he claims property prices will jump “sharply” in 2016, precisely between 6% or 8% to smooth out after that.

Another expert from the sector pointed out that perhaps the forecasts are spread to fuel the meeting demand by convincing the investors the moment to buy has come as the prices are to rise at any moment.

Juan Fernández-Aceytuno, general director of Sociedad de Tasación believes the housing values could hit the bottom in 2015. “We cannot see the bottom yet”, he assured and added “I do not like markets moved by cowboys who jump in, buy cheap and leave at the first chance. This is not a long-term investment in a country”. What is more, he advised to design a plan which would allow to reduce dependance on foreign funds on the way to recovery.

 

Original article: Cinco Días (by Raquel Díaz Guijarro)

Translation: AURA REE

Real Estate Financing to Return “Pretty Fast”

29/05/2014 – Cinco Dias

“It will take some time but should be back quite fast”, assures subsecretary for the Economic Affairs, Miguel Temboury, on being asked when the financing in the property sector would return.

New regulation forged by the Government will be crucial to achieve that as it offers incentives to banks to swap the debt of insolvent real estate firms for a share in the stake. That in turn would allow quicker deleveraging of the companies and obtaining financing again, in medium-term.

José Manuel Galindo, director of the Spain´s Association of Developers-Builders (or APCE by its acronym in Spanish) agrees with Temboury but also remarks that “the correction of assets values would not have gone so far” if the banks had been forced to shed the repossessed property earlier.

Moreover, Galindo said the lively interest of foreign investors in the Spanish property has brought “safer equity”, referring especially to the recent investments of the Socimis (Spanish REIT firms) and family offices. In his opinion, land prices are to fall further this year settling a very good target for the reviving market.

 

Original article: Cinco Días (by Juande Portillo)

Translation: AURA REE

Mortgages Rebound For the First Time in Four Years

29/05/2014 – Cinco Dias

According to the data provided by Spain´s Institute of Statistics (or INE), the number of mortgage approvals registered in March was higher than in the previous month. This has not happened since 2010.

Thus, 16.625 loans were granted in March, by only 0.2% more comparing with February but  by 2% more than in the same month 2013. However, one must take into consideration that this year´s Easter befell in April, while last year in March and this fact may have driven the positive figures.

In general, there are numerous signs of growing tendency of the market. Over the past three years, mortgage approvals declined 32% year-on-year. In 2005 and 2006, just before the real estate bubble burst, each month saw 130.000 granted loans.

Moreover, in March the amount lent for house purchase stood at €1.7 billion, increasing year-on-year by 7.7%, considerably higher than the number of mortgages. It is because an average amount per loan shows 102.397 Euros, 5.6% more.

Fernando Encinar, research director for idealista.com forecasts “the upcoming months may bring rise and at the end of the year we may even see positive development”.

Average interest rate for a mortgage was still above the benchmark, at 4.04%, but lower than in February (4.11%) and by 25 bps smaller than the 4.29% in November. Around 92%  of the mortgages are lent at variable rate, while 87.3% at Euribor as the reference. Average term is 20 years.

Over the past few months banks started to lend mousily at 2% differential over Euribor, for instance Santander, Bankinter, ING Direct, Cajasur, Caja Duero-España, Caja Rural de Granada, Deutsche Bank or Barclays. The Bank of Spain announced a 40% upsurge in lending in March.

In fact, also amendments in mortgages are carried out more frequently than before, setting at 4.4%. Subrogations pledged by the lender rose by 34.6%, while subrogation via property purchase increased 3.2%. Changes in terms and conditions stagnated with -1%.

 

Original article: Cinco Días (by Nuño Rodrigo Palacios)

Translation: AURA REE